Wales: Barnett Formula

Lord Barnett Excerpts

Wednesday 20th June 2012 Lords Chamber

[Lord Sassoon]

My Lords, first, on the numbers, which the noble Lord, Lord Wigley, quoted, when the Holtham commission reported to the Welsh Assembly in July 2010, it claimed that Wales had a £300 million funding shortfall. I do not recognise the new figure put out by Plaid Cymru yesterday but the point is that Wales has received nearly £500 million additional funding in the current spending review, SR10. In 2010-11, funding in Wales was running at some 15% above the level in England, so we need to keep the numbers in perspective. As I have said previously, yes, we recognise the significant issues that there are with the Barnett formula.

[Lord Barnett]

My Lords, as the noble Lord knows, a powerful Select Committee of this House unanimously recommended major reform, which would help not only Wales but every other part of the UK, particularly Scotland, where there needs to be reform. I gather that, subject of course to the Scottish people sensibly voting against separating from the UK in a referendum, the Government have in mind a major financial reform in Scotland, probably well before the time that the Minister has always mentioned. In those circumstances, would not then be a good time for Scotland to make that piece of essential reform?

[Lord Sassoon]

My Lords, we are straying a bit from Wales, but I am very happy to talk about Scotland. Of course, we recently passed through this House the new Scotland Bill, now an Act, which made some very significant changes resulting from the Calman commission recommendations. In respect of the eponymous formula of the noble Lord, Lord Barnett, the difficulty that we have among others is that there is no consensus across the UK on what could replace it. Since 1978, it has stood the test of time, and it is very difficult to find a better basis.