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Wednesday, September 17, 2014

Barnett speaks

Despite having been described as deceased by an audience member on a BBC Wales programme on Monday evening, Lord |Joel Barnett is alive and well, and at 90 years old (he will be 91 next month) still capable of making headlines.

Lord Barnett was the man who, as Chief Secretary to the Treasury, devised the population based funding formula which determines how much money is given to Scotland, Wales and Northern Ireland. It was intended to be a temporary fix for a 'year or two' but has persevered for 36 years and is now a centre of controversy in the Scottish Independence Referendum.

As the Telegraph points out, the leaders of all three main political parties have pledged to continue using the formula, which sees Scotland receive £1,623 per head more than the rest of the UK, if Scotland votes to stay in the Union. However Tory MPs warned the move could be voted down in the Commons. The paper says that Mr Cameron faces a potential "bloodbath" at the hands of his own party:

Lord Barnett, 90, told The Telegraph: "It is unfair and should be stopped, it is a mistake. This way is terrible and can never be sustainable, it is a national embarrassment and personally embarrassing to me as well.

"If we want to give them some money after devo-max OK, but do it honestly and openly. Not by doing so under the table like this."

This is a long-running sore in Wales of course, where it is estimated that Wales is underfunded to the tune of £300m-£400m a year as a result of the formula. This is something that the Liberal Democrats have already addressed.

We have made a manifesto commitment to update the analysis of the Holtham Commission, which identified the funding gap, and to top-up the Welsh block grant to an equitable funding level. We will also immediately entrench a Barnett ‘floor’ so the underfunding gap could not increase.

This is not something that Labour and the Tories thought of doing prior to the joint announcement, and with more powers promised for Scotland in the event of a 'no' vote as well, it seems that we are now drifting into one of two scenarios.

The first is that we create a massively unbalanced (and still unwritten) UK constitution in which Scotland gets more than its fair share of the cash and home rule, whilst the rest of us struggle on with the crumbs. 

Or, we set up a proper constitutional convention and ensure that the goodies promised to Scotland are delivered within the structure of a properly federal UK, including England and/or the English regions. That is my preference and, I hope, that of my party.

Of course the third option is that Scotland votes 'yes'. In that case all bets are off.
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