Barnett Formula

Lord Dixon-Smith Excerpts

Wednesday 15th June 2011 Lords Chamber

[Lord Dixon-Smith]

My Lords, I feel a certain wry amusement in this debate because I agree with almost everything that has been said this evening. I last spoke on this subject on the Scotland Bill on 30 July 1998. On that occasion, I moved an amendment to suggest that the formula for distributing funds between the United Kingdom and Scotland should be based on the comparator of GDP per head, which is a pretty good comparator for needs. The late Lord Mackay of Ardbrecknish, in keeping with the philosophy of the times, quietly put me back in my box—I was a relatively new Member of this House—by saying that he did not like my formula because it was too mechanistic. It was mechanistic and I do not apologise for that, even today. If we had been able to work it out and apply it, it would have exposed everything that has been described tonight and brought it out into the open.

So here we are 13 years later discussing the same subject, and I could say, “About time too”. However, we now have to face a different problem. Whatever we do, it cannot be a unilateral decision by this country; there will have to be an element of negotiation with the devolved Assemblies and Parliaments, and I suspect that those negotiations will be very tense and difficult. In Scotland, another potential problem looms: the issue of whether there will be a referendum and a move towards independence there, in which case we will have a very much more difficult and very different type of negotiation.

I am speaking in this debate tonight partly to issue a word of caution—not to anyone in this Chamber or the Palace of Westminster but to the people of Scotland. My view, for what it is worth, is that, if they were to go down that road, they would be sacrificing a milch cow in Westminster for a very uncertain future in which they would assume that the oil and gas in what would become their section of the North Sea might provide an equal source of revenue. Looking at the long-term future, which we do not think about often enough, the fact is that we, together with the rest of the world, are going to have to move away from fossil fuels. They may be an asset at present but over time they are likely to become a diminishing asset. Therefore, the people of Scotland might run the risk of swapping what I would call a moderately safe and secure future for one that, in my view, holds the prospect of a steadily reducing income base for their country if that is the route they choose to follow.

I welcome this debate and pay tribute to the noble Lord, Lord Barnett. I bumped into him in the corridor the other day. That is why I am speaking tonight and I have enjoyed every minute of it.