HC Deb 13 February 1997 vol 290 cc452-4
4. Mr. Luff

To ask the Chancellor of the Exchequer what is the average public expenditure per head in (a) Scotland and (b) England in 1996–97; and if he will make a statement. [14172]

The Chief Secretary to the Treasury (Mr. William Waldegrave)

In 1994–95—the last year for which figures are available—identifiable public expenditure per head was £4,505 in Scotland and £3,614 in England. This provision for Scotland is some 20 per cent. higher than the United Kingdom average.

Mr. Luff

In the event of the creation of a Scottish Parliament, it would have full control of public expenditure in Scotland and could levy a tartan tax, while Scottish Members continued to be over-represented in this Parliament of the United Kingdom and could vote on English public expenditure and tax levels. How does my right hon. Friend think that I could justify that enormous differential to my constituents?

Mr. Waldegrave

With difficulty. The inevitable consequence of Labour's ill-thought-out plans, leaving aside the fact that they would be divisive between England and Scotland in many other ways, would be that the House would want to look at the basis of the financial deal between Scotland and England. There would be no way of stopping that, and it would not be to the benefit of Scotland.

Mr. Sheldon

Is the Chief Secretary aware that the Barnett formula, which was formulated by Lord Barnett, then Chief Secretary, when he and I were at the Treasury, was based on the population of Scotland? It was decided that it represented a fair allocation for the people of Scotland as a percentage of the total of Government expenditure throughout the United Kingdom. This is a serious matter. Is the Chief Secretary aware that, if we were to change that formula for any political considerations, it would cause serious danger to the unity of our country?

Mr. Waldegrave

I am very familiar with the formula, which is, of course, based not only on population but on an assessment and an attempted assessment of need. As I said to my hon. Friend the Member for Worcester (Mr. Luff), and it is a little odd for the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) to say it, it is the right hon. Gentleman's party, the Labour party, that is putting forward proposals that are liable to threaten the arrangements between England and Scotland. It is his party that is putting the Union in danger. One of the least of the consequences of those proposals—although an extremely important one to the people of Scotland—would be that people in England would want to look at the figures with increased attention.

Mr. Bill Walker

Does my right hon. Friend understand that Scottish Members, too, are equally concerned about what they can say to their constituents? As I understand it, the Barnett formula is designed to remove progressively and slowly the differences in expenditure levels between parts of the United Kingdom, particularly Scotland and England. The Labour party proposes to change that virtually overnight; we would be faced with what could only be described as the most unfair proposals ever brought before Parliament, because they would mean that Scots would be running the Westminster Parliament and making decisions on English spending matters, and Scots would be running the Edinburgh Parliament and making decisions on Scottish spending matters, but English Members of Parliament would not be able to influence either.

Mr. Waldegrave

My hon. Friend is absolutely right. I remember that, when I was Secretary of State for Health, my then opposite number, the current shadow Foreign Secretary, put that almost as eloquently as my hon. Friend has done; it has received no answer in the very badly thought out plans that the Labour party has since introduced. Those proposals would be disastrous for the Union, and also disastrous for Scottish taxpayers and for the standard of living in Scotland.

Mr. Mike O'Brien

Given that public expenditure on agriculture affects every taxpayer in England and Scotland, will the Chief Secretary confirm that £3.3 billion, or the equivalent of 2p on income tax, is the sum needed to deal with bovine spongiform encephalopathy? Is that a minimum or a maximum figure?

Mr. Waldegrave

As far as I remember, the figures over two or three years are about £1.5 billion this year and then there will be a considerable refund from the European Union. The figures are set out and separately identified in the Red Book.

Mr. John Townend

Does my right hon. Friend agree that public expenditure per head in Scotland, particularly on health and education, is unfair to England and unjustified? Does he accept that, if there were a Scottish Parliament, many Conservative Members like me who feel strongly about public expenditure would campaign vigorously to bring the level of expenditure per head in Scotland down to the level in England? That would benefit English taxpayers.

Mr. Waldegrave

I will not go as far as my hon. Friend, because those matters are negotiated each year in relation to Wales and Northern Ireland as well as to Scotland. What I am saying, and what my hon. Friend has represented in his question, is that, if the Labour party's ill-thought-out, half-baked plans were to come about, there would be a huge reaction from England. That would be bound to damage the situation as my hon. Friend has described—it is only one of the matters in which the Union would be damaged, but it is one of the most important.