Welsh first minister says fiscal powers reform now a matter of 'how and when' after Glasgow summit

Welsh First Minister Rhun ap Iorwerth has described a "significant step forward" on his country's spending and borrowing powers after meeting Prime Minister Andy Burnham at a summit in Glasgow on Friday. Mr Burnham convened a meeting of his National Economic Council with the first ministers of Wales and Scotland, after which Mr ap Iorwerth said the loosening of financial restrictions was now a matter of "how and when". No timescales for changes to Wales' finances were announced. At the summit, Mr Burnham lobbied the government leaders to devolve "deeper" to the regions of Wales and Scotland, saying the two first ministers had agreed to work with him on "regional empowerment". Friday's meeting followed a row between the Welsh and UK governments over the chancellor's Budget on Wednesday, which Mr ap Iorwerth had said was "not serious about Wales". His party, Plaid Cymru, said the budget left the Welsh government with a real-terms cut in funding, which the UK government denied. The first minister had set out a range of demands in a letter to the prime minister at the start of October, calling for powers over policing and justice, more funding for rail projects, and an end to restrictions on access to the Wales reserve. That spare funding, which the Welsh government can store in one year to use in another, is capped at £350m, with drawdowns limited to £125m and £50m for resource and capital spend respectively each year. The Welsh government can also borrow up to £1bn for infrastructure, at a maximum of £150m a year. "On fiscal flexibility, the ability for us to use our funding better in Wales, use our reserves better in Wales - and on borrowing powers, I was told clearly that it's now a matter of how and when. That is a significant step forward," Mr ap Iorwerth said. He added there was "clearly an interest" for the prime minister to understand "the sheer injustice of underfunding of rail in Wales that we have seen for many years", an issue to be taken forward between the two offices. On policing, he said he believed Mr Burnham "instinctively wants to go there and there's still work to do". Mr Burnham described the meeting as "positive" and said the first ministers had agreed to "work together jointly on regional empowerment in Scotland and Wales as well". "We now have a process where we have detailed work by officials on both sides to see if we can come to a set of arrangements that are right for Scotland and right for Wales," he said, adding that there had been good discussion on re-industrialisation and devolving innovation funding to the regional level, with Scotland and Wales to decide how that looks. The UK government will also look at arrangements for further devolution of employment support. Welsh Secretary Stephen Kinnock said fiscal flexibilities and borrowing were on the agenda for future discussions between the Welsh government and No 10 North, but added: "It is going to take some conversations on how that would work in practice. I can't give you a specific time frame as things stand." Downing Street said Mr ap Iorwerth had "agreed to start a process to explore how each government could contribute to regional empowerment, reindustrialisation and achieving good growth in every postcode", describing it as a "policy sprint led by No 10 North, involving officials from each government". In a statement, the first minister said there was "an encouraging consensus that the fiscal and borrowing powers which have for so long put Wales at a disadvantage compared with other UK nations must be revised as a matter of urgency". Following the Budget, which included an extra £450m for Wales over the next three years as well as funding for individual projects, the Welsh government claimed the extra money would represent a real-terms cut. A £30m pledge for a new railway station in Cardiff was described as "an insult" by Wales' transport minister. Before the summit, Mr ap Iorwerth said there were "paltry sums of money coming on rail, when they've said there's £14bn on the way". Welsh ministers had also sought assurances that child poverty payments they want to introduce would not affect recipients' tax and benefits allowances, which was not addressed in the Budget, though Mr Kinnock said "positive" talks were continuing on that issue. The National Economic Council summit, intended to help boost the UK economy, had been due to be attended by the prime minister and all devolved leaders. However, Northern Ireland's First Minister Michelle O'Neill did not attend after her participation was blocked by her Democratic Unionist Party. Since becoming prime minister, Mr Burnham has consistently spoken in favour of devolution, saying he is "open" to transferring policing and justice powers to Wales and stating at Prime Minister's Questions on Wednesday that he was "ready to make an offer" on the devolution of employment support.