Labour in ‘chaos’ over pledge to scrap Barnett Formula

First Minister of Wales Carwyn Jones has called for the Barnett Formula - which allocates central funds to the devolved assemblies - to be scrapped. Picture: Jane Barlow/TSPL
First Minister of Wales Carwyn Jones has called for the Barnett Formula - which allocates central funds to the devolved assemblies - to be scrapped. Picture: Jane Barlow/TSPL
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Labour’s policy on the Barnett formula has descended into “total chaos”, critics have claimed, after sources in the Scottish and UK parties distanced themselves from a Welsh plan to scrap the funding system for Scotland and other devolved administrations.

Kezia Dugdale has insisted Labour is standing by the Barnett Formula aftre the Welsh First Minister Carwyn Jones threw the party’s position into disarray.

The Barnett Formula allocates spending to Holyrood, the Welsh Assembly and Northern Ireland. It has resulted in Scotland enjoying higher public spending per head than the rest of the UK, including Wales, and political leaders in Cardiff have long demanded a rethink.

Setting out Welsh Labour’s election manifesto on Tuesday, Mr Jones insisted that Barnett must go. He said: “Nobody can defend a situation where we have a funding formula that is over 38 years old by now, that was based on the way things were in the 1970s.”

Ms Dugdale, the Scottish Labour leader said: “The UK Labour Party manifesto is very clear – it supports the Barnett formula. It includes an additional £3billion coming to Scotland from UK-wide spending decisions.

“I spoke to Carwyn Jones this morning, and we’re both focused on fighting for a fair deal for Scotland and Wales.

“You only get that with Labour – the Tories want to strip back investment and the SNP wants to break-up the UK, which would mean the end of the Barnett Formula.”

Mr Jones is the second senior Labour figure to campaign on a platform of scrapping the formula, after the Labour candidate for West Midlands mayor, Sion Simon, called for English regions to “take back control” of their funding from devolved nations.

Mr Simon was narrowly defeated by the Conservatives. Asked about his proposal ahead of the budget in March, shadow chancellor John McDonnell told journalists: “No, we’re not going to re-open the Barnett Formula.”

A UK party spokesman insisted the formula would not be scrapped.

“Our manifesto costings are based on the Barnett Formula and we will not scrap it,” they said. “Over the course of the next parliament, we will consult on long-term reform of how the UK allocates public expenditure to ensure that it reflects the needs of the nations and regions of the UK.”

Scottish Tory finance spokesman Murdo Fraser branded the situation “total chaos”.

“Kezia Dugdale has actually said that scrapping it would lead to £4 billion in cuts for Scotland,” he said.

“The Conservatives have explicitly promised to keep the Barnett formula. Jeremy Corbyn needs to come clean – and quick.

“This is total chaos. The Scottish Labour manifesto is based on the Barnett formula operating – under their plans, spending on policies from arts education to council funding in England is supposed to lead to an increase in the Scottish budget.

“Jeremy Corbyn needs to come clean – and quick. Will Labour keep the Barnett formula? If they will, why is Labour in Wales saying they won’t?

“And if they won’t, why is it used in their manifesto and how much will Scotland lose if they cut it?”

SNP Deputy Leader Angus Robertson said it was “an astounding admission from one of Labour’s most senior figures”.

He said: “Even Scottish Labour have acknowledged that the Barnett formula is worth £4bn to Scotland – and three days out from a general election, Jeremy Corbyn must make clear how much a Labour government would cut Scotland’s budget by.”

A Labour source said: “This is astonishing hypocrisy from Angus Robertson, whose campaign is in utter chaos.

“His plan for independence would rip up the Barnett Formula and inflict a further £15billion of austerity on Scotland. Only Labour can defeat the SNP in seats across Scotland and send a message to Nicola Sturgeon and Angus to drop their plans for a divisive second independence referendum.”