Barnett Formula ‘would remain’ after No vote

David Cameron says the Barnett Formula would remain following a No vote. Picture: TSPL

In a letter to SNP First Minister Alex Salmond, Mr Cameron warned that the only danger to the controversial Barnett Formula, which gives Scotland £1,400 extra per person than the rest of the UK, is by Scots voting yes in the referendum.

It follows claims made by SNP ministers that Westminster plans to scrap the Barnett Formula after a cross party parliamentary group of peers and MPs called for it to be reformed in the event of a No vote.

However, SNP Deputy First Minister Nicola Sturgeon pointed out that Mr Cameron would only give a guarantee over the formula until the next general election in 2015 because he noted in his letter that he “can’t bind future governments.”

The SNP also claimed that the UK Government is sending out mixed messages with Mr Cameron promising the Welsh Tory conference in 2010 that “we do think the Barnett formula is coming to the end of its life.”

Critics of the government formula for distributing money geographically around the UK, set up by Labour former minister Joel Barnett in the 1970s, claim that Scotland currently receives about £4 billion too much if it was replaced by a needs-based system.

In the past the formula has been criticised by the current Lib Dem Scottish Secretary Alistair Carmichael before he entered government who said it should be scrapped during an interview on STV during the 2010 election campaign.

Scottish Tory leader Ruth Davidson has also predicted that the Barnett Formula would be reviewed after 2014.

But in his letter to the First Minister, Mr Cameron made it clear there are no plans to change the funding formula.

He said: “Your request for guarantees in perpetuity about the future is quite astonishing; I can no more bind future UK Governments than you can bind future Scottish Governments.

“What I can say is that reform of the Barnett formula is not on the horizon. Indeed the only immediate threat to Scotland’s funding is a vote for independence.”

Mike Russell book

Sources close to the Prime Minister pointed out that SNP Education Secretary Mike Russell has also led calls for scrapping the formula.

In his 2006 book Grasping the Thistle he wrote: “Far from starving Scotland as is often asserted, [Barnett] is actually fattening us to the point of dangerous obesity. Bizarre as the thought may be, could the UK be actually killing us by kindness?”

But Ms Sturgeon said that the Prime Minister has “let the cat out of the bag” on Scotland’s funding after a No vote.

She said: “He has admitted he is unable to give any guarantees on what will happen to Scotland’s budget in the event of a No vote – despite demanding absolute guarantees on every aspect of a future independent Scotland.

“His comments on what is ‘on the horizon’ for the Barnett formula give the game away completely because it is what is just over the horizon that people should be concerned about, and the PM himself is on record as saying Barnett is ‘coming to the end of its life’. The Westminster parties are determined to slash Scotland’s cash in the event of a No vote, by up to £4 billion a year, and only a Yes vote will prevent that.”

She added: “Once again David Cameron is entering the discussion on Scotland’s future without having the courage to debate the issues openly – if he is so sure of his arguments he should now agree to a head to head debate with the First Minister.”

However, the issue also came up in Scottish Question in the Commons when Mr Carmichael was challenged on the issue by SNP Perth MP Pete Wishart.

Mr Carmichael said: “The Barnett formula is one reason why the people of Scotland reject independence. That is why he is operating his own little ‘Project Smear’ to pretend that it is somehow at risk. The position has been put beyond any doubt today by the Prime Minister in a letter to the First Minister.”

Labour Scottish Affairs chairman Ian Davidson that the SNP was “launching separatists for Barnett”.

Afterwards Mr Wishart said: “Mr Carmichael’s answer three weeks ago on the same topic was – it would not be looked at until ‘the economy has stabilised again’ – today he is saying - ‘not in this parliament’.

“It is just weasel words from the new Scottish Secretary. He needs to be straight with the Scottish people about the Tory/ Liberal Democrat threat to Barnett funding, whenever they plan it.”