Funding Formula

Debate between Hywel Williams and David Mowat

Tuesday 18th January 2011 Westminster Hall

[David Mowat (Warrington South) (Con)]

This has been an important debate, focusing more on Wales than on Scotland. There is a disparity in Wales—the figure of £300 million has been mentioned—but it is dwarfed by the Holtham estimate of the disparity in Scotland, which is £4.5 billion. Many English Members of Parliament, particularly those from the north, are being forced to go back to their constituencies and defend an austere budgetary environment. It is tough to do so when £4 billion a year over and above the needs-based amount is being sent to Scotland.

I have two quick points to make; I will finish by 10.40. We use the term “needs-based” a lot. The real issue is not need; it is population movement. We could continue to use the Barnett formula of 1976 if we adjusted it for the population changes that have occurred since then. It would be a simple arithmetical adjustment. It is true that a needs-based analysis could be complex, but that change is not required. We need only to adjust the formula for relative population movement, and it would eradicate two thirds of the current imbalances.

[Hywel Williams]

The hon. Gentleman is coming to the point that I wished to make. It is a converging formula, so there are issues other than population change to be considered.

[David Mowat]

It is not wholly a converging formula; I do not agree. For example, if the baseline population is not adjusted in arithmetical terms, it means that if the population of Scotland fell to one, that person would get all the money. We do not change it for population, which is indefensible. As I said, I regret the fact that there are no Members from Scotland here, unless I am misinformed.