This simply isn't acceptable

Rachel Reeves' broken promise leaves Wales worse off than England

Morning!

Welcome to another newsletter. I must first express my frustration that yet another week has gone by in which no Welsh Government official has accidentally added me to a Signal or Whatsapp chat. Some journalists have all the luck.

This week is going to be another varied one. We are going to break down the fact Wales is paying its brightest young people to leave, investigate how the UK Government is shafting Wales AGAIN, take a look at an exciting new initiative in Cymru, show how Welsh Labour are not even trying to get the Crown Estate devolved and explore how we can bring our town centres back to life.

Before we start, a word from our sponsor:

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Why are we paying our cleverest students to leave?

There has been a lot of chatter about university funding in Wales. Cardiff University's Professor Richard Wyn Jones provided an excellent breakdown of why it is simply unacceptable for policy makers in Wales to attempt to wash their hands of responsibility for the cuts being made in Welsh unis. It’s worth a read.

What I want to focus on are the figures around how much is spent supporting students to leave Wales. Here is a breakdown:

• The Welsh Gov spends £1.3bn on higher education.

• £200m of that goes directly to Welsh unis.

• Just over £1.15bn goes to students to subsidise and support their studies.

• Of that £1.15bn, more than £500m is going to subsidise students who are going to study in England.

One might suggest this is a really misguided use of Welsh Gov resources. At a time when our universities are really struggling, offering a financial incentive for Welsh students to choose Welsh unis over English ones seems like a no-brainer.

That money would then, in turn, be spent in Welsh towns and cities rather than in other areas.

Plus, there is the issue of where people stay after university. There is a strong correlation between where people study and where they end up living after study. I am a prime example of this (though my contribution to the local economy beyond begging people for newsletter sponsorship is negligible).

London has by far the largest retention rate of people who come to study but it’s by no means an isolated case. Manchester is second with a graduation retention rate of 51%. Make no mistake, some of these will be Welsh, especially from North Wales.

This graph shows where Welsh students are going to study:

As you can see, a massive 37% of people in the north of Wales who study at uni are heading to the north west of England. This is a serious brain drain.

To be clear, this money we are giving to students to study in England is not, in the main, paying for Welsh kids to go to Oxbridge. It is often paying for them to go to unis in England that are no more prestigious than those in Wales.

For three years from 2021-23 there were only 1,549 Welsh applications to Oxford, of which 245 were admitted. Over three years…

Now don’t get me wrong. I am not saying it is bad for Welsh students to go to other parts of the UK and beyond to study. Travel and new experiences are incredible ways to grow and learn. However, I am saying that providing cash incentives for young Welsh people to leave when we have chronic skills shortages, an ageing population and underfunded universities making lay-offs is perhaps not great policy.

Wales shafted again

I have written the above phrase so many times since this newsletter started that I am surprised my computer is not predicting the text for me.

This is going to sound complex but stay with me because it is indicative of how much of an afterthought Wales is. Let’s break it down:

• Last year, Labour Chancellor Rachel Reeves announced that on April 6 this year, employers will have to pay higher National Insurance contributions.

• Obviously this will hit public sector employers as well as private sector ones.

• To make up for this, Ms Reeves had said that the UK Treasury would cover the increased public sector costs for public bodies.

• However Wales has a proportionately larger public sector than England.

• Why is this a problem? Well it wouldn’t be if the Treasury were simply going to give Wales the cash to make up the shortfall.

• Alas, they are not.

• Instead they are calculating the amount of money using the Barnett formula.

• Under this, Wales only gets an increase in funding proportional to England which means…

• Because England’s public sector is smaller, Wales proportionately gets less money.

If you want this in plain simple English then here it is:

“Every council and NHS body in England will not lose out because of the NI rise, whereas in Wales there's a £65 million shortfall.”

Speaking in the Senedd Mark Drakeford said:

“I can confirm that the UK Government has decided to distribute the assistance that will go to Scotland, Northern Ireland and Wales in fulfilment of the Chancellor's promise …and that the Chancellor has decided to use the Barnett formula for that purpose.

“I think that she is wrong to do that, and I have said so in direct terms to the Chief Secretary of the Treasury

“Treasury Ministers had a choice to make. They could choose to take money through the Barnett formula or they could have chosen to fund the actual effect of their decision in the devolved Governments. I believe they made the wrong choice.”

Seriously, is this what a partnership in power looks like? Yet again the UK Treasury is using accountancy sleight of hand to leave Wales worse off for the sake of what would be not much more than a rounding error on their spreadsheets.

This is exactly why it is not acceptable for Labour to say they do not want to engage with constitution debates. These arguments are not important just to constitutional anoraks. It's about enshrining into law the safeguards to Wales’ future funding. It is simply not acceptable for Cymru to rely on Mark Drakeford making supplications to his fellow party members in London. Wales’ prosperity should not be dependent on the goodwill of a Treasury official.

Welsh Labour confirm they are not chasing devolution of the Crown Estate

Given what I said about Wales being shortchanged, I think it is worth taking a moment to point out that there is absolutely zero chance of Wales getting devolution over things like the Crown Estate any time soon. This isn’t just because UK Labour won’t give it to us. It is because Welsh Labour have admitted they are not even trying very hard to get it.

Let me show you the transcript from Eluned Morgan giving evidence in a Senedd committee recently. It begins with her saying how much she wants the devolution of the Crown Estate (Llyr Gruffydd is a Plaid MS).

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Llyr Gruffydd: Just to confirm again that it is Welsh Labour Government policy to devolve the Crown Estate?

Eluned Morgan: Certainly Welsh Labour—yes, absolutely.

Llyr Gruffydd: Okay, because some people will find it difficult to understand that the Welsh Labour Government's policy is to devolve, but then Welsh Labour MPs at Westminster voted against that when they had the opportunity.

Eluned Morgan: Well, this is the world of devolution.

Llyr Gruffydd: I’m just wondering how that made you feel.

Eluned Morgan: Llyr, this is called devolution.

Llyr Gruffydd: Did you lose the argument, then, within the Labour Party, or how did that work?

Eluned Morgan: I'm going to stand up for Wales. I'm going to do what I need to do, as the leader of the nation…

Llyr Gruffydd: So, unsuccessfully in this case?

Eluned Morgan: Well, I will keep on making the case. This is something that I'm very keen to pursue and I don't want to see a situation where Welsh resources are exploited and Welsh people don't actually benefit from them. I will not put up with that situation. So, we will continue to make the case for devolution of the Crown Estate

Llyr Gruffydd: Can I ask, then, about the next step on that journey in making the case and in eventually, hopefully, winning the argument—where do you go next on that?

Eluned Morgan: Look, I think there are things that we can do to make sure that we benefit from the exploitation of natural resources in our country.

Llyr Gruffydd: Such as?

Eluned Morgan: Well, there are things that I'm asking people to explore at the moment, but they are very much at the exploratory phase.

Llyr Gruffydd: So, what kind of things are you asking people to explore?

Eluned Morgan: Well, they're at the very early stages, so, I wouldn't want to go into those at this point in time.

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So what to make of this? It sounds like Ms Morgan is really keen to get the Crown Estate devolved and will fight for it, right? Well except she later goes on to say that creating jobs was her “priority” but that “we will continue the constitutional fight, but I'm interested in landing jobs for people in Wales. When pushed to commit to constitutional reform she said:

“This is one of the things that I'm trying to get away from. I've set priorities. You say, 'You can have more than one priority.' I've got four priorities, right. You want me now to add a fifth, which is, 'Can you fight on constitutional reform?'

“I'm telling you I've got four priorities, and I'm focused on those, and I'm focused on jobs, because that's what matters.”

Speaking to people around Eluned Morgan as well as the FM herself, it is pretty clear where she stands. When she came to power she had 18 months to make her case to people in Wales. That time period is now down to one year. She wants to be able to stand up this time next year and say “the waiting lists are down X amount and have created X number of jobs”. She feels that is the best way to win. She sees constitutional reform as a distraction from that task.

In a way, it would feel churlish to criticise this given that I have spent a lot of previous newsletter inches arguing that the Welsh Government need to get on with delivering with the powers they have rather than agitating for more.

But it really does beg the question of why it has to be an either/or? It is obvious that the current set-up is not working. If we want a successful Welsh Government for the next 12 years rather than just the next 12 months, those in power can’t just push needed reforms to the back burner. The entire last 15 years of devolution has been treating the symptoms of problems rather than the causes. We need to put a system in place where we can really, truely, tackle problems.

A New Wales?

The New Wales launch at the Senedd

Last week I attended the launch of an organisation called New Wales. Essentially it is a political think tank “promoting innovative and aspirational policy ideas, from diverse perspectives and providing a positive vision of our future Wales”. Basically they plan to conduct research into how to make Wales better.

They are in their early stages but I think the more people talking about Cymru the better so I thought I would give them a shout out.

The antidote to Farage - How can we make our town centres fit for purpose?