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Barnett Formula

Remedying abuses, of course, is a good deal easier than correcting advantages. The noble Baroness has been in politics long enough to know that that which people have they are most reluctant to yield. She is merely reflecting the general difficulties we have in this area. However, I emphasise that when the Secretary of State for Wales was talking about this point, he was aided by the fact that the Chief Secretary to the Treasury had also indicated that he appreciated significant criticisms with regard to the Barnett formula. As he said, the Barnett formula was not exactly constructed in stone. I know my noble friend has created a significant piece of practical history over the last 30 years, but he has been one of the keenest advocates of looking at the issue again because of some of the difficulties, and the Chief Secretary to the Treasury agrees with him. This is not an issue that can be resolved in the short term: it requires a great deal of consideration and a Government with a significant mandate for reform—one who have the power to look at issues over the long term. That is a Government who will be returned in June, or maybe a little earlier, when this Administration are returned, and we will be able to look at the Barnett formula against a background of what the committee and this House have done, allied to those very important reports which have been presented against this background. They have created a framework within which the disadvantages of the Barnett formula are such that a reforming Government would need to look at them. At this stage, I can go no further than that. I agree with the noble Lord’s comments about the block grant. It is important that any change to the Barnett formula does not create micro-management of economies which have been used to this degree of discretion. This is one of the virtues of the Barnett formula, and we will need to protect that. I recognise the value of this report, and of all noble Lords who contributed so fully to this debate, but I cannot go any further than that at this stage. If we renewed this debate in a couple of months’ time, however, I have no doubt that, from this Dispatch Box, I would be a good deal more optimistic.