A COMMITMENT to scrap the controversial funding formula which discriminates against the North-East in favour of Scotland, has been included in the Liberal Democrats "Alternative Queen's Speech".

At the launch of the document, published in advance of next week's State Opening of Parliament, Deputy Leader and Berwick-on-Tweed MP Alan Beith said the proposals would be a massive boost to the North-East's economy and public services.

The measures include legislation to establish a Finance Commission of the Nations and Regions, developing a new Revenue Distribution Formula (RDF) to replace the Barnett Formula, which gives the region a shortfall of about £1bn of public spending compared with Scotland.

The new formula would "enshrine the principle of equity of finance across the UK's nations and regions" and would be "needs-based", taking account of key health, poverty and education measures.

It would "recognise the problems of providing services in areas with widely dispersed populations, taking account, for example, of sparsity of population and other features of rural life which have an impact on health, education and business".

The proposals also reflect Government plans to allow a directly-elected regional assembly to be set up inthe North-East, provided local people vote for it.

The new bodies would have a key public service role, say the Lib-Dems, replacing unelected regional quangos such as Regional Development Agencies and NHS regional executives.

Mr Beith said: "These are considered measures, which will make a real difference to people's lives, especially in the North-East.

"We are committed to replacing the outdated Barnett formula with a needs-based funding formula which will ensure the North-East at last gets its fair share of resources.

"We want to see the free personal care for the elderly, brought in by Liberal Democrats in Scotland, to be available south of the border, too."