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Barnett Formula

I thought that the noble Lord also said that one of the contributory factors to making it an economic success was that it had been the beneficiary of very high levels of public expenditure. If we agree that the formula should be changed on fairness grounds, how difficult is it? The Government have implied that it is really rather complicated. A number of noble Lords referred to the Independent Commission on Funding and Finance for Wales. Its report, published in December last year, looked specifically at the technical basis on which one could recast public expenditure on a fair basis. Unlike the Select Committee, which looked at four measures, the Holtham commission looked at six, sparsity being one and ethnicity the other of the two additions. Its conclusion was: ""A formula for calculating relative needs across the devolved administrations that combines simplicity with a high degree of completeness and is based on real world funding allocations by the UK Government and the devolved administrations finds that Wales should receive some £115 for every £100 of funding spent on comparable activities in England. At present, Wales receives only £112 for such activities. For Scotland and Northern Ireland, the figures generated by the formula are £105 and £121 respectively"." This report, along with the report by the Select Committee, proves that it can be done. A number of noble Lords spoke about the need for a long transition. Given the current public expenditure climate, the arguments for a very long transition are extremely strong. It is clear that to try to make substantial reductions to expenditure in Scotland when one is already making some reductions is politically impossible and undesirable. A 10-year transition, particularly given the current situation in terms of public expenditure, would be entirely sensible. I mentioned the expectations of your Lordships' House for the speech to be given by the noble Lord, Lord Davies, but the noble Lord, Lord Sewel, challenged the Conservatives to explain what they were going to do. Unless I was mistaken, I thought that I saw a hollow laugh and a shake of the head from the noble Baroness, Lady Noakes, as he made that point. Given the immense steam of enthusiasm on the Conservative Benches for a change of the formula towards a fair system, I hope that she will be able to go beyond the point to which we expect the noble Lord, Lord Davies, to be able to go and tell us that, were there to be an incoming Conservative Government, one of their first changes would be to move in the direction of this excellent report.