We had a rather surprising conversation with Alan Trench of the “Devolution Matters” blog yesterday, and it inspired us to get on with something we’ve been meaning to do for ages anyway: compiling evidence regarding the future of the Barnett Formula for UK public spending should Scotland vote No to independence.
Quotes in no particular order. (Click for sources and dates.) More as we find them.
DAVID CAMERON, UK PRIME MINISTER (Con)
“Asked if it was time to get rid of the formula, Mr Cameron says: “This cannot last forever, the time is approaching … If we replace the Barnett Formula with a needs-based formula, Scotland has very great needs and Scotland will get very great resources.’
ALISTAIR CARMICHAEL, SECRETARY OF STATE FOR SCOTLAND (Lib Dem)
MARGARET CURRAN, SHADOW SCOTTISH SECRETARY (Lab)
THE HOUSE OF COMMONS JUSTICE SELECT COMMITTEE
“The Barnett Formula is overdue for reform and lacks any basis in equity or logic. It creates controversy in all of the constituent parts of the UK. There is controversy in England that the Barnett Formula allows for higher levels of public spending in Scotland from the UK Exchequer and does not deal with different needs in different parts of England.
We urge the Government to publish its position as a matter of some urgency and to proceed to devise a new formula which is needs based, takes into account regional disparities in England as well as in Scotland and Wales, is transparent and is sufficiently robust to enable long-term planning.”
THE LOCAL GOVERNMENT ASSOCIATION, ENGLAND
“Council leaders in England are to campaign for Scotland’s block grant to be cut. Local government chiefs south of the Border say they are envious of the powers and funding given to a devolved Scotland and have revealed they will push for the UK Treasury to scrap the Barnett formula, the system that gives Scotland more per head of UK funds than it does to England and Wales.
Sir Merrick Cockell, head of the Local Government Association (LGA) in England, has claimed that his counterparts in Scotland are ‘in wide-eyed disbelief’ at the cuts English councils are having to accept, compared to those they are having to implement.”
CONSERVATIVE MPS, VARIOUS
Gordon Henderson, the MP for Sittingbourne and Sheppey, said uneven public spending was fuelling English resentment at Scotland and undermining the Union the Conservatives are committed to preserving.
‘The Barnett Formula is well out of date and needs to be scrapped entirely. If we are a United Kingdom – and I hope we remain so – then we should all receive the same level of support from the Government.’
Andrew Selous, the MP for South West Bedfordshire and an aide to Iain Duncan Smith, the Work and Pensions Secretary, highlighted comments from other senior ministers that he said raised doubts about the formula’s future.
Cheryl Gillan, the Welsh Secretary, said last year that the formula was ‘coming to the end of its useful life’. As a junior Treasury minister, Justine Greening, now the Transport Secretary, also responded sympathetically to calls for reform.
Mr Selous said: ‘I am very encouraged that two Cabinet ministers have gone on the record to say that the Barnett Formula will not be here for ever. This is something that people in England are concerned about.'”
MORE TORY MPS (VARIOUS)
“Almost three-quarters of Tory MPs say that the way public money is distributed around Britain should be reformed. And most believe that the current devolution settlement giving Scotland its own parliament is unfair to England and must change.”
THE ALL-PARTY PARLIAMENTARY TAXATION GROUP
“The APPTG echoes the findings of the House of Lords Committee on the Barnett Formula in recommending that a shift is required towards a ‘needs-based’ formula, whereby a ‘dynamic’ and ‘simple, clear, and comprehensible’ system is used to allocate resources to the devolved regions ‘based on an explicit assessment of their relative needs’, calculated ‘per head of population’.”
RUTH DAVIDSON, LEADER, SCOTTISH CONSERVATIVE PARTY
STRUAN STEVENSON, SCOTTISH CONSERVATIVE MEP
“The Scottish Conservatives will never have any fertile ground to plough in Scotland as long as we live on a block grant from Westminster. We are the party that can offer efficiency and low tax and a competent government but you can’t do that when you are funded through the Barnett block grant.”
CARWYN JONES, FIRST MINISTER OF WALES (Lab)
“Asked if he could see Barnett reformed without touching the current generous allocation of funds to Scotland, Jones said: ‘It would be difficult to envisage a situation where there would be widespread Barnett reform with an independence referendum pending in Scotland.
THE SCOTTISH LIBERAL DEMOCRATS
“Recommendation 26: The UK should move to an independent, transparent, needs based formula to serve all parts of the UK well and allow fiscal federalism to be sustained in the long term, recognising that the Barnett Formula was only ever intended to be a temporary measure at the end of the 1970s.”
LORD LANG OF MONKTON (Con)
“On the Barnett surplus, everyone knows that the basis of the present distribution of funds is out of date. We know that that, too, created an imbalance that can be put right. A fair-minded Scotland would agree. We need an up-to-date measurement of relative need in Scotland and elsewhere in the United Kingdom.” (col. 1365)
THE TAXPAYERS ALLIANCE
“The Barnett Formula has a troubled history and has failed to address the extremely unfair situation of English taxpayers heavily subsiding Scotland. Everyone is struggling to make ends meet, and it is long overdue for the Government to lift this burden from taxpayers’ shoulders. English taxpayers want an end to subsidising Scotland”
THE CALMAN COMMISSION
“The commission, which officially publishes its report on 15 June, has decided major changes need to be made. Instead of the Barnett Formula it wants Scotland to have taxes raised in the country – including income tax, VAT, stamp duty and inheritance tax – assigned directly to the Scottish budget.
Significantly, however, experts believe the change will result in a drop in Scotland’s budget – which could lead to cuts in services. The proposals will be seen by some as evidence the commission was a smokescreen to cut Scotland’s budget.
THE HOLTHAM COMMISSION
“We believe that Barnett must ultimately be superseded by a needs-based formula. No doubt that will need to be accompanied by an adjustment mechanism since the formula may imply substantial changes to block grants and it would be both disruptive and politically difficult to introduce those rapidly.” (Section 3.9)
THE INSTITUTE FOR PUBLIC POLICY RESEARCH
It would be open to the Scottish government to decide whether it wanted to raise more revenue from the tax bases available to it to continue to pay for higher levels of public services, or to reduce spending to match that ‘standard’, need-related, level of spending.” (Section 6.2)
THE DAILY TELEGRAPH
“The Barnett Formula, under which Scotland, Wales and Northern Ireland receive more public spending per head than England, has long rankled south of the border. Even Joel Barnett, who was chief secretary to the Treasury when the system was introduced in the Seventies as a temporary measure, subsequently disowned it.
If the Scots vote to remain in the UK, as we hope they do, it cannot be as a result of a bribe from the English. A few years ago, the Calman Commission recommended scrapping Barnett, reducing income taxes in Scotland and then allowing Holyrood to levy its own rate on top, introducing an enhanced element of accountability and fiscal self-governance.
Such reforms should be openly debated ahead of the referendum: for the Scottish people are entitled to know that even if they vote to stay in the UK, the current method of financing public spending should not be allowed to continue.”
THE UK PUBLIC (via The Sun/YouGov)
IAN DAVIDSON MP, CHAIR, SCOTTISH AFFAIRS SELECT COMMITTEE (Lab)
TIM MONTGOMERIE, CONSERVATIVE HOME
“Drawn up more than three decades ago by now Lord Barnett the formula distributes taxpayers’ money across the UK. Even Lord Barnett now describes the formula as ‘unfair’. On both the Left (IPPR) and Right (TaxPayers’ Alliance) there is agreement that the formula is well past its sell-by date.
Scotland and Northern Ireland receive a much greater share of UK taxpayers’ money than need in either country would require. The biggest losers are the poorer English regions and Wales. There has long been a campaign in Cardiff for Barnett’s reform.
This seems one of the great no-brainers of British politics. England is losing up to £4.5 billion every year because a Conservative-led government is sending that money to parts of the UK that stubbornly refuse to vote Conservative AND there is widespread agreement that the system isn’t driven by social need.”
LORD JOEL BARNETT, DEVISOR OF THE BARNETT FORMULA
In an interview with GMTV, to be broadcast tomorrow, Lord Barnett said the system should be replaced with a formula reflecting the needs of each region, whether they are in England, Scotland, Wales or Northern Ireland.
He said: ‘It’s quite wrong. It clearly should not be based on per head expenditure but should be based on needs in particular areas. The amount of money going to Scotland on a needs basis by comparison, say with my own North West or the North East, is far higher than it should be, so it should be changed.‘
He added: ‘They’d lose quite a bit in my guess, done on a proper needs basis. They paid for the whole of the enormous cost of that new parliamentary building, they paid for it without having to raise an extra penny.’
In the interests of fairness we’d balance these quotes with counterpoints, but it’s somewhat more difficult to find a voice prepared to speak out in favour of continuing the Barnett Formula than it is to find a chorus calling for its abolition. The only vague commitments made to it have been carefully weasel-worded statements that it will carry on for the rest of the lifetime of the current government, ie around 15 months.
Indeed, the only person who we’ve ever managed to pin down making an unequivocal assertion that Barnett will survive for longer than that (“for 30, 40 more years”) is the “Better Together” campaign director Blair McDougall, which is just about as close to a cast-iron guarantee that it won’t as you can get.
If you find any others, do let us know.