Debt

Debate between Lord Sassoon and Baroness Randerson

Tuesday 29th May 2012 Lords Chamber

[Baroness Randerson]

My Lords, the Government have stated repeatedly that reducing the deficit must take priority over reform of the Barnett formula. Can the Minister tell us whether Treasury discussions with the Government in Wales have included consideration of a temporary mechanism—the so-called Barnett floor—which, although it would not solve the problem, would at least alleviate the immediate widening of the unfairness in the funding of Wales?

[Lord Sassoon]

My Lords, we are ranging a little widely at this point. My understanding is that discussions with the Welsh Assembly are going on. We intend to report back by the end of the year. A Barnett floor is one of the ideas that I know has been put forward, among others, and is subject to the discussions with the Welsh Assembly.

Devolved Administrations: Financial Flexibility

Debate between Lord Sassoon and Baroness Randerson

Tuesday 8th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, sadly, the previous Government left us with a pot of money of some £20 billion which had been unspent by departments, which, if now spent, would simply increase our deficit; it would increase the stock of debt by £20 billion. It was necessary for the Government, as part of our deficit reduction strategy, to cancel that EYF, but the stock of cancelled underspends in the devolved Administrations was 8.4 per cent of the total, compared with 15 per cent of expenditure, which the devolved Administrations represent, so what they were prevented from spending was rather less proportionately than applied to the United Kingdom as a whole.

[Baroness Randerson]

My Lords, the decision not to allow the EYF for Wales was something which took many people there by surprise. Can the Minister tell us whether it took the Government of Wales by surprise or were there discussions with the Government prior to the decision by the Treasury at the time of the Budget?

[Lord Sassoon]

My Lords, as I have already explained, the Government inherited an extremely difficult deficit position. We took decisions that affected the whole of the United Kingdom and this one was consequential on decisions that needed to be taken to bring the deficit position under some sort of control so that departments were not completely without controls on their expenditure. After that, there were detailed discussions led by my right honourable friend the Chief Secretary, which led to the proposals which are the subject of this Question.