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MP criticises Coalition Government of failure to scrap the Barnett formula

7th July 2011
MP criticises Coalition Government of failure to scrap the Barnett formula

Gordon Henderson has criticised the failure of Coalition Government to take action to scrap the Barnett formula that ensures that Scots receive 20% more money per head of population than the English.

The formula, which was devised by Joel Barnett, the then Chief Secretary to the Treasury, as a short-term measure in 1978, and was based on approximate population figures at the time. The formula is used to allocate billions of taxpayers money and gives Scotland around £1600 per head more of public spending than the UK average.

In 2009 a House of Lords committee called for the Barnett formula to be replaced with a fairer funding mechanism for the UK’s regions, based on the current respective populations and economic needs. The committee declared that the formula was no longer fit for purpose.

The issue was raised again last week when Mr Henderson raised the issue at Deputy Prime Minister’s Questions, when he asked Nick Clegg:

“Does my right hon. Friend the Deputy Prime Minister understand the resentment felt by many taxpayers in my constituency when they see their taxes being used to help provide a range of free services in Scotland that are not enjoyed by the English? When will the Government take action to bring that unfair subsidy.”

Mr Clegg responded by saying:

“One of the reasons we are transferring a great deal of new fiscal freedom to the Scottish Administration through the Scotland Bill is to ensure not only that the Scottish Government enjoy greater freedom to raise and spend money but that they are held to account for it. That is exactly what we are seeking to achieve in the Scotland Bill.”

The response did not satisfy Mr Henderson, who said:

“It is simply wrong that English taxpayers are being asked to help subsidise for people living in Scotland a range of services not available in England, including free prescriptions, free hospital parking, free accommodation in care homes and free university tuition fees.

“There is widespread agreement that the Barnett formula has to be scrapped and replaced with a fairer system. Indeed, the House of Lords made it clear a couple of years ago that the formula was not fit for purpose.

“Something has to be done before the justifiable resentment felt by many people about the unfair subsidy English taxpayers are expected to contribute towards superior services north of the border, manifests itself in an anti-Scots backlash.”

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