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Select Committees: Barnett Formula

Volume 693: debated on Wednesday 4 July 2007

asked the Leader of the House:

Whether she will support a proposal to the Liaison Committee for the appointment of a Select Committee on a review of the Barnett formula.

My Lords, it is my role, as a member of the Liaison Committee, to consider carefully all such proposals, along with the other members of the committee. If my noble friend Lord Barnett decides to submit a proposal to the committee in the next Session, I would of course welcome the opportunity to give it full consideration.

My Lords, I note what my noble friend has said, but she has not been a member of the Liaison Committee for very long. I hope that she is aware that the Chairman of Committees has replied already to my request, indicating that, although he could not agree to an ad hoc committee this Session, because one has already been appointed, he will accept an application from me in the next Session. I can tell my noble friend that I will apply.

My noble friend will be aware that recently I quoted the latest Treasury figures, which showed that expenditure per head is £1,500 less in England than in Scotland. Clearly, that is unacceptable. However, as both major parties are opposed to change, I am asking only for support for a review, which I am sure she will accept. Is she aware that she has a unique opportunity—indeed, the House of Lords has a unique opportunity—to review this whole question by agreeing to set up an ad hoc Select Committee, especially as the Government, following yesterday’s important announcement, now agree to a great deal more parliamentary democracy? Now that she is a member of the Liaison Committee, will she give me an assurance that she will not oppose but support my request? She will note that I put my Question not to the Government, but to her personally, although I did not know at the time that she would be a member of the committee.

My Lords, one thing that I have learnt in the past few days is how many unique opportunities I have apparently been given, as noble Lords have been keen to point out. Indeed, as my noble friend knows, I have been a member of the Liaison Committee, with which I have not yet met, for only a few days. I will consider very carefully what is put before it. I have seen the correspondence and I completely understand that a new ad hoc committee has just been set up. I will consider the matter carefully, but my noble friend must understand that I cannot make a commitment at this point.

My Lords, if the noble Lord’s proposal does not find support among unionists on all sides of this House, it will clearly be untenable for Scotland to continue to receive more expenditure per head while implementing policies such as having free tuition fees for Scottish students when English students have to pay, allowing Lucentis, which prevents blindness, to be prescribed on the NHS in Scotland but not in the UK, and having free care for the elderly north of the Border. I accept that the Scottish Parliament is entitled to take these decisions, but it has to do so in the context of a funding system that is seen to be fair to all parts of the United Kingdom.

My Lords, the noble Lord makes powerful remarks and I am well aware of his knowledge of Scotland. I am sure that the views of your Lordships’ House, not least those expressed in our discussions today, will be taken into account by the Liaison Committee when making its decisions.

My Lords, has it not for a long time been the policy of all political parties to try to make sure that resources are spread throughout our United Kingdom? Therefore, it is a little dangerous to play the politics of resentment by suggesting that one region or one part should get this or that much money, as we are seeing happen again in London’s politics. It is important to look at this in terms of ensuring proper levels of aid and development throughout the regions and nations of our United Kingdom, while making sure that, at the local level, there is an opportunity to raise taxes and spend them.

My Lords, a whole range of taxation issues emerges from the noble Lord. We believe that the Barnett formula has served us well, but it is reasonable and understandable that from time to time representations are made about whether it should be reviewed. They are made from different viewpoints; that is probably why the formula has lasted so well and been so successful. As my noble friend Lord Barnett knows, if the committee believes that this is an interesting and worthwhile project, it will consider it properly.

My Lords, is not the key to this to look at not just expenditure but also the amount of tax raised in different parts of the United Kingdom, including the different regions in England? That would neutralise the separatist forces that now exist in parts of the United Kingdom, which have largely been brought about by the Scottish Parliament.

My Lords, as I said yesterday in our discussions of the Statement, we believe very strongly in the union. It is a very important part of the way in which we wish to be governed and it is important in terms of what we do in this country and our relations with Scotland, Wales and Northern Ireland. All these matters will be discussed in your Lordships’ House on many occasions. On the question about the Liaison Committee, I say again that that depends on the work that the committee wishes to do, having taken account of the views of your Lordships’ House.

My Lords, is my noble friend aware that, when the formula was introduced in 1974, it was accepted that it would last for only a year or two? It is only subsequent Governments who have failed to realise the importance of that and to adjust it in the light of circumstances.

My Lords, it is interesting that many things that have been brought in for a year or two survive the course. We believe that the arrangement will survive the course and have no plans to review it.

My Lords, does the Minister agree that the larger the number involved, the cheaper it is to administer? The 50 million people in England cost much less per head than the 5 million in Scotland because of the numbers involved. Scotland has an enormous area of moorland and so on, which involves much more expense. Furthermore, Scotland produces a lot of doctors who work in England.

My Lords, needs assessment is one of the issues involved and, within the formula, it is for the Scottish Executive, the Northern Ireland Executive and the Welsh Assembly to consider needs. That will include where the population is, the sparsity of population and where resources need to be placed. It is appropriate for them to do that.

My Lords, does the Minister agree that the needs of patients in England who require medication but who are refused by the NHS are just as great as the needs of patients in Scotland, who seem to get their medication quite easily? I ask that because the right honourable Member for Paisley and Renfrewshire South, when he was trying to describe the difference in money given per capita in England and Scotland, said:

“Taxes should be levied according to ability to pay, and assets should be distributed according to need”.

Do not patients need certain things?

My Lords, I pay tribute to the work of the National Institute for Health and Clinical Excellence, which has done a fantastic job making sure that we are able to provide the right quality and quantity of medication and supply. We should all support its work.