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Eluned Morgan MS, the Labour leader of the Welsh Government, said that the Barnett formula should be reformed following the impact of Brexit on how funding is distributed from Westminster.
She argued that an independent adjudicator should be appointed to ensure fairness across all four nations when it comes to Westminster funding.
Morgan called for a “new chapter of devolution” and that Wales should have the “same powers as Scotland”.
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In a keynote speech to the Institute for Government (IFG), Morgan argued for a fairer share of funding for Wales as well as greater control over key public services – such as policing and rail.
She argued that the current set up puts Wales at a disadvantage compared to other parts of the UK.
Speaking at an event held by the think tank in London, Morgan pointed out that since Brexit constitutional issues still “reverberate” through the UK Government, and this is “damaging the devolution settlement”.
She noted that devolution didn’t exist when the UK joined EU in 1973, but when Brexit happened “we came out to a whole new constitutional landscape in the United Kingdom”.
Morgan said that the Internal Market Act, introduced by the Tories to create a single market across the UK did not “understand the new political landscape” of devolution.
“The previous Tory government imposed their will on our governments and sought to dictate the rules to us in a way that Brussels would have never dared to,” she added.
“But it doesn't have to be done this way.
“As part of our new chapter on devolution, we have to ensure that UK wide frameworks enable, rather than restrict, innovation within areas of devolved competence.”
Pointing to Wales plans for a deposit return scheme – which the UK Government, under the Tories, blocked Scotland from going ahead with due to the inclusion of glass – she argued that Labour ministers should allow the scheme to go ahead.
“Subsidiarity is not a word that is used very often in Whitehall, but in a new, refreshed version of the devolution settlement,” Morgan said.
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“It must hold sway once again, as it did in EU legislation.
“But change isn't just contingent on constructing frameworks.
“Inevitably, it's about fairness and how money is redistributed from the center.
“Now my predecessors made the case, including here at the IFG, that there was a need to reform the Barnett formula, the equation which determines how much money the government receives annually from the UK Government.”
She would later say that the Barnett formula should be updated to “balance the competing demands” of all four UK nations.
Morgan added it should be reformed to "reflect today's needs”. She called for an independent adjudicator to be appointed to “ensure financial fairness across the nation”.
“You cannot have a true partnership of equals without greater transparency and independent oversight,” she said.
“But the argument I'd like to announce today isn't just about Barnett. It's about the pots of central UK funding that Wales requires its fair share from.”
The First Minister said that changes to devolution should be “underpinned by a fair share formula” so that Wales “automatically receives its rightful share of UK resources in critical areas like rail, justice and research and development”.
“I believe that Wales should receive at a minimum a Barnett share from all relevant UK wide investment funding streams, whilst at the same time respecting the devolution settlement and Welsh interests,” Morgan added.
