The Barnett Formula - Select Committee on the Barnett Formula Contents

Examination of Witnesses (Questions 978 - 979)


Mr Liam Byrne, Mr Mark Parkinson and Ms Helen Radcliffe

  Q978  Chairman: Chief Secretary, can I thank you very much for coming. I appreciate that you have not been in the post a long time, although there is a familiarity already, I think, with the Treasury, and no doubt the Barnett Formula will have crossed your desk at some point in the past. Thank you very much for coming and giving us this time. Can I just deal with one or two housekeeping matters? The evidence session will be broadcast live on the Internet. A full transcript will be taken and you will be sent a copy of the transcript and obviously you can correct it on Hansard terms, the grammar but not the content. If there are any issues which you have not been able to deal with or you want to deal with, then if you want to write to us we would be delighted to receive that. Do you want to say anything to start with?

  Mr Byrne: Just very briefly, first to say thank you for allowing me to give evidence, I think a week later than scheduled. That has allowed me to spend a week and a half in the job before coming before you. I have brought with me Mark Parkinson and Helen Radcliffe, whom I think you have met before, and with your permission, Chairman, I might invite them to chip in when the limits of my technical knowledge are reached. Just to say by way of introduction, the Treasury is obviously a great supporter of devolution. We are also supporters of the principle that there should be a single tax policy for the UK which allows us to manage tax risks centrally and conduct spending reviews centrally. Obviously, in order to bridge those two principles, rules are needed. Our position is set out in the statement of funding policy. I am a great believer that pretty much every aspect of public administration can be improved upon, so as a new Chief Secretary I am very much looking forward to the Committee's recommendations. I know that we have provided a lot of evidence so far. I hope to add a little bit to that this afternoon and obviously if there is anything more we can do to help your inquiry we will do that.

  Q979  Lord Lawson of Blaby: Thank you very much. Can I say one other thing before we start? The acoustics in this room are absolutely appalling, so if you could shout I would be grateful. Can I ask you to start off with one general point? What effect do you think the Barnett Formula has in terms of equity as between the devolved administrations across the UK as a whole? It is really a very simple point. Do you think it operates fairly—and I use the word "fairly" quite deliberately?

  Mr Byrne: Is the Barnett Formula a formula which delivers a platonic, absolutely perfect semblance of fairness? I do not think it does. Does it deliver outcomes which are fair enough? Yes, I do think it does, because it acts at the margin, because it acts to share out increments. I think it does a good job at making sure that increases in public spending are shared fairly, but obviously what it does not do is disturb the baselines on which it builds, which date back to 1979/80. So there will be anomalies which appear when you step back and look at the distribution of public spending in the round, and no doubt we will go on to discuss different dimensions to that problem, but I think it is fair enough.

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