Alex Salmond says SNP will not back a SE runway unless they are paid huge sums under the Barnett Formula

Alex Salmond, previous First Minister of Scotland,says the SNP will not back a new runway in south-east England unless David Cameron gives millions of ££ to Scotland. He says that to get backing for a runway from the 55 SNP MPs in Parliament, they would need to have agreement of huge funding for Scotland through the Barnett Formula.  Alex Salmond said the Airports Commission report was “shoddy”, the “work on the cost/benefit analysis was pretty ropey”, and Sir Howard Davies was “blinkered”. Salmond wants guarantees of extra Scottish flights from an expanded SE airport. Under the Barnett Formula, for every £ spent in England, a proportion must be spent in Scotland, based on its population compared to that of England. It is know that at the very least, a Heathrow runway would cost the public £5 billion for tunnelling the M25. Under the Barnett formula of about 10% of the cost being given to Scotland, that would mean paying about £500 million.  (And would the other regions also need their separate payments?) Salmond: “What we’d want to know is that if it were to be a development which depended on infrastructure spending, is that spending going to be properly Barnetted? Or is it going to be another fiddle like the Olympics?”  He commented Heathrow and Gatwick had been “desperate” to speak to the SNP, with both sending lobbyists to the party’s conference.


Salmond: SNP won’t back runway in South-East unless Scotland gets cash

16.10.2015 (Evening Standard)

Alex Salmond today said the SNP will not back a new runway in south-east England unless David Cameron hands millions of pounds to Scotland.  [Alex Salmond served as the fourth First Minister of Scotland from 2007 to 2014. He is currently a member of both the Scottish and United Kingdom parliaments.]

In an interview with the Standard he demanded the Prime Minister put cash on the table to secure critical support from his party in the Commons. The SNP’s former leader also condemned Sir Howard Davies, chairman of the Airports Commission, as the “blinkered” author of a “shoddy” report into how to expand UK airport capacity.

Ahead of talks with Heathrow and Gatwick this week, Mr Salmond went on to say his party will refuse to back any airport’s expansion plan without guarantees for extra Scottish flights.

His intervention in the middle of the SNP conference comes as the Government decides whether to follow Sir Howard’s recommendation for a third Heathrow runway.

Mr Salmond argued that Mr Cameron lacks the support from Tory MPs to deliver the controversial expansion, given he has a majority of just 12 and Labour’s position is unclear.

While insisting a new runway was necessary, Mr Salmond said the Prime Minister would have to pay to secure the support of 55 SNP MPs. In particular, he said public money spent on airport expansion must be subject to the Barnett Formula — meaning for every pound spent in England, a corresponding amount must be spent in Scotland.

He said: “Heathrow says it’s a private development, but it depends on at least £5 billion of public money, and that’s only the initial estimate.

“What we’d want to know is that if it were to be a development which depended on infrastructure spending, is that spending going to be properly Barnetted? Or is it going to be another fiddle like the Olympics?”

Mr Salmond claimed only a small proportion of money spent on the 2012 Games was subject to the Barnett Formula, meaning Scotland lost out.

He went on: “Then, of course, that was in a different political situation. There’s a lot more influence now.

“There haven’t been any guarantees from the Government about the Barnetting, not of the airport expansion itself but of the infrastructure leading to the airport. If there is to be spending like that, then it has to be Barnetted.”

If the £5 billion of Heathrow-related spending Mr Salmond speaks of were subject to the Barnett Formula, it could mean an extra £500 million for Scottish projects.  [And if TfL is right that the cost could be as high as £15 – £20 billion, for surface transport alone, that means £1.5 – 2 billion ….] 

Turning to Sir Howard, Mr Salmond complained the commission chairman failed to accept the need to increase flights to Scotland immediately.

He said: “Howard Davies is a particularly blinkered individual, he couldn’t seem to grasp that fairly elementary point since he was so busy trying to juggle Boris’s airport against Gatwick, against Heathrow.

“I don’t think the Commission report is particularly good incidentally. Given the amount of time he spent on it, or his commission spent on it, I thought it was pretty shoddy. The work on the cost/benefit analysis was pretty ropey.”

Mr Salmond said Heathrow and Gatwick had been “desperate” to speak to the SNP, with both airports sending lobbyists to the party’s conference.

He is due to meet representatives over the next two days in Aberdeen and will deliver a stark message. He said: “The question I’ll ask is, ‘What guarantees will you give in terms of connectivity of Scottish destinations into either airport if they become the choice?’ If the answer is, ‘There are no guarantees’, why on earth would we want to support it?”

He added: “We have to start talking specifics, not vague generalities. If people say there are no guarantees they can give, then fine. It’ll be quite easy to make up our minds.”



More on the Barnett formula:
Devolution: What’s the Barnett formula?
30 October 2014 (BBC)

What is the Barnett formula?
The Barnett formula is a system of grants which dictates the level of public spending in Scotland, Wales and Northern Ireland.
Under it, extra funding – or cuts – from Westminster are allocated according to the population size of each nation and which powers are devolved to them.
When the UK government increases or decreases funding for departments such as health and education in England, the Barnett formula is used to decide how much devolved governments will receive.

The Barnett formula was designed in 1978 as a temporary solution to settle rows about government spending allocations.
It was also partly created to allow for Scotland’s lower average incomes, larger physical area, and healthcare and housing needs.

Was Scotland already getting more money?
Yes, Scotland’s public spending windfall goes back more than a century.
In the 1880s the “Goschen Proportion” – which was named after the then Chancellor George Goschen – channelled £11 to Scotland for every £80 spent in England and Wales because there were roughly 11 Scots for every 80 people in England and Wales.
Scotland’s population fell below 11/80th of the population of England and Wales in 1901, so it started receiving more public spending per head than England.  The proportion was the first time the UK government had used a formula to distribute public spending across the constituent nations.

What does Lord Barnett think of his formula?
Lord Barnett, now 91, never intended his formula to last for 36 years.  He recently told the BBC Radio 4’s World Tonight programme it was “grossly unfair” and repeated his call for it be scrapped.   He also told the Daily Telegraph introducing it was a “terrible mistake” which had become a national and personal “embarrassment”.

The Barnett formula is a mechanism used by the Treasury in the United Kingdom to automatically adjust the amounts of public expenditure allocated to Northern Ireland, Scotland and Wales to reflect changes in spending levels allocated to public services in England, England and Wales or Great Britain, as appropriate. The formula applies to a large proportion, but not the whole, of the devolved Governments’ budgets − in 2013-14 it applied to about 85% of the Scottish Parliament’s total budget.[1]

The Barnett formula is said to have “no legal standing or democratic justification”,[3] and, being merely a convention, could be changed at will by the Treasury. In recent years, Barnett himself has called it a “terrible mistake”.[4] In 2009, the House of Lords Select Committee on the Barnett Formula concluded that “the Barnett Formula should no longer be used to determine annual increases in the block grant for the United Kingdom’s devolved administrations… A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs should be introduced.”
Following the September 2014 Scottish independence referendum, the Barnett formula came to widespread attention amid concerns that in a last-minute government bid to sway voters against independence, Scotland had been promised continued high public spending.

How the formula works
The formula consists of a baseline plus increases to central Government funding to Scotland, Wales and Northern Ireland based on increases in public spending in England in comparable programmes, applied in proportion to current populations:

Extra funding in Scotland, Wales or Northern Ireland = Extra funding in England × Population proportion compared to England × The extent to which the relevant English departmental programme is comparable with the services carried out by the devolved administration

For example, in 2000, the Scottish and Welsh populations were taken to be 10.34% and 5.93% (respectively) of England’s population. For programmes in the Department of Health, the comparability factor for Scotland and Wales was 99.7%. Therefore, if £1 billion was to be added to planned health expenditure in England, then the extra amount added to the Scottish block, compared to the year before, would be £1bn x 10.34% x 99.7% = £103 million, and the amount added to the Welsh block would be £1bn x 5.93% x 99.7% = £59.1 million.