THE level of spending in Scotland is a small price to pay to prevent the break-up of the Union, Tony Blair told critics of the Barnett formula yesterday.
In his last appearance as Prime Minister before the chairmen of the Commons' committees, he insisted the retention of the formula, drawn up in the 1970s by a former chief secretary to the Treasury, was crucial to keep Britain united.
Mr Blair also played down Labour's defeat at Holyrood and suggested he had left the Union stronger than it was before 1997, as support for "separation" had fallen. It was understandable if voters wanted different governments from time to time, he said.
He faced a grilling over whether it was sustainable to have "two classes of citizens" where Scots MPs could decide on the affairs of England through the Westminster parliament, but English MPs could not vote on devolved matters at Holyrood.
Put to him that Lord Barnett had denounced the very formula he had invented in the 1970s as a former chief secretary to the Treasury, Mr Blair said he disagreed with him.
"If you want to keep the union together, the Barnett Formula is a small price to pay," he said.
Challenged by Sir George Young, the Conservative chairman of the standards and privileges committee, about whether devolution had killed off nationalism given that there was an SNP administration in Holyrood, the Prime Minister retorted: "Get your own party sorted out up there and offer us some competition rather than the SNP."
In a wide-ranging, two hour session, Mr Blair spelled out his stance ahead of a crucial European summit on Thursday.
In a message to his fellow EU leaders, he said there were four elements he would not accept in any new treaty.
"First, we will not accept a treaty that allows the charter of fundamental rights to change UK law in any way," he said. "Second, we will not agree to something that displaces the role of British foreign policy and our foreign minister. Thirdly, we will not agree to give up our ability to control our common law and judicial and police system. And fourthly, we will not agree to anything that moves to qualified majority voting something that can have a big say in our own tax and benefits system."
Mr Blair along with his successor Gordon Brown will hold a conference call today with Nicholas Sarkozy, the French president, to discuss the more controversial aspects of the treaty.
Pressure will grow on Gordon Brown, the next Prime Minister, to go to the country with a referendum on anything that could be classified as a European constitution, rather than simply an amending treaty.
CHEQUES AND BALANCES
THE Barnett formula is the mechanism which the Treasury uses to adjust public expenditure in Scotland, Wales and Northern Ireland.
It has no legal standing so can be changed by the Treasury at will. The formula ensures that change in public expenditure is applied proportionately across different parts of the UK.