Tagged: Barnett Formula

Northumberland is dying on its feet

A stark warning has been issued about the future of Northumberland, which has been described as a political no man’s land that is dying on its feet.

It was delivered by the Labour MP for Wansbeck, Ian Lavery, after official figures revealed it to be one of the worst-performing economic areas in the whole of Britain.

Its perilous state was shown in the ‘gross value-added’ (GVA) statistics for 2013, which detail the value of wages and profits from goods and services produced.

For Northumberland, the figure is just £13,481 per head of population, the fifth worst in Britain, and dwarfed by the highest figure of £135,888 in inner London west.

Mr Lavery said at the root of the worrying figures was the fact that traditional heavy industries like mining have never been properly replaced, while the county struggles to compete with Scotland, which gets much more Government financial help.

“We have some great small businesses here but they are not on the same scale as mining,” he said.

“We’re a political no-man’s land. I really fear for the future. People need to be encouraged to invest here and it should be made a special case. It’s dying on its feet.”

His comments were echoed by fellow Northumberland MP Blyth Valley’s Ronnie Campbell, who said the figures showed how the county had been abandoned by successive governments of all colours.

“To put it right we need to be made a special case,” he said.

“We don’t want to be a basket case. They have to come up with a new Barnett formula which benefits this region.”

There had been talk of scrapping the Barnett formula, a local authority funding mechanism which favoured Scotland, Wales and Northern Ireland when drawn up 34 years ago to provide a boost to economies there, which were then struggling.

However, in the run-up to the Scottish independence referendum, in what was seen as an attempt to ensure a ‘No’ vote victory, all three major parties vowed to continue it.

Mr Campbell said as a result of the extra cash, Scotland can offer more inducements to new companies to invest there.

It’s only 50 miles up the road. When the Barnett formula was drawn up, it was done to help Scotland, which was struggling. Now it isn’t and we are, it should be redrawn to help us.”

North East Chamber of Commerce Policy and Research Manager Mark Stephenson said:

For many years we have campaigned about the lack of fairness of the Barnett formula, which seems to be having an increasingly negative impact on the GVA figures.

“Northumberland has many excellent businesses and a thriving tourism offer, but it is one of the counties that has been adversely impacted by the public sector cuts.”

Meanwhile Mr Lavery said: “When people talk about the North East they think of what Newcastle and Sunderland are getting, they think of Nissan and the Tyne and Wear Metro.

“But Northumberland is a million miles away from this.

“The best thing about this county is the resilience of its people.

“They will deliver if given the opportunity; they just need equal opportunities.”

Across the region the GVA per head stands at £17,381, compared with £40,215 in London. Only Wales, at £16,893, and Northern Ireland, at £17,948, have lower figures.

Tyneside performs best in the North East, with a GVA per head of £20,514, although this is still some way below the UK average of £23,294.

Source –  Newcastle Evening Chronicle,  12 Dec 2014

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Man who devised the Barnett Formula dies aged 91

The man who devised the unpopular Barnett Formula – which critics claim has robbed the North-East of billions of pounds of public funding – has died.

Former Labour Cabinet minister Lord Barnett has died aged 91, his party has said.

He was the Treasury chief secretary in the 1970s who devised the system for allocating public spending to Scotland, Wales and Northern Ireland that came to be known as the Barnett formula.

In an interview in 2010, Lord Barnett revealed that he had not expected the mechanism to last for three years, let alone 30.

Speaking in a debate on a select committee report on the formula, he said:

“If we don’t do something about it soon, the only people who will benefit from this are the people who want to break up the UK, like the SNP in Scotland.

“I hope whoever is in power after the next election they will implement the recommendations of this report – it is vital for this country.”

The formula has remained in place, despite Lord Barnett’s arguments that it was a temporary fix and ought to be reformed as it now produces unfair results.

Source –  Northern Echo, 03 Nov 2014