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Barnett Formula

Volume 301: debated on Thursday 27 November 1997

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If he will make a statement on the future of the Barnett formula. [16592]

The Government have made it clear that they intend to keep the existing arrangements. The Government's position was clearly set out in the two White Papers on which the referendum campaigns in Scotland and Wales were fought and won.

I thank the Minister for that reply. Does he agree with members of his own party that there should be cuts in Scottish public expenditure?

I do not think that anyone is saying that. We are determined to ensure that all parts of the country benefit from our economic policies and our spending decisions. That has always been so, and it always will be.

After all the assurances given in and out of the House before and during the referendum, were there by any chance to be any tampering with the Barnett formula, would there not then be a moral obligation to hold yet another referendum on the question, "Do you approve of the Scotland Act 1997–98?"

I never thought I would see the day when my hon. Friend the Member for Linlithgow (Mr. Dalyell) would call for another referendum on devolution. Our position was clearly set out in the White Paper; it remains our position.

I welcome the Chief Secretary's affirmation that that will be the position. I am sure that he would agree, having campaigned on a White Paper in which the Barnett formula was a key component in the funding of the Scottish Parliament, that any Government departure from that position would be a breach of faith. But if there is a need to investigate divergence, will the right hon. Gentleman bear in mind that, under the local government distribution from central Government, Westminster gets £864 a head and Rutland gets £213 a head, which is a greater divergence than any between Scotland and the rest of the United Kingdom?

The hon. and learned Gentleman will know that the Deputy Prime Minister is to make a statement on the local government settlement for England shortly. I do not think I ought to anticipate it.

Does the Chief Secretary agree that it would be supremely self-contradictory if the Barnett formula were now to be abandoned, given that it was invented 20 years ago to cope with the then anticipated devolution of 1978–79? Would he further agree that, in the experience of all countries to have introduced it, devolution can be introduced successfully only if there is an effective resource transfer mechanism from rich to poor regions?

The principle of ensuring transfers between the regions and nations of the United Kingdom has been stuck to by successive Governments of both political colours. I repeat what I said at the outset: the Government fought and won the referendums on the basis of the White Papers; that remains our position.

Perhaps the Chief Secretary would like to count up the number of Members of Parliament who had heard of the Barnett formula outwith the past couple of weeks. More seriously, what assessment has been made of needs? What commitment is there to ensuring that these arrangements continue? We should bear in mind the point raised yesterday with Madam Speaker about the Treasury Committee's assessment of the Barnett formula. May we have an assurance that these discussions will be open and transparent?

This Government are always open. I would agree that there are many people outside and not a few inside the House who may not be aware of what the Barnett formula does. I would commend to them the evidence recently received by the Treasury Select Committee. At the risk of repeating myself, I will state that the Government's position on Barnett and needs assessment remains exactly as set out in the White Papers.