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Lords call for an end to Barnett Lords call for an end to Barnett
(about 2 hours later)
The system which helps decide the level of public funding in Scotland, Wales and Northern Ireland has been condemned as "arbitrary and unfair".The system which helps decide the level of public funding in Scotland, Wales and Northern Ireland has been condemned as "arbitrary and unfair".
A Lords committee has said the Barnett formula should be scrapped as Scotland's needs are not as great as other parts of the UK. A Lords committee said the Barnett formula should be scrapped as Scotland's needs were not as great as other parts of the UK.
The Barnett formula was set up in the 1970s and was seen as a short term fix. The system was set up in the 1970s as a short-term fix but became the established funding formula for the UK.
But it became established as the method of deciding how money is divided up between the nations of the UK. The Scottish National Party repeated its call for full fiscal autonomy.
This is thought to be because it was easy to administer and convenient for Treasury ministers. Peers have said Barnett should be replaced by a system that recognises changing population levels and the differing economic needs of the devolved nations.
Peers have said it should be replaced by a system that recognises changing population levels and the differing economic needs of the devolved nations.
They said England and Scotland had markedly lower overall needs per head of population than Wales and Northern Ireland.They said England and Scotland had markedly lower overall needs per head of population than Wales and Northern Ireland.
The bottom line is that we must not have another Westminster fix imposed which could leave Scotland worse off than at present Stewart HosieSNP It must be replaced with a system of full fiscal responsibility giving Scotland the powers over taxation, including oil and gas Stewart HosieSNP Treasury spokesman
Responding to the publication of the Lords report, SNP Treasury spokesman Stewart Hosie said the only acceptable alternative was full fiscal autonomy for Scotland, allowing the country to raise all the money it spends.Responding to the publication of the Lords report, SNP Treasury spokesman Stewart Hosie said the only acceptable alternative was full fiscal autonomy for Scotland, allowing the country to raise all the money it spends.
"That is the best and simplest solution - anything less would be messy and unsustainable, and could well leave Scotland worse off," he said."That is the best and simplest solution - anything less would be messy and unsustainable, and could well leave Scotland worse off," he said.
"All parties recognise that the Barnett formula is no longer sustainable and should be replaced - but it must be replaced with a system of full fiscal responsibility giving Scotland the powers over taxation, including oil and gas, and spending that are needed to effectively manage the Scottish economy.""All parties recognise that the Barnett formula is no longer sustainable and should be replaced - but it must be replaced with a system of full fiscal responsibility giving Scotland the powers over taxation, including oil and gas, and spending that are needed to effectively manage the Scottish economy."
He added that the case for financial independence was reinforced by the most recent Gers (Government Expenditure & Revenue Scotland) report which showed that in 2007/08 Scotland's current budget surplus was £219m, compared to a UK deficit of £5.3bn - and that Scotland had been in budget surplus now for three successive years, to the tune of £2.3bn.He added that the case for financial independence was reinforced by the most recent Gers (Government Expenditure & Revenue Scotland) report which showed that in 2007/08 Scotland's current budget surplus was £219m, compared to a UK deficit of £5.3bn - and that Scotland had been in budget surplus now for three successive years, to the tune of £2.3bn.
"The bottom line is that we must not have another Westminster fix imposed which could leave Scotland worse off than at present," Mr Hosie said.
"That is why independence and equality represent the best future for Scotland, and why the SNP are the leading party in Scotland."
'Need for change''Need for change'
Mr Hosie agreed with the Lords' suggestion that some parts of spending on the London Olympics, such as the £3bn on spent on regeneration, should be considered English spending rather than UK spending and should therefore be counted in any Barnett calculations.Mr Hosie agreed with the Lords' suggestion that some parts of spending on the London Olympics, such as the £3bn on spent on regeneration, should be considered English spending rather than UK spending and should therefore be counted in any Barnett calculations.
"It is clear the current arrangements are not working, and we will want to be sure that Scotland has not been swindled out of our Barnett share," he added."It is clear the current arrangements are not working, and we will want to be sure that Scotland has not been swindled out of our Barnett share," he added.
Plaid Cymru's Adam Price said: "Plaid has long opposed the workings of the Barnett formula and now this view has been completely vindicated both by the Holtham Commission, and now in the House of Lords committee report.Plaid Cymru's Adam Price said: "Plaid has long opposed the workings of the Barnett formula and now this view has been completely vindicated both by the Holtham Commission, and now in the House of Lords committee report.
"The key issue at stake here is that Wales is losing out because of the Barnett formula, and is set to suffer even more unless it is urgently replaced by a needs-based formula."The key issue at stake here is that Wales is losing out because of the Barnett formula, and is set to suffer even more unless it is urgently replaced by a needs-based formula.
"All the evidence now points towards the need for change. "All the evidence now points towards the need for change."
"As this report clearly shows, the Barnett formula was only ever designed as a short-term quick fix. It is now so outdated that any opposition to scrapping it would be irresponsible and an insult to the people of Wales."