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The Barnett Formula defined one political generation; it may yet define another

A closer look at the controversial financial and cultural legacy of the Barnett Formula, following its creator's death this week.

By Douglas Beattie

Politics really is a tough old game – you can have a career spanning half a century but in the end be remembered for but one thing.
There’s little doubt Labour peer Lord Joel Barnett – who has died yesterday aged 91 – falls into that category. Famously, as Chief Secretary to the Treasury in 1978 he devised a new method of calculating public spending to Scotland, England and Wales. Complex and controversial to this day it allows for higher allocation of resources in different constituent parts of the UK. 
The whole idea was actually intended as a short term measure, but here’s a context here, one which brings us right up to the present. It can be summed up in just one word – Scotland. Barnett’s mechanism emerged as a means of soothing minor rows in the Callaghan cabinet in the run up to the Scottish Assembly referendum of 1979 which was lost on the back of a technicality known as the 40 per cent rule.
Neither Labour nor the Thatcher governments which shortly followed dared ditch the funding arrangement. During the 1980s the formula remained an exotic beast surfacing every now and again in the media and always spoken of in most decorous tones by newscasters. Every Secretary of State for Scotland since the late Seventies has been obliged to defend it from Westminster tinkering.
And so both Malcolm Rifkind and – the frankly detested – Michael Forsyth ended up proclaiming to Margaret Thatcher herself that the arrangement would be junked over their dead bodies. They were wise to do so, for in a period of large scale de-industrialisation north of the Tweed, money mattered as never before. 
My old politics professor at Glasgow University – James Kellas – would often give a wheezy laugh when some point or other was made in debate about Scotland’s future, before shouting: “aye, but what about the Barnett Formula?!” This was a man who had written a book called The Scottish Political System long before there was such a thing to properly speak of. The Barnett Formula ran right through that work – from chapters on parliament to devolution and then local government and nationalism.  
Barnett therefore was part of every single political conversation in the Scotland of the 1980s and Nineties, and, almost without precedent, a near ubiquitous figure while residing in the House of Lords. Yet the Scotland of today – healing in the aftermath of the independence referendum –  is still that of his formula. The defining moment of those frantic, final days of that campaign in September was ‘The Vow’ – jointly offered up to the electorate by the Tories, Lib Dems and Labour. 
Headlines focussed on extensive new devolved powers in the event of a No vote, but importantly there was also a key pledge that that the Barnett Formula was going precisely nowhere. Interestingly, Barnett had once predicted that the only people likely to now benefit from his mechanism were “the people who want to break up the UK.” Indeed events in Scotland had of late led him to say he felt the whole thing was undemocratic and “grossly unfair.”
He also used to laugh about what he called the “immortality” of having “his own formula”. It was a joke at his own expense but clearly not one without substance, for the Barnett Formula has as much relevance to Britain’s future as it does its past.
Douglas Beattie is a journalist, author of The Rivals Game, Happy Birthday Dear Celtic, and The Pocket Book of Celtic and a Labour Councillor based in London. He grew up in Scotland
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