Prime Minister attacked for spending gaffe

Mar 20 2008 Liverpool Daily Post

GORDON Brown was under fire last night after getting his facts wildly wrong as he defended funding rules that deliver much higher spending in Scotland than in poorer Merseyside.

The Prime Minister astonished MPs by claiming the infamous Barnett Formula – the source of growing anger south of the Scottish border – is “based on a needs assessment”.

In fact, the formula allocates increases in public spending according to population size, regardless of the relative wealth of people in Scotland, Wales and the English regions.

In the last financial year, Scotland received £8,623 per head from the Treasury, while the North West figure was £7,798 – more than £800 lower.

Yet income per head north of the border was 95% of the national average in 2006, while the average North West resident received just 87%.

Meanwhile, the Scottish Parliament – thanks to higher funding from London – has announced a series of popular spending measures, not available in England.

Last year, the SNP’s first Budget included eye-catching plans for free prescriptions, free eye and dental checks, a cut in class sizes in primary schools and a cut in business taxes.

In the Commons yesterday, Mr Brown told MPs: “The allocation of funds in the UK is based on a needs assess-ment that started more than 30 years ago, has been agreed by all parties subsequently and has been followed by every government since.

“It is based on the idea we should allocate resources in the UK on the basis of need. That is the basis on which the Barnett Formula exists.”

It is the first time a government minister – let alone a prime minister – has attempted to defend the Barnett Formula on grounds it is based on need.

The gaffe will further fuel resentment that a Scots-dominated government is refusing to even review the rules, introduced for one year only in the late 1970s.

Late last year, the Daily Post revealed No 10 aides were arm-twisting Labour MPs and peers pushing for a rethink – warning of “consequences” if they continued to do so.

Just days before leaving No 10 last summer, Tony Blair virtually admitted that higher spending was a bribe to keep the Scots within the United Kingdom.

Last night Graham Stringer, the Manchester MP who quizzed Mr Brown, warning the Barnett Formula was a “threat to the Union”, said: “It was a bizarre answer and 100% wrong.”

And John Pugh, the Southport MP and Lib Dem treasury spokesman, said: “The Prime Minister has a very poor grasp of what is a real sense of grievance across the North of England. He is simply wrong.”

Chancellor Alistair Darling will publish a “factual paper” on the formula in the summer – but has insisted that does not mean a review.