Scotland Bill

Lord Barnett Excerpts

Wednesday 28th March 2012 Lords Chamber

Moved by

[Lord Barnett]

30: After Clause 36, insert the following new Clause—
“Allocation of public funds to Scotland
(1) The allocation of public funds to Scotland shall be based on a needs assessment, rather than the population basis of the Barnett formula.
(2) The Chancellor of the Exchequer shall, by order, establish a commission—
(a) to agree a methodology for assessing Scotland’s needs; and(b) periodically to review the allocation of public funds to Scotland in the light of its needs.(3) The first review by the commission must be completed no later than 1 April 2015.
(4) The new Barnett formula should be implemented no later than 1 April 2016.”

[Lord Barnett]

My Lords, I should apologise as an English Member intervening to this extent in a Scottish debate. I must also apologise that I was unable to be present when my amendment was debated in Committee. I thank the noble Lord, Lord Forsyth, for so ably speaking to it on my behalf. It was much appreciated, as were the other speeches in the debate, although not all of them were ones with which I would agree, as I will point out in a few moments.

I want to make clear that this amendment is based entirely on the report by this House’s select committee on the Barnett Formula. That Select Committee is probably the best thing I ever did in this House. Not only was its membership cross-party and cross-non-party but it was chaired by my noble friend Lord Richard, a former Labour Leader of your Lordships’ House. It had distinguished members such as the noble Lord, Lord Lawson of Blaby, who was a Chancellor of the Exchequer; two former Secretaries of State, Lord Lang and Lord Forsyth; many noble friends and former Ministers; and senior Lib Dems and Cross-Benchers. After a year’s discussion and evidence-taking, they came up with a powerful report, which made strong recommendations which are entirely the basis for my amendment.

The issue is about the fairness of allocating expenditure between England, Northern Ireland, Wales and Scotland. I am moving the amendment on a Bill about Scotland but if it is accepted, as I hope, it would affect the money going to the other parts of the United Kingdom as well. It is bound to do. I am glad to see my noble friend Lord Richard come in. I have just referred to his chairmanship of the committee which formed the basis for this amendment, and am glad to see him in his place. The amendment is based on the Select Committee’s report and requires need to be taken care of. In other words, instead of the block grant changing each year based on population, it would be based on need. I hope that nobody could oppose need when talking about this matter, although I gather, sadly from some notes that I have received, that my own Front Bench is going to oppose the needs basis rather than the population basis. I hope that it is not the case and that it has been badly drafted, but if it is not it would be disgraceful.

I know that there have been reports that the Barnett formula was once referred to by Alex Salmond, the present leader in Scotland, as the Barnett squeeze. He reckons it is all perfectly reasonable and fair to Scotland. Following a report by some research body recently, I saw a headline that said, “Scots rejoice as subsidy junkie myth laid to rest”. That report was based on the annual changes but, as the Select Committee pointed out in its report, it is not just the annual changes that are wrong; it is the baseline. Those former Secretaries of State who have told me in the past that the formula would eventually make things right really meant that it would bring things back to the baseline. However, the baseline is wrong. The Select Committee pointed out clearly that it was the major cause of the difference between the two and the difference is enormous.

--- Later in debate ---

[Lord Barnett]

My Lords, I thank all noble Lords who have spoken in the debate. I am sorry that I cannot reply to them but, given the time, I am sure that they would not expect an overly long speech from me.

To say that I am disappointed with my own Front Bench is to put it mildly. My noble friends could not even go as far as the Government in saying that they recognise the concerns about needs. I imagine that my English noble friend who replied on behalf of the Opposition had been got at by the Scots, who did not want him to support the amendment. I do not know whether that is the case but, whatever they did, I find it incredible that he, as an academic, should have come up with the idea that this is an “unripe time”. He obviously had not read the excellent Richard report.

[Lord Eatwell]

I did.

[Lord Barnett]

If he had, he would not have come up with the kind of speech that he made today. As I said, to say that I am disappointed is to put it mildly. I think that it has been appalling.

The noble Lord, Lord Sassoon, did at least repeat his concern, and it is one that the Government recognise. As many noble Lords said—even those who disagreed with the amendments—the technical drafting is not an argument. If the noble Lord wants them redrafted, I will redraft them, or I will let him redraft them—I do not mind. However, the case for doing something, whether in this Bill or elsewhere, is clearly made, as basically every speaker has said. I understand that the noble Lord, Lord Sassoon, cannot go further, because he also has a brief and he is not able to go further than he has done.

We will inevitably return to this matter because this huge disparity in the allocation of money between the different parts of the country cannot go on. As has been said in this debate, this issue concerns the whole of the UK, not just Scotland, and it cannot be set aside by talking about technical amendments or by saying that they should not appear in this Bill, or that they are being brought forward in the wrong place or at the wrong time. Of course all those things can be said but they do not alter the fact that something needs to be done here about the whole of the UK. I have listened very carefully to what has been said and, for the moment, I beg leave to withdraw the amendment.

Amendment 30 withdrawn.