Barnett Formula

Earl of Mar and Kellie Excerpts

Wednesday 15th June 2011 Lords Chamber

[The Earl of Mar and Kellie]

My Lords, it falls to me to congratulate my noble friend Lord Stephen on his excellent and constructive maiden speech. We will have to guess which parts we would have been denied had the two minutes not been extended. My noble friend has excellent experience across a range of governance. Firmly rooted in Aberdeenshire, his career in law and politics has prepared him well for this House. Ten years as a Grampian councillor, a Westminster by-election winner for Kincardine and Deeside, an MSP for 12 years for Aberdeen South, a Minister for education and transport in Scotland, leader of the Scottish Liberal Democrats and Deputy First Minister. “Aye, and he's looking so young”.

My noble friend has, to his national credit, the signing of the order abolishing tuition fees in Scotland and, vital for those who live in Clackmannanshire, his coming to Alloa to speak up for the return of the railway after 39 years to the Railway Bill Committee, which wisely chose to sit in Alloa for its scrutiny of the Sterling-Alloa-Kincardine Railway and Linked Improvements Bill.

The last time I congratulated a maiden speaker was two weeks before the end of the hereditary peerage in 1999. I hope that my noble friend's career will last substantially longer than that of the hereditary noble Lord whom I was congratulating then. Again, on behalf of the whole House, I hope that we will hear from my noble friend often.

I was also a member of the Select Committee. I am very happy with the conclusion of our report: that the Barnett formula should be urgently brought to an end on account of its current unfairness to all constituent parts of the United Kingdom. Proceeding to a needs assessment approach would contribute to the much-needed reform of governance in this United Kingdom.

The unfairness which the outdated, but easy-to-use, formula delivers is as follows. My native Scotland receives more than it is due—perhaps £1,600 per person—largely because of a slight decline in population. Wales and Northern Ireland entered the scheme at a lower than accurate level. Wales has more chronically sick and Northern Ireland has disproportionately more young people. The English regions are treated in widely differing and, frankly, mysterious ways. Resentment against Scotland is, surprisingly, still only smouldering. For the people of Scotland, it is bad to know that you are being subsidised, even if there may be a justification, in part, based on the UK Treasury raids on the oil and gas fields by the Crown Estate Commissioners and the siting of the nuclear deterrent at Faslane and Coulport.

I hope to hear my noble friend say that the Government fully intend to sort out that fiscal unhappiness by adopting our suggested scheme, the bones of which are that each devolved institution would receive a universal sum of so much per head, with premiums paid for certain groups: the very young, the very old and the chronically sick.

Therefore, I encourage my noble friend to commit the Government to ending the Barnett formula, but I believe that it will be important that all citizens in Scotland become aware of the inevitable reduction in the block grant, which will certainly be morally correct. This will be a major consideration for all citizens who are likely to take part in a referendum on Scotland’s future governance. The challenge for those wishing to continue with the parliamentary union is to demonstrate that there is a way to distribute UK resources more fairly, as would be achieved by a Scottish Treasury collecting and spending Scotland’s taxes. I look forward to my noble friend’s reply.