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Call to abolish Barnett formula


Joel Barnett, who inspired the formula that bears his name, arriving for a cabinet meeting

Joel Barnett, who inspired the formula that bears his name, arriving for a cabinet meeting

Joel Barnett, who inspired the formula that bears his name, arriving for a cabinet meeting

Abolishing the Barnett formula would be a fitting tribute to the man who devised it, peers said today.

The House of Lords paid tribute to Labour peer Lord Barnett, a former Cabinet minister, who died on Saturday aged 91.

As chief secretary to the Treasury in the 1970s, he came up with the formula for allocating public money to Scotland, Wales and Northern Ireland, but has long argued that it was a temporary solution and needed to be replaced.

Plaid Cymru peer Lord Wigley said Lord Barnett was "a lovely, gentle, intelligent colleague".

At a question time in the Lords, Lord Wigley said: "He was among the first to recognise that the funding formula standing in his name was by now in need of radical reform.

"If Wales were to receive the same level of funding as does Scotland, relative to population and the portfolios devolved, Wales would get a staggering £1.2 billion a year more than is currently the case.

"On what possible basis of equity can Wales be denied parity with Scotland in regards to such funding and would it not now be a fitting tribute to Lord Barnett if the Government today pledged to revise the formula to deliver for Wales parity with Scotland in funding matters?"

Treasury spokesman Lord Newby said Lord Barnett has been a "very formidable parliamentarian".

"He was a delight to have as a sparring partner and I will certainly miss having him in this chamber very much," he said.

But he told Lord Wigley: "While there are no changes to Barnett in prospect, we have agreed with the Welsh government to reconsider the arrangements for jointly considering relative funding in advance of each spending review."

Tory former Scottish secretary Lord Forsyth of Drumlean described Lord Barnett as "a good friend and a great person in this House".

But he demanded: "Can you explain to me how the vow that was made by all three party leaders in the concluding days of the Scottish referendum, which says they will share our resources 'equitably' across all four nations is consistent with keeping the Barnett formula."

Lord Newby said the system for funding would change as the country moved towards a greater degree of devolution in Scotland.

"When a greater degree of taxation powers are devolved to Scotland the importance of the Barnett formula will be proportionately diminished," he said. "It is not as though we are standing still on this."

Lord Elystan-Morgan, a former judge and independent crossbencher, said Lord Barnett had been a "splendid" friend and had only intended the formula to last for a short period.

Lord Newby replied: "The Barnett formula is the opposite of most Government policies which don't survive very long.

"It has survived a lot longer than anyone ever envisaged."

Labour peer Lord Anderson of Swansea said the issue was "fair funding" and not specifically the formula.

He asked: "Would you look at a multitude of matters including helping Wales by abolishing the tolls on the Severn Bridge, which amount to a tax on Wales?"

Lord Newby told him: "The Barnett formula is a bit like the Schleswig-Holstein problem, virtually no one understands how we have got to where we are today.

"The key question is how much money makes its way to Wales and in the period ahead Wales will be receiving a figure in line with most definitions of what most people think is fair."

He said that in 2012-13 in England per capita funding was just over £6,000, whereas it was just under £7,000 in Wales.

Labour's Lord Peston, a close friend of Lord Barnett, said: "Lord Barnett will be remembered for his formula, but those of us in this House will surely remember that he contributed to a vast number of other topics and therefore deserves for all of that as well.

"We all agree that he will be missed much more than perhaps many of us will be missed when our time comes."

Labour leader in the Lords Baroness Royall of Blaisdon said: "Lord Barnett was an extraordinary man as an MP, a minister, a colleague, and a friend to all benches in this House.

"He was diligently holding the Government to account and doing his utmost to ensure the best for the people of this country until just a few weeks ago."

Liberal Democrat Lord Thomas of Gresford described Lord Barnett as a "delightful" person.