Friday, July 03, 2009

Lord Barnett: Spending Cuts Are Inevitable

Former Labour Chief Secretary to the Treasury Lord Barnett has told the BBC programme STRAIGHT TALK (in an interview to be broadcast tomorrow) that he thinks spending cuts are inevitable after the next election and also hopes that a future government will overhaul the Barnett Formula which distributes money to Scotland, Wales. He says it should be scrapped and replaced by one ‘based on need… that brings about more equity between England, Scotland and Wales’. He continued...

My own guess is, given that whoever comes into Government after the election will have serious problems on the public expenditure front. It will give them an opportunity to change to have a formula based on need, and gradually – they can’t do it in one go, I don’t expect that to happen – but over a few years, I would hope that they’d achieve a needs based formula that brings about more equity between England, Scotland and Wales.

Andrew Neil: is it not true that whoever wins the next election, there will have to be public spending cuts?
Lord Barnett: Oh, that’s absolutely right. I’ve no doubt at all about that. And from, after the end of the recession, hopefully it comes at the end of 2010, then there will have to be public expenditure cuts and possibly tax increases as well.… there will certainly be a need, as you rightly say, for major cuts in public expenditure and possibly tax increases as well.
AN: Do you think though that any Government – Labour or Conservative or coalition Government – will have the guts to change things?
LB: Well, the present Government certainly have made it quite clear they don’t want to review the formula. When David Cameron first went to Scotland as Leader, on his very first visit, astonishing to me, he assured them he would keep the formula and it’s the same formula that lost them all the seats.
AN: Every seat in Scotland.
LB: Since then he’s hedged his bets a bit. My own guess is, given that whoever comes into Government after the election will have serious problems on the public expenditure front, it will give them an opportunity to change to have a formula based on need, and gradually – they can’t do it in one go, I don’t expect that to happen – but over a few years, I would hope that they’d achieve a needs based formula that brings about more equity between England, Scotland and Wales.


Barnett is a respected figure. Perhaps his own party will listen to him. I know the Barnett Forumla will be revisited in a way where funding is based on need not on some thirty year old anachronistic formula which is totally out of date.

14 comments:

Not a sheep said...

Gordon Brown, Ed Balls and the rest of the Labour cabal will not listen to reason or to contrary opinions. They have chosen their path and will not be diverted.

Anonymous said...

Utter cobblers from Barnett, the subject of his formula came up in the Lords about 6 months ago and he defended it saying it still upto the job. This is another background uturn by the Government so that they can save expenditure if they stay in power.

Anonymous said...

I note that Northern Ireland is not mentioned, possibly because no-one wants to face up to the shameful way in which genocidal terrorists and their separatist sympathisers have been bought off by Labour and Tories alike with British taxpayers' money.

Catosays said...

Whether it's cobblers or not (Anon @6.02) it's certainly something which needs desperately to be addressed.

Thatsnews said...

Oh, dear. There'll be some nasty spin against Lord Barnett, any time soon. Whispers. Veiled attacks. Snide innuendo...

Carl Gardner, Head of Legal said...

I don't know whether he still does, but he used to have the most amazing box at Old Trafford, looking down at the ground from one corner flag as I recall.

I'm not sure what steer that gives us in terms of his formula, though.

Anonymous said...

Anonymous 6:02 I erred sorry, ( I have just checked Hansard) Barnett did say it needed a review it was the Gov not wanting to lose Scottish votes who kept it.

Again my apologies

ken from glos said...

Of course Barnett has to go, along with final salary pension schemes.!!

Am on the receiving end of final salary pensions and believe you me it costs a fortune and is unsustainable.

Marian said...

If common sense prevailed instead of stupid party politicking by New Labour and the Tories, the UK government would accede to the long standing SNP demand for the transfer of full fiscal autonomy tp Scotland.

New Labour and the Tories have no credibility any lonber in Scotland because of their support for the much criticised Barnett formula as well as the recent shambolic Calman proposals which only proposed that limited taxation powers be transferred to Scotland.

Toque said...

Lord Barnett is such a fool. Doesn't he know that the Barnett Formula is based on need, electoral need.

"We are due to publish a paper on the Barnett formula soon, but I say to my hon. Friend that the allocation of funds in the United Kingdom is based on a needs assessment that started more than 30 years ago, has been agreed by all parties subsequently, and has been followed by every Government since. It is based on the idea that we should allocate resources in the UK on the basis of need." - Gordon Brown.

"The Barnett formula is for the whole of the United Kingdom. It is not for one part of the UK. It covers all areas of the United Kingdom, and the formula is based on the needs of each different part." - Gordon Brown.

"The settlement is based on the Barnett formula, and he knows that it is worked out carefully to fulfil the needs of Northern Ireland, Scotland and Wales." - Gordon Brown.

Either Lord Barnett is a liar, or Gordon Brown is.

Elliot Kane said...

Smart and eminently sensible. I hope politicians on all sides of the house listen to this guy.

Andy said...

Lord Barnett has been saying for some years that his formula is unfair to England.

Stephen Gash said...

The Barnett Formula is a smokescreen covering the rest of benefits flooding out of England into Scotland and the rest of the UK.
Shipbuilding is an obvious example. Perhaps one of the most insulting examples is top-up fees being managed by a Scottish company. Another is the unclaimed child bonds for the whole of the UK being managed by a Scottish Friendly Society. Of course RBS now handles the HMCR bank account which was moved from the Bank of England. The onslaught against the BofE is largely going unreported, which means the usual Anglophobic conspiracy between the media and New Labour is controlling matters as per usual.
We need to blow the smokescreen away with the fresh air of an English Parliament. Independence would be preferable. At least then the English would not have to pay for the pretence of Andrew Murray supposedly representing them as a 'Brit'.

Salmondnet said...

Brown tells Brownies, Barnett doesn't. The formula is not based on need and should go. If it is replaced by full fiscal autonomy as Marian and the SNP want, that should be accompanied by full independence. No further Scottish voice in anything English, or vice versa.