Barnett Formula

Lord Barnett Excerpts

Monday 7th June 2010 Lords Chamber

Asked By

[Lord Barnett]

To ask Her Majesty’s Government what action they propose to change the Barnett formula.

[Lord De Mauley]

My Lords, the Government recognise the concerns expressed by your Lordships’ Select Committee report on the Barnett formula, the Holtham commission on Welsh funding and other commentators on the system for devolution funding. However, as set out in the coalition programme for government, at this time the priority must be to reduce the deficit, and therefore any change to the system must await the stabilisation of the public finances.

[Lord Barnett]

My Lords, the noble Lord must know that he has not answered my Question. The Select Committee to which he referred unanimously pointed out that approximately £1,600 per head more is spent in public expenditure in Scotland than in England, which has serious implications for the coming cuts. The Select Committee, which included a former Conservative Chancellor and two former Conservative Secretaries of State for Scotland, unanimously recommended that the system should be changed and based on need. What is he going to do? Is he going to do nothing at all?

[Lord De Mauley]

My Lords, I pay tribute to the noble Lord, Lord Barnett, not only for producing his eponymous formula at the end of the 1970s, when he was a much respected Chief Secretary to the Treasury, but also for his powerful arguments in recent years for change. He of course knows more than I will ever know about the Barnett formula, and he makes a valid point; and the coalition understands his concerns very clearly. However, I am sure that he will be among the first to acknowledge that, in the light of the grave financial situation that the country faces, it would be wrong for a new Government to rush to a decision on this complicated matter.