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Barnett Formula

The point that I was making, if my noble friend had followed me closely, was that this is a matter of practicalities and timescale. Until the needs-based assessment is fully conducted throughout Britain—for all parts of the United Kingdom—the Barnett formula can continue in the interim. I note that, while the Government welcomed the Calman commission’s recommendations, the shadow Chancellor of the Exchequer, the honourable Member for Tatton, stated in the Scotsman on 26 November: ""We will use the recommendations in the Calman report as a starting point. We believe the Scottish Parliament needs to have greater powers over raising and spending taxes and borrowing"." To sum this up in one sentence for the noble Lord, Lord Forsyth, if there is to be a massive reduction, there should be the opportunity for substitution. That is the essence of the Calman recommendation. The shadow Chancellor also emphasised that the most important aspect of the Calman commission was that it had as its foundation, ""the protection and continuation of the Union"." The Select Committee report does not say by how much funding for devolved responsibilities in Scotland would be cut. As the noble Lord, Lord Forsyth, said, Professor David Bell, who I understand was advising the Welsh commission, has stated that moving down this path could lead to a reduction of £4.5 billion for Scotland. That would have dramatic effects on the Scottish budget. Many experts believe that, while an immediate change in the funding formula would mean a huge loss for Scotland, it would make a relatively small difference in funding per head in England. Indeed, the leader of the Conservative Party has been quoted as saying that there is no crock of gold for English regions. That raises a real difficulty at a time of recession, when public expenditure is likely to be cut and severely restrained throughout the United Kingdom. The question arises: is it wise to make major cuts over and above what is needed to bring the UK’s deficit under control? I urge considerable caution over any swift moves to replace the Barnett formula, while hoping that the Calman proposals will be considered as an overall package of measures to be brought forward. Constitutional reform has traditionally played itself out over a long timescale. The opinion polls in Scotland show that the voters believe that, on the whole, the Scottish Parliament is working well; in fact, a clear majority favours giving it increased powers and only a much smaller minority wishes to see Scotland torn out of the union. I am not one of those who believe that the form of the union and the partnership should be constrained in a constitutional straitjacket. For those of us who wish to see the union thrive and prosper, I refer to Charles Darwin, who made the claim that the species that survived were not necessarily the cleverest or the strongest but those that could best adapt to changing circumstances. I rest my case.