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Barnett Formula

I understand the point that my noble friend makes, but it is very difficult to make any transition from one formula to another at a time when significant cuts have to be made. It just overloads the system. I join the Select Committee in wanting to move to a needs-based assessment. That is the position of my party; but the timing is far from ideal. I apologise to my noble friend Lord Lawson if he thinks that I am being insufficiently courageous at the Dispatch Box today. I can see by the look on his face that he does think that. The Government have issued their White Paper on devolution and said that they wished Scotland to move towards raising some of its income by way of taxation, but that, as other noble Lords have pointed out, is not an answer to the Select Committee’s report, because money still needs to be allocated to Scotland. That leaves the Barnett formula still needing to be dealt with. My noble friend Lord Forsyth pointed out that it will not be possible for a Scottish income tax to pick up the strain of any gap that would open up between a needs-based assessment and the current basis. Indeed, whatever the Government plan for the position in Scotland, the position in Wales and Northern Ireland remains to be dealt with under the Barnett formula. This is not an issue that we will settle today. I am sure that we will return to it, one way or another, in the next Parliament. It may grieve the noble Lord, Lord Barnett, but I think that he will have to put up with the formula bearing his name for quite a little while longer.