PM denies rethink on Barnett Formula
Mar 6 2008 by William Green, The Journal
GORDON Brown yesterday issued furious denials that the funding system handing more public cash to Scotland is under review, despite growing demands for it to be scrapped.
Downing Street insisted there were no current plans to change the Barnett Formula amid reports the Prime Minister ordered a review due to rising anger over the system in England – although ministers are considering how to take forward a “review” of Scottish devolution initiated in Edinburgh.
And the Scottish nationalist government has made it clear the “only acceptable” change to the formula would be financial independence from the UK, which would result in the system’s abolition.
The latest twist in a row that has dogged Whitehall for decades comes as passions have been inflamed by free tuition for students and care for the elderly north of the border.
The North East receives more cash per head than the English average, but still gets £576 less per person than Scotland under the arrangements. Overall, Scotland receives £1,500 more than England per head of population.
Last night, demands for the system to be scrapped intensified as senior Newcastle councillor Greg Stone said: “We have been talking about this long enough in the North East.
“We don’t need words from Gordon Brown, we need action and I think people in the North East will see through Labour spin on this issue.”
The Liberal Democrat added: “We want to see progress but the problem we have got is that Scottish Labour backbenchers will not take kindly to any deal which would reduce their current funding level.” Hexham Tory MP Peter Atkinson said the “unfair” arrangements must be looked at, but expressed scepticism about whether a proper review was under way.
Mr Atkinson suggested it could be more to do with political fighting between Labour and the Scottish National Party.
The formula’s author Lord Barnett also renewed his calls for an overhaul.
He drew it up in the 1970s when he was at the Treasury as a temporary solution to decide who gets what in a spending settlement.
“People in England will start to say, look what the hell is going on here?
“They are getting £1,500 more a head than we are and we want separation, never mind the Scottish. I am not in favour of separation, I am in favour of the UK. I am very worried about it,” said the peer. But Lord Barnett called for an “independent” inquiry led by peers after questioning whether a review was under way.
He warned the Scottish Parliament would not vote for changes.
A Number 10 spokesman denied the Prime Minister ordered a review.
He insisted that only a “factual” paper on funding systems, setting out how they worked, was being published to inform the debate on devolution.
“The Scottish Parliament has recently approved a review process aimed at strengthening devolution,” added the spokesman.
“As the Government announced to Parliament in January, the Chancellor will lay before Parliament a factual paper on the funding mechanism for the devolved administrations but there are no current plans to change the Barnett Formula.”
