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Last Updated: Sunday, 25 June 2006, 15:57 GMT 16:57 UK
Lib Dems back Scots cash review
Liberal Democrat Leader Sir Menzies Campbell
Sir Menzies Campbell says other parts of the UK need more cash
The system used by the Treasury to determine Scotland's budget should be reviewed, according to Liberal Democrat leader Sir Menzies Campbell.

The Barnett formula has been the subject of debate since the Labour peer who created the system called last week for it to be changed.

Sir Menzies said there was a case for all nations and regions of the UK to have a need-based formula.

The SNP warned that changing the system would result in Scottish spending cuts.

Sir Menzies told BBC Scotland's Politics Show that other parts of the UK had social problems that required additional support and investment.

He said: "The Barnett formula was originally created for the purpose of dealing with the needs of Scotland, because the needs of Scotland were such that it needed a different financial formula.

This is not a question of levelling down and it's also not a question of turning one part of the United Kingdom against another
Sir Menzies Campbell
Liberal Democrats

"There are a lot of parts of the United Kingdom where need is just as acute and that's why I argue - not for destroying the Barnett formula - but for having a needs-based assessment for the nations and regions of the United Kingdom."

SNP leader Alex Salmond said spending to the north east of England could not be increased without cuts to Scotland's budget.

"Any proposed changes to the Barnett formula at present are just a euphemism for slashing Scottish spending," he said.

"The only change from the Barnett Formula acceptable to Scotland is full fiscal autonomy with the full responsibility for Scotland's resources and spending."

Mr Salmond accused Sir Menzies of playing into the hands of politicians who "falsely claim Scotland is subsidised by the rest of the UK".

Statistics which show high Scottish spending per head only deal with identifiable spending and leave out projects such as Crossrail, which will benefit London tremendously, he said.

'No plans'

However, Sir Menzies insisted his proposals would not automatically lead to a reduction in support to Scotland.

"This is not a question of levelling down and it's also not a question of turning one part of the United Kingdom against another," he said.

A Scottish Labour Party spokesman said there were no plans to change the current funding arrangements.

He added: "The real funding issue Alex Salmond should address is the 11bn black hole at the heart of the nationalist plan to divorce Scotland from the rest of Britain."

Watch Sir Menzies give his views

Sir Menzies defending his record
14 May 06 |  UK Politics
Row erupts over spending formula
07 Apr 05 |  Scotland

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