On the 1st day of Christmas....a Barnett formula debate

Never mind the nightly drinks parties that fill Westminster diaries at this time of year to satisfy the thirstiest hack. What could be more exciting than spending an evening discussing the Barnett formula?

The House of Lords did just that last night. The debate was prompted by a recent call from the Local Government Association for the formula, which links changes in the Welsh government spending to comparable changes in English budgets, to be replaced.

The speakers included Lord [Barry] Jones, whose ministerial career coincided with the invention of the formula, named after a Treasury minister of the time, Joel [now Lord] Barnett. Lord Jones explained: "the background to the Barnett formula was the consequence of three beleaguered administrations of which I was a member."

According to Lord Jones, Lord Barnett, still going strong at 90, coped with the economic stresses of the 1970s by sharing a half-bottle of House of Commons champagne with a colleague before returning to his Treasury desk.

Lord Jones had a warning for today's ministers tempted to tinker with the Barnett formula: "My one observation is to be careful for what you wish if you are a Welshman in governance, particularly in Wales. Whatever the outcome of the Scottish constitutional debate, Barnett will come to the fore in all our deliberations and arguably shall be in the manifestos of the great political parties. That is for certain.

"My caution is this. Roughly speaking, per head of the population in England the sum of money per citizen is exceeded in Scotland by £1,400; and in my own country, Wales, by some £800. I have spent only 43 years here in Westminster, and I am concerned that when Whitehall mandarins have their monthly meetings they may be tempted to consider how they may be able to get rid of the responsibility as it affects the Celtic fringes. I therefore feel that before one advances one should know precisely what the outcome is."

Former Plaid Cymru leader Lord Wigley complained that only the LGA purported to represent councils in England and Wales, it pitched its arguments solely in the context of England, whose communities, it said, were being short-changed by as much as £4.1 billion a year.

Lord Wigley said he supported the thrust of the LGA's approach and hope that "all UK parties will make a pledge in their manifestos for the 2015 election to introduce a needs-based formula for distribution of resources."

For the government, Lord Newby [a Liberal Democrat] offered little hope of change: "While we we recognise the concerns expressed about the formula, as made clear in our programme for government, this government's priorities remain that we deal with the deficit, bring debt down, and build on the growth we are beginning to see demonstrated right across the UK. There are therefore no plans to review the formula in this parliament."

That was a point underlined by the prime minister in a letter to Scottish First Minister Alex Salmond. David Cameron told him bluntly: "reform of the Barnett formula is not on the horizon." That may have been designed to re-assure Scottish voters that the formula's alleged generosity to them would survive a "no" vote in the independence referendum but it looks as if Lord Wigley (and some English Conservatives) will be disappointed when they read the next Conservative manifesto.