Barnett Formula

Lord Jones Excerpts

Tuesday 17th December 2013 Grand Committee

[Lord Jones (Lab)]

My Lords, I thank the noble Lord, Lord Shipley, for initiating this debate, and his succinct address.

Were he alive, Lord Roberts of Conwy would be here today. As a long-standing ministerial and opposition opponent of his, I think that his contribution to Wales’s public life was magnificent. He was more than ever loyal to Wales’s local government units, and his journey from the Methodist manse of Ynys Môn to high rank here in your Lordships’ House is a fine essay in giving good public service. Wyn Roberts built more roads than the Romans ever did, and he built schools and hospitals. He was a fine man.

As I see it, the background to the Barnett formula was the consequence of three beleaguered Administrations of which I was a member, led first by Prime Minister Harold Wilson and then by Prime Minister James Callaghan. The latter Administration was sustained by a Lib-Lab pact of a kind. In those crisis years, as he was addressing the complex algebra of local government finance, the noble Lord, Lord Barnett, knew that the IMF was kicking in the doors of the Treasury, that the British manufacturing smokestacks were falling down by the day, that the OPEC nations had trebled—indeed, quadrupled—the price of oil, and that a fearful inflation was raging, some 27% year-on-year in 1975. That also triggered off what is now called in shorthand trade union militancy.

I will give the following brief vision of how the noble Lord coped as Chief Secretary. You would find him in the Members’ Dining Room in another place with his great friend, the noble Lord, Lord Sheldon, and he coped by opening a half-bottle of House of Commons champagne. He then went back to the Treasury that little bit better in his morale. It was from these fires in British governance that the Barnett formula arose, as it were, metaphorically so, from the political loins of the noble Lord, Lord Barnett. My one observation is to be careful for what you wish if you are a Welshman in governance, particularly in Wales. Whatever the outcome of the Scottish constitutional debate, Barnett will come to the fore in all our deliberations and arguably shall be in the manifestos of the great political parties. That is for certain.

My caution is this. Roughly speaking, per head of the population in England the sum of money per citizen is exceeded in Scotland by £1,400; and in my own country, Wales, by some £800. I have spent only 43 years here in Westminster, and I am concerned that when Whitehall mandarins have their monthly meetings they may be tempted to consider how they may be able to get rid of the responsibility as it affects the Celtic fringes. I therefore feel that before one advances one should know precisely what the outcome is. That is what the noble Lord, Lord Barnett, always did; he was an accountant by profession. I offer again the sight of the noble Lord quaffing his half-bottle of Commons champagne before going back to address problems of great crisis.