UK Politics

Lord Barnett, creator of formula for UK spending allocations, dies

Lord Barnett

The former Labour cabinet minister Lord Barnett has died at the age of 91.

Baron Barnett, born Joel Barnett, is most famous for devising the formula that sets public spending in Scotland, Wales and Northern Ireland.

The Barnett formula was put in place when Lord Barnett was chief secretary to the Treasury in the late 1970s - it was intended to be a temporary fix.

But is has continued to be used - in recent years Lord Barnett said the system was "unfair" and needed reform.

His daughter Erica said he died peacefully at home on Saturday morning, after a short illness.

A written question in the House of Lords on Monday on the subject of the Barnett formula prompted Lords to pay tribute to Lord Barnett, who was described as a "formidable parliamentarian" and "a delight to have as a sparring partner".

Elected as Member of Parliament for Heywood and Royton in 1964, Barnett served in the House of Commons until 1983.

In the Labour governments of 1974-79 he was chief secretary to the Treasury, before moving to serve on, and later chair, the Public Accounts Committee during the 1979-83 parliamentary term.

In 1983, his seat was abolished due to boundary changes, and he was elevated to the House of Lords as Baron Barnett in 1984.

During his tenure in the Lords he served on the European Union Committee, the Economic Affairs Committee, and the Monetary Policy Committee of the Bank of England.

'Grossly unfair'

The Barnett formula has become central in political debate in the past few months because of the promise by the three largest Westminster parties that it would continue to set public spending levels in Scotland in the event of a 'No' vote in the independence referendum.

Under the formula, extra funding - or cuts - from Westminster is allocated according to the population size of each nation and which powers are devolved to them.

When the UK government increases or decreases funding for departments such as health and education in England, the Barnett formula is used to decide how much devolved governments will receive.

It is controversial because it often leads to public spending per head being considerably different in different parts of the UK. It has typically been higher in Scotland than in England, for example.

In September, Lord Barnett wrote in the Daily Mail that he "never thought the arrangement would last any longer than a year or two", and described the public spending per head differences as "grossly unfair".

Speaking in a debate in the House of Lords in 2010, he predicted that "if we don't do something about it soon the only people who will benefit from this are the people who want to break up the UK, like the SNP in Scotland".

He said the formula's longevity was "a tribute to the fact that governments of all persuasions don't like to make the major changes that are needed".

His daughter Erica said the discussion of the formula in the Scotland debate was "a great boost" to him, as it allowed him "to say what he had been saying for a long time to anybody who would listen", that he thought the formula was "unfair and undemocratic".

His death was announced by the Labour Party.

Labour leader in the Lords Baroness Royall said: "Joel was an extraordinary individual.

"As an MP, minister and colleague in the House of Lords, to the very end he was diligently holding the Government to account and doing his best to ensure the best for the people of this country."

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