Owen Smith: No to Barnett Formula
THE MP challenging Jeremy Corbyn for the Labour leadership has been criticised for his stance on the Barnett Formula after it emerged he said the funding deal had now “seen its day”.
Owen Smith also said during a debate at Westminster he supported a “fairer” funding package in the UK.
SNP MSP James Dornan said the former shadow work and pensions secretary’s comments were “deeply disturbing”.
Corbyn is facing a leadership challenge after dozens of his parliamentary colleagues said they had no confidence in his ability to win a General Election
Smith, MP for the Welsh constituency of Pontypridd since 2010, has positioned himself as a soft-left candidate and is perceived to be the underdog in the race.
However, both candidates are facing questions about the Barnett Formula, which has allowed Scotland to build up a sizeable per-head spending advantage over English regions.
Dave Anderson, a key Corbyn ally and Shadow Scotland Secretary, was also revealed to have made critical remarks about the funding scheme in the past.
Smith, who is expected to receive the support of a majority of Labour MSPs, can also be revealed as a Barnett sceptic.
In a debate in 2011, Smith said that any move towards a needsbased funding system – Barnett is focused on population size – would be “very difficult”.
However, he said: “I, too, would be ‘happier’ if we went to a needs-based formula; I will concede that much.
He added: “I simply add that at last we agree across this House that a fairer funding formula ought to be pursued and Barnett has seen its day.
“I therefore commend the Government for considering how we might do something important about it in the future.”
And in January 2014, when asked about the Barnett Formula on television programme Sharp End, Smith said: “We should be pledging to look at funding across the UK.”
He also said: “We do need to review our funding mechanisms.”
However, weeks later, he wrote a piece praising the impact of the formula on Wales: “Though Barnett may be flawed, it still provides us with £112 for every £100 of English public spending.”
Although the Scottish Parliament is to gain substantial extra tax powers from April next year, a large chunk of Holyrood’s budget will still be determined by the formula. Scrapping Barnett with a needsbased system could potentially result in cuts to the Parliament’s budget. Dornan said: “It is deeply disturbing that senior Westminster figures continue to raise the spectre of getting rid of the Barnett Formula – contrary to promises made to Scotland during the referendum. “This isn’t just a few right-wing Tory backbenchers – but now prominent figures on Labour and Tory front benches, including Labour’s Shadow Scottish Secretary and one of their leadership candidates. “And given that we know Kezia Dugdale will likely be backing Owen Smith for the Labour leadership, she now needs to come clean and admit whether she agrees with his plans to cut Scotland’s budget.” Smith’s press team could not be reached for comment.