Tories to junk Barnett?

Well, it’s not clear what else they had in mind. But Owen Paterson’s comments this afternoon are intriguing and would put the next Tory government in a useful position to negotiate a more realistic settlement when (rather than if) the new Tory government comes in:

…we have never said that a Conservative Government would make severe cuts to Northern Ireland’s block grant. We have said the Barnett Formula can’t last forever. Any replacement would be a needs-based formula and as Northern Ireland has substantial needs it would therefore get substantial resources. These comments prove that debate about the Barnett Formula is happening in a fact-free vacuum and we have repeatedly called on the Government to show some leadership on this issue and look at an updated needs-based assessment of how spending should be allocated across the UK.

  • Frustrated Democrat

    It is likely the Conservatives will fund NI on the basis of need not an outdated formula. That is not to say they will reduce the funding.

    The basis of funding will probably be on how to rebuild NI to reduce the current subvention and that may cost more in the medium term to save more in the longer term.

    Look for them to introduce bold moves on the economy to attempt to revitalise industry in NI and reduce the dependence on Government.

  • Comrade Stalin

    The level of public spending in NI has pretty much doubled since 1997. I don’t understand how the Tories can say that this would not get cut.

    How can they advocate a plan that will see more tax revenues directed away from their middle and upper class vote in the south of England to a regional government which vastly overspends public funds and whose residents pay less council tax and no water charges ? Are they really going to sacrifice key swing seats in a mad and ill-judged gamble to win over the NI electorate ?

  • Frustrated Democrat

    CS

    It depends how the spend is allocated it may not be direct to the Assembly it might for example be in changes to corporate taxation or other rules specific to NI. Remember the Assembly isn’t responsible for all aspects of Government.

    It could be sold as a means of cutting the £8 billion annual subvention in the medium term. That just isn’t sustainable without a plan to change it which the Assembly just doesn’t have, they just go cap in hand to Westminster asking for more.

    I would imagine if the Conservatives are in power next year they will want a plan and very quickly, or they will do what is necessary to make it happen.

  • ????

    in changes to corporate taxation,…………….

    the tories have already ruled that out…

  • wild turkey

    ‘Remember the Assembly isn’t responsible for all aspects of Government.’

    FD. The primary function of government is to decide how to raise revenue and how to spend it. In that fundamental sense, the assembly and associated ‘Executive’ ain’t a government.

    Yes in Northern Ireland there are areas, and demographic groups who experience poverty on sadly gruesome scale. To date, it would seem policy under NewLies or the the ‘Executive’ has accomplished little in ameliorating the indidence of this poverty. however, methinks the poverty that impacts many individuals in northern ireland effects those who have to drive a people carrier that is more than five years old, whose children cannot get into the grammar school of their first choice, those who can no longer afford their elocution or tennis lessons and are taking a fortnight rather than month long holiday in Eurp.

    The extent to which changed economic, and therefore public sector budget priorities, do not address the cruel dilemna faced by this rare and wonderous breed is indeed a recipe for human tragedy.

  • Paul

    the tories sacrificing nIreland to middle England in the 21st Century and beyond!

    LOL are you sure its not in cahoots with Sinn Fein

  • The Barnett formula will be history, no matter who is mouthing the 2010 Autumn Statement, if only because even Joel Barnett himself reckons it is no longer defensible.

    A “needs-based formula” is merely a circumlocution for means-testing. That is what the likes of John “Vulcan” Redwood, as lead-spokesman for the Tory Right, want, and will get — for individuals and devolved administrations alike.

    As for the assumption, see ???? @ 10.35 PM, that corporate taxation cannot be ratcheted up, consider that there are more ways than one of skinning a cat. Can one not appreciate the effect of all those “productivity-measures” that “persuade” and “encourage’ us to use plant, property and personnel more “efficiently”, all in the interests of a “Greener” economy? And then, of course, there are those insidious little local taxes. There’s a guy from North London on the Mail website complaining that his small shop is rated at £10,000+ p.a. (plus water and utilites and waste disposal and …). Way to go!

  • Comrade Stalin

    FD,

    It sounds like you’re spinning there. Paterson is very clear that he’s talking about changing the formula which allocates government spending to the regions in a way that will increase the level of spending in NI. It’s weird to hear a Tory talk about the need to increase spending on nothing in particular (why do we need special treatment, more so than other parts of the UK?), and it’s even weirder to hear him talk about doing it in an area that is of no strategic significant to the party, so it’s easy to imagine that this is a load of unfounded nonsense coming from someone trying to raise the Tory profile in NI.

    Malcolm,

    Barnett said ten years ago that it was no longe defensible and that it was insane that it had even lasted that long. Ten years on, it’s still there, and indeed Tony Blair fought stiffly against changing it.

  • Frustrated Democrat

    CS

    I think you missed the point the £8 billion will not be sustainable in future and Barnett is an out of date formula. Whatever deal the DUP think the have with Labour is irrelvant if they are in opposition

    There are two choices; either have a massive reduction in living standards here or increase the overall percentage of private v. public employment.

    The ONLY reason that an increase (or even no decrease in the current climate) will be acceptable is to change the way NI is run to ensure the changes take place. That will need a completely new thought process that only the Conservatives centrally can bring as they would control the purse strings.

    I think that is what is being looked at in the statement, and is why it is in the best interests of voters who support the UK to consider voting for the CU’s to ensure they have as large a voice in the Conservative party as possible when funding is discussed.

    Is it possible that you misjudge the level of commitment in the Conservative party to NI? They seems to have invested a lot of time and effort, not to say funds, here in the past year for a Party who probably do not need NI to succeed.

  • Comrade Stalin @ 11:37 PM:

    That was when a substantial proportion of English local authorities were Labour-controlled. Things have changed: notice how those authorities (e.g. the outer London Boroughs) now back in the Tory and Tory/LibDim camp are screaming foul. Barnett gave the Treasury powers of manipulation: that was seen as its continuing merit. Transparency in government is the coming thing, however hard the two major parties resist.

    Then, by the subsequent rounds of local election, assuming the accession of Cameron to the pottie of state, local authorities will inevitably slip away from the Tories.

    In any case, the LibDims (and ScotNats et al.) are correct in one respect: the imbalance between central grants and locally-raised taxation is wrong, wrong, wrong. If we want devolved powers, money-raising must be among them: else it’s a client relationship.

    Frustrated Democrat @ 12:50 AM:

    Two things wrong there.

    First, Tories have shown no more commitment to NI, than they wept tears over what they did to Barnsley, Blaenau or Blantyre. Have we learned nothing from the history?

    Second, (“the best interests of voters…”) you seem to make a strong argument for a one-party state: worrying that in a “democrat”.

  • Frustrated Democrat

    MR

    One party state? – Alliance SF and the SDLP – one party that is 100% pro the UK maybe.

    Don’t live in the past and trade on you prejudices believe there is a better tomorrow for NI and it isn’t going to be with the Labour party.

  • Dewi

    “the imbalance between central grants and locally-raised taxation is wrong, wrong, wrong. If we want devolved powers, money-raising must be among them: else it’s a client relationship.”

    From Malcolm – absolutely correct – it’s not only a client relationship it develops a class of politicians with a lack of the necessary economic focus.

  • Frustrated Democrat

    If CU’s are elected to Westminister there is a direct relationship between votes and tax outcomes the same as in the rest of the UK.

    A vote for anyone else and there is no realtionship.

  • ????

    If CU’s are elected to Westminister there is a direct relationship between votes and tax outcomes the same as in the rest of the UK….

    so are the UCUNFS going to lower taxes or increase public spending here?

  • Frustrated Democrat

    ?????

    My guess is the CU’s, in the short term, will do both to fix the mess this place is in and attempt to move from a public to private economy and thereby cut subvention.

    We may however become guinea pigs in a revolutionary experiment to re engineer our economy.

  • I just lurve it when these anonymous nobodies pontificate with major statements of party policy.

    Let’s take a real example: water charges.

    Here’s Jeff Rooker in a Lords Debate in mid-2006:

    The Water Service is currently funded out of general taxation. It would take almost the entire Northern Ireland rate to fund the water and sewerage services, so one can see how much extra money is required. Therefore, we have a dilemma; Northern Ireland has the highest rate of public spending per head and the lowest levels of revenue in the UK. Something has to give. The short answer is that Northern Ireland households are not contributing enough to sustain investment in public services. I know that averages can be very misleading, but I have global figures for England, Wales, Scotland and Northern Ireland. They show that in Northern Ireland the average level of household taxation—that is, property charge per household as well as water rates—is £668. For England and Wales, it is £1,337 and Scotland it is just over £1,200. There is a substantial difference there. There is not a figure for water; the water is not being paid for to the amount that it should be even out of local charges.

    Read it carefully, and then note the views of Lord Glentoran, and official Conservative spokesman, in the same debate:

    I thank the Minister once again for clearly introducing this order. I support it in principle … I hope that whoever is put up as the rate charging agency—RCA—performs considerably better than the agency that currently collects rates.

    Speaking as a farmer, I hope that the enforcement of this order and future orders on water and sewerage will be more readily, more quickly and more thoroughly enforced … In principle, I support the order. I just raise the issues of better enforcement, stronger enforcement of the environmental regulations associated with water and sewerage, and better attention to leakages … I imagine that communities, if not every house, will be fitted with water meters in due course. I wonder what the costs of that will be and where it will lie. Having said that, I support the order.

    Happy with that, everyone?

    Oh, we can repeat that quick exercise with other areas of Tory policy that might, just might, cause a fit of choking. Be careful what you wish for: you might get it.

  • ????

    My guess is the CU’s, in the short term, will do both to fix the mess this place is in and attempt to move from a public to private economy and thereby cut subvention……….

    so are you saying that NI is going to be treated differently from the rest of the UK where tax increases and budget cuts will be the order of the day.

    Where and when did the conservatives state they were going to cut taxes and increase public spending?

  • Frustrated Democrat

    ????

    I am suggesting that, for a period of time, it is possible that the CU’s could take steps to make the fiscal rules and environment more conducive to reforming the economy.

    Radical policies are the only way that change can be made happen.

    MR

    How can you know that someone who is anonomous is a nobody, do you have the gift of second sight?

    Incidentally paying for water is not a tax it is a charge for the provison of a service supplied just like electricity or gas. That it is not a tax is obvious as it in the remit of the Assembly to decide and they have no tax raising powers.

  • Frustrated Democrat @ 04:32 AM:

    “anonymous” or “anomalous”?

    Anyway, it’s my Klassikal eddicashun: ”an” = a prefix for “not”, and “onuma” = “name”. So, unless we want to ponder the Thomian argument on names (Question 13, article 6, as I seem to recall), “no name” = “a nobody”. Unless you are prepared to reveal that you are oh-so-important?

    As for paying for water is not a tax, you have it wrong way round. Not paying for water and sewage (as happens exclusively in NI), is a subsidy. Further, Northern Ireland Water Ltd/Norlin Airlan Watter/Uisce Thuaisceart Éireann is, uniquely in the UK, not privatised. When charges for utilities are managed within a nationalized industry (as used to happen across the UK when the domestic electric consumer subsidized the commercial sector), that would be one of those famous “stealth taxes”, surely. The situation in NI is that charges apply to the non-domestic consumer, but not to the household one: unmeasured consumers pay £26.87 standing charge for water, plus £10.33 for each £1000 of assessed Net Annual Value for water, and £31.39 plus £11.814/£1000 for sewage (both capped for this year only at £405 each). So are you giving us a new piece of Tory rhetoric: the “stealth subsidy”?

    Your last sentence is a specious quibble.

    Or perhaps your “Big Idea” is “vote Tory/Unionist and flush your bog at someone else’s expense”.

  • Comrade Stalin

    FD,

    Well, the assembly does have tax raising powers (the regional rate), nothing to stop the assembly doubling or tripling that if it wished to do so. But that’s a technicality.

    Malcolm:

    When charges for utilities are managed within a nationalized industry [..] that would be one of those famous “stealth taxes”, surely.

    Where do you draw the line there, Malcolm ? Is it a stealth tax when you pay for a driving test or a new driving license ? Or a postage stamp ? Or back in the day when you paid your telephone, gas or electricity bill ? Or catch a bus ?

    I see nothing obviously wrong with water charges. Water is an expensive resource which costs money to produce and pipe around the place. People should pay a price which reflects that cost. It only makes the most sense, of course, if they’re metered, which would allow them to control the amount that they pay. Those who cannot pay should be assisted through the social security system. I do not see the intrinsic problem with this. The left have decided that this is a point of principle but I think they are missing the point.

    It is a problem if the government does not reduce taxation by the appropriate to reflect the fact that the NI water is fully funded through charges rather than out of the general fund. That is a not-so-stealthy tax, ie the government has not made the change in a revenue-neutral way.

    The issue of privatization is, by now, a technicality. NI Water is a GoCo, just like Translink; it combines the worst parts of state ownership with the worst parts of private ownership. Translink doesn’t get excessively subsidized (capital subsidies and that’s about it, I reckon) and is expected to balance it’s books by raising charges, as we have recently seen. Yet, with certain exceptions, it is not competitive and has no motivation to improve services (seen the Enterprise lately?). That’s what NI Water is/will be like. The key fact here is the lack of leadership within our government to either improve services or to subsidize the company.

  • Comrade Stalin @ 09:25 AM:

    I agree with the almost the entirety of that.

    Your point about the management of Translink is well made, in the continuing kerfuffle over price hikes. I am less sure that we can entirely blame the company for the service, and the Enterprise in particular. That comes back to the little Six Counties mentality of governments back to the 1930s, to chronic underinvestment, and the prevalent car culture which pervades Stormont.

  • Frustrated Democrat

    Mr

    So what are ‘anonomous nobodies’ are they ‘anonomous anonomous’ or ‘nobodies nobodies’? If your definition is correct, the peculiar use of repeated synonyms would be a strange construct no often used in grammatical English. I suspect since you have a classical education..

    ‘True ease in writing comes from art, not chance,
    As those move easiest who have learned to dance.’

    ..that is not what you meant at all, but that the rest of the poulation would have understood. i.e. someone who is a noboby (irrelevant or useless person) who wishes to remain anonomous (without a name).

    So I may be a nobody who is anonomous, but who is Malcolm Redfellow does ‘he’ really exist or is that also a pseudonym and are are you therefore a somebody or a nobody?

    Back to the list in hand; the people of NI will have to share in shouldering the heavy burden of outlandish debt which is the legacy of Brown’s wasted years. That doesn’t mean that the subvention can be ignored, it can and must be addressed even if it requires a specific area of investment be given increased funding or reduced invesment to start working on the overall problem.

  • Frustrated Democrat @ 06:44 PM:

    We seem to have drifted off topic.

    My etymologies are, I assure you, solid and well-founded.

    I have finally found one common point of reference with you: Pope’s Essay on Criticism. I had to learn chunks of it for Leaving Cert, so:

    ‘Tis hard to say, if greater Want of Skill
    Appear in Writing or in Judging ill,
    But, of the two, less dang’rous is th’ Offence,
    To tire our Patience, than mis-lead our Sense…

    So what is “the overall problem”, your cliff-hanger ending?

    Now, before you again parrot that trite, mindlessly partisan “legacy of Brown’s wasted years” (an ad hominem calumny rather than an ad rem argument), please refer to a balanced piece, such as this week’s edition of The Economist and the piece headed “Hubris and nemesis”. It covers all the headline topics in three pages.

    As for “the people of NI [having] to share in shouldering the heavy burden of outlandish debt …” etc., one passing thought. Who helped to “shoulder” the burden of support, blood and money over the last thirty odd years? Hmmm? Who is financing each and every NI citizen way above those more needy regions such as the North-East of England or Wales? In 1986 the NI unemployment rate was way over 17%: who stood by you then? Who transferred jobs across the water, and, indeed, across the Border? I suppress the murmur I hear behind me of “fair-weather friends”.

    The summary line will be written in the history books. It will say that the Brown Government threw the kitchen sink at the total collapse of the British financial sector. It had no alternative except the Monty Norman (look him up) sitting-on-hands attitude, so approved of by the present Tory leadership. Oh, sorry, Norman didn’t hold back all the time: he urged the City of London to invest in Nazi rearmament and released those millions of Czech gold to that “nice” Herr Hitler.

    Sorry: that’s an unfair aside.

    Before I go off on another tangent, do please expand on that “overall problem”. Shall I guess it involves greater imposts on the lower orders? Along with greater incentives to the “wealth-creators” (who never seem to be the guys and gals who get their hands dirty)? Come on, give us a clue!

  • Frustrated Democrat

    MR

    I would have thought that by know you would know the economic situation in NI, you surely must know the fact that 70% of GDP is the public sector not the 25/30% it should be and we have an £8 billion subvention to keep the standard of living roughly equivalent with GB. To achieve this standard with only a small subvention we need to create c. 70,000 new jobs in the private sector to replace those we need to lose in the public sector.

    Do you think this will happen without Government intervention? I think not. That is why I believe the Conservatives, if elected, will invest in radical policies to get things moving in the right direction and that they will need individuals in businesses to make it happen.

    To justify this, just answer the question – Did a poor man ever offer anyone a job?

    That is the overall problem and why I think Barnett will go and we will get policies and funding directed at the fixing the problem in the medium term, not necessarily protecting living standards in the short term which happens now.

    Regarding Brown, if he had applied Micawber’s principles would we be in the total mess we are in now? The 12 years of tax, spend and borrow have come home to roost on all our shoulders with avengance and eventually would have regardless of the global problems.

  • Frustrated Democrat

    MR

    Enough said……………..www.voteforchangeni.com

    Nicholson welcomes corporation tax moves
    MEP Jim Nicholson has welcomed the announcement by Shadow Secretary of State Owen Paterson that he and Shadow Chancellor George Osborne are discussing proposals for a future Conservative government to reduce corporation tax in Northern Ireland.

    Mr. Nicholson said, “Reducing corporation tax and designating Northern Ireland as an enterprise zone offers the real potential of revitalising our regional economy. Growing the private sector is essential if Northern Ireland is to have less dependence on the public sector. Considering that the respected Institute for Fiscal Studies yesterday warned of Labour’s ‘breath-taking damage’ to the UK’s public finances, any reliance on public spending alone carries significant dangers for the Northern Ireland economy.

    “A growing private sector would create the jobs and prosperity that Northern Ireland needs. While our local Executive undoubtedly has a role in this, only Westminster could deliver reduced corporation tax and a Northern Ireland enterprise zone. Yet again, then, we see the need for change in Westminster and its importance for Northern Ireland. While others in Northern Ireland may talk about strengthening the private sector and reducing corporation tax, that is all they offer – talk. As Owen Paterson has shown, the Conservatives and Unionists are committed to actually working for this”.

  • Frustrated Democrat @ 11:55 PM:

    You’re learning: trying to slip that bit of mind-bogglingly blatant partisan propaganda at the end of a thread. Tsk! Tsk!

    Now compare your version with Sam MacBride’s take in the Newsletter (hardly an unsympathetic source):

    Under proposals being examined by the shadow cabinet, Northern Ireland would be designated an ‘enterprise zone’ in a bid to wean it from dependence on public funds, allowing for substantial tax breaks to stimulate private businesses…

    Shadow Secretary of State Owen Paterson confirmed that fuel duty and corporation tax in Northern Ireland were two of the issues being examined by the Conservatives in an overhaul of Northern Ireland’s economic framework, but said that no final decision had yet been taken …

    Mr Paterson said that there would be no dramatic slashing of the public sector by a Conservative Government but a “steady” reduction of public spending in the Province alongside an increase in the private sector.

    “It is like a see-saw – we need to raise the private sector and steadily reduce the public sector as part of a carefully thought out programme over 25 years,” he said.

    My emphases.

    ______________________

    Elia Kazan went on to make many more, and far better films than his first effort in 1935. So from IMDb, the strangely-appropriate-here review comment:

    When a group of men are turned down in a breadline, they head to the local dump, where they make an imaginary meal out of auto parts, including the titular pie. The cast impersonates politicians, big business men and religious leaders who are living comfortably while the masses go hungry in the streets. The silent film ends with a satirical sing-a-long, sarcastically reminding the audience that, although starving at the moment “we’ll all have Pie In The Sky when we die”.

  • Frustrated Democrat

    MR

    I suggest you stop digging, nothing disagrees with anything I forecast, not bad for an anonomous nobody.

    The people of NI will have to shoulder their share of reapying the billions Brown wasted. That doesn’t mean that money will not be invested elsewhere to clear up the economic mess we are left with e.g. lower Corporation Tax and the benefits of Enterprise Zone status.

    Have you anything constructive to add to the solution?

  • Comrade Stalin

    FD

    Ah, so all we need to do is get the private sector to create 70,000 new jobs. Brilliant. Why did nobody (including the previous Conservative administrations) think of that before ? The history of the Tories in NI is destroying jobs, not creating them : see De Lorean.

  • Frustrated Democrat

    CS

    The CU’s have a real plan and if they are elected will have the power to do something about it, what other NI party will?

  • George

    From the Newsletter article,
    “Gordon Brown said to Varney, ‘Go away and tell us why it won’t work’ (to reduce corporation tax]. We are saying, ‘Let’s see if there’s any way we can make it work.”

    Well the Conservatives and Unionist parties have had 10 years to answer that question and have still come up short. Why? because it’s not that simple.

    But if NI unionists believe that Northern Ireland’s corporation tax will be reduced (while Scotland is left alone) they should also be aware of one major consequence – Auf Wiedersehen a lot of Subsidy.

    To avoid any issues with the EU of state aid, any shortfall in corporation tax will have to be borne by the northern taxpayer.

    That means that if the expected revenues don’t come in over the coming years, it will be slash and burn for Northern Ireland’s public sector to make up the deficit.

    Are the people of Northern Ireland ready to take that gamble?