Labour politicians in the English regions were yesterday outraged by the party's commitment to maintaining the Barnett formula, a system of funding that results in Scotland, Wales and Northern Ireland receiving greater spending per head of population.

A review of the formula was ruled out for the next parliament despite protests from Labour campaigners, the Campaign for the English Regions and regional chambers of commerce that the system was unjust.

In Scotland, the national leadership yesterday made it clear that its manifesto commitment not to raise income tax did not prevent the Scottish executive from using their tax-varying powers to raise rates north of the border.