Former Treasury chief minister Danny Alexander defends Barnett formula

FORMER chief secretary to the treasury Sir Danny Alexander has defended the system for distributing cash within the UK in his first public appearance at Westminster since losing his seat in May’s election.

Danny Alexander. Picture: John Devlin

Sir Danny was among the Liberal Democrats casualties on 7 May when he was defeated by the SNP in the Inverness, Nairn, Badenoch and Strathspey constituency.

The senior Lib Dem said the Barnett formula, the funding mechanism that determines how much cash Scotland receives from the treasury and results in spending north of the Border standing a higher rate per head than the UK average, was “simple and transparent”.

Sir Danny made the remarks at a meeting of the House of Lords economic affairs committee, where he was speaking on the devolution of public finances as part of the UK Government’s Scotland bill on greater powers for Holyrood.

He said: “The treasury has responsibility for the stability of the UK and the way the Barnett Formula operates is simple and transparent.”

“I’d defend the retention of the Barnett Formula. The principle is a sensible one.”

Sir Danny, who was knighted for political and public service that included five years as a cabinet minister in the coalition government, also said at the meeting at Westminster that the Barnett Formula was “not particularly complicated”.

He said that key powers over tax and welfare that are being devolved to Holyrood would “enhance the accountability of the Scottish Parliament”.