HC Deb 09 May 2001 vol 368 cc103-4
4. Mr. David Trimble (Upper Bann)

What recent discussions he has had with the Chancellor of the Exchequer with regard to the Barnett formula. [159618]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. George Howarth)

I regularly discuss a range of issues with ministerial colleagues. This issue was among a number raised with me recently by the right hon. Gentleman's colleague, the Minister for Finance and Personnel, Mark Durkan. The Government have no plans to change the Barnett formula.

Mr. Trimble

With regard to—(Interruption.]

Mr. Speaker

Order. May I ask the House to come to order? The commotion is unfair to the right hon. Gentleman.

Mr. Trimble

When the Minister next speaks to his ministerial colleague, who is noted more for the noise that he makes than the sense, will he point out that the Barnett formula is a purely mathematical formula that gives the regions the per capita increases that occur elsewhere? In England and Wales, average real-terms expenditure is expected to rise over the next three years by 6 per cent. in round figures. The equivalent figure in Scotland is 5 per cent.; in Wales it is 4 per cent. and in Northern Ireland 3 per cent. Will he point out that the formula does not operate very fairly?

Mr. Howarth

As the right hon. Gentleman has just made clear, per capita spending in addition to baseline spending is apportioned by applying the Barnett formula. For Northern Ireland, that delivers a lower percentage increase on the existing baseline because Northern Ireland starts from a higher per capita basis than any other region in the United Kingdom.

The Barnett formula and its operation are matters for my right hon. Friend the Chancellor of the Exchequer, whose officials are in regular contact with their counterparts in the devolved Administrations. At present, there are no plans to change Barnett, as I have already said, beyond updating it from time to time to take account of changes in the relative population in each part of the United Kingdom.

Mr. John McFall (Dumbarton)

Does the Minister agree that the Barnett formula has indeed been good for Northern Ireland? Economic growth there is at 4 per cent., unemployment is at unprecedentedly low levels of below 6 per cent., and investment has risen by 75 per cent. over the past five years. Would not any tinkering with the Barnett formula need to be looked at very carefully? It is a sensitive issue. The formula has delivered in economic terms for Northern Ireland. and has served the peace process well.

Mr. Howarth

In response to my hon. Friend's second question, I should say that there are no plans at all of the sort that he mentioned. I agree entirely that the peace process is delivering in terms of equality and in terms of a proper basis for human rights in Northern Ireland. It is also delivering the highest levels of economic growth anywhere in the UK. The peace process is a success.