Wales devolution: Danny Alexander orders funding review

Chief Secretary to the Treasury Danny Alexander has ordered a review of the way the Welsh government is funded.

It comes as arguments continue over the coalition government's pledge to set a minimum funding floor.

First Minister Carwyn Jones rejected it as a "vague promise" which should not depend on a referendum on tax powers.

But Mr Alexander told the Welsh Liberal Democrats' conference that the last Labour government had "refused to let go of the purse strings" for 10 years.

"Manchester council could set taxes - but not the Welsh government," he said.

"The previous Labour government refused to commit to fair funding - it's taken Liberal Democrats to achieve that.

"That is why I have asked civil servants in the Treasury to start straight away working on how a funding floor will operate."

Mr Alexander said economist Gerry Holtham would be invited to update his study for the Welsh government in 2009 which suggested Wales was underfunded by around £300m a year.