View from the house.

One of the main Treasury events this year will be the unveiling of the second comprehensive spending review. The three-year process has brought clarity and stability to planning spending, but the chancellor seems to be turning a sensible management tool into a fetish. To cite a topical issue, take government match funding for objective one status areas. Four areas in the UK – Liverpool, Cornwall, North and Mid Wales and South Yorkshire – have been granted objective one status, primarily due to a poor level of GDP, levelling out at 75% or less per capita than the average. The status allows for European, national and private-sector funding to come together specifically for economic and structural development over seven years. All four areas submitted weighty plans. Bids varied slightly, in terms of private funding, but in each case the government was to match European monies. However, in an adjournment debate held mid-January by my Cornish colleague, Andrew George MP, the minister of state for trade, Richard Caborn, reported that there may be problems ahead for match funding. This was a bombshell, given that the government had only just approved the proposals. The government wants to make objective one a success. But if a decision has already been taken to provide the funding, why not say so? If not, there is every reason to worry. This issue burns no brighter than in Wales where block funding means that without extra money for the match funds, other services will have to be cut. It was the government’s refusal to guarantee the match funding that led to Welsh leader, Alun Michael, resigning just prior to losing a vote of no confidence in the assembly. Michael must be wondering what he did wrong – hung out to dry for the sake of a CSR timetable. Perhaps that’s why he resigned during prime minister’s questions, leaving Blair wrong-footed as the news broke. Welsh Labour loses a leader, the prime minister loses his footing – and the chancellor keeps his timetable. Politics can be an odd business. – Matthew Taylor is Liberal Democrat Treasury spokesman.

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