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LONDON – Labour have claimed that the £1 billion Tory-DUP deal for Northern Ireland has denied the rest of the UK an estimated £34 billion in public funding.
Research from the Labour party and the House of Commons Library suggests that under the Barnett formula an increase of £1 billion in funding for Northern Ireland would mean £29.5 billion more for England, with Wales getting an additional £1.5 billion and £3 billion for Scotland.
John McDonnell, Labour’s shadow chancellor said that “the coalition of chaos that was set up yesterday risks increasing division in our society by easing austerity in one part of the UK alone.”
Theresa May and the Conservative party have agreed to an extra £1 billion in funding for Northern Ireland over the next two years, as part of their ‘confidence and supply’ agreement with the Democratic Unionist Party.
The deal means the DUP will vote with the Conservative minority government on key issues such as the Queen’s speech and Brexit.
McDonnell said “we need to see an end to austerity throughout the UK not just in Northern Ireland, and not just to prop up Theresa May and her failed government.”
The Barnett formula will not apply to the extra funding for Northern Ireland as it will be given in a block grant, a point which has angered the leaders of devolved governments across the UK.
Nicola Sturgeon, first minister of Scotland called the deal “the worst kind of pork barrel politics,” and the first minister of Wales, Carwyn Jones said that it was “a straight bung.”
The Barnett formula usually applies to money given to the devolved governments, meaning that the money given is proportional to the population. Labour and the House of Commons Library’s calculation based on this is that there should be an extra £34 billion further for funding across the rest of the UK.
However, the formula is non-binding and is based on replicating levels of spending seen in England, across the rest of the UK and Northern Ireland, rather than the other way around.