Wednesday, 23 July 2008

A Guide to the Barnett Formula

I’ve been running with the hoodies of blog steerage (as a Scottish journalist once coined) for a few years now and the same arguments keep coming up time and again.

So, I’ve decided to create a ‘cut out and keep’ guide to the Barnett Formula. I’ll do the same for an English Parliament, but first...

1. Does Scotland actually receive more money than Wales and every English region, without having to pay a penny extra in taxes?

Yes, here are the facts.

2. Isn't it based upon need and if Scotland have greater need, shouldn't they have a greater share?

It's not based upon need and Scotland don't need it.
As Alistair Darling pointed out, Scotland has the highest income per head in the UK, outside London and the South East. So why does the third richest "region", out of twelve, get the second highest handout? More importantly, why don't English MPs challenge Brown when he lies to Parliament that Barnett is based on need?

3 Someone once told me that London gets more than Scotland, is this true?

It is possible to show London gets more if you include “invisible” expenditure. How ANY taxpayers’ money should ever be allowed to become invisible in the first place is a separate question, but a (not exhaustive) list of invisible spending can include such items as civil servants' wages, army, navy and air force top brass, the Queen’s frocks, Gorbal Mick’s expenses, MPs second homes, plasma teles and the deputy Prime Minister’s dinner bills. None of this goes to people in the form of services (as in Scotland). It just means more well paid people, higher house prices, more Michelin starred restaurants and a lower standard of living for ordinary people. A double whammy as someone once said.

4. Would it make any difference if such largess was reigned in?

David Cameron said “I always say to English audiences …do not believe that there's some pot of gold here…Get it in perspective."

OK Dave (may I call you Dave?), let’s do that. In the ten years following devolution, Scotland received almost £60bn more than England

That’s a lot of money when spread between 5m people, but in England (ten times Scotland’s size) it is enough to pay for the entire schools and universities budget. This also translates into better pay for nurses, teachers, smaller class sizes, life saving cancer drugs (not available in England), free tertiary education, sight saving drugs etc etc.

5. Does oil have anything to do with it?

No, if Scotland is part of the UK it is UK oil and its benefits should be distributed on the basis of need. This may be a good argument for independence (see below) but not for special (ie unfair) treatment.

6. Does England subsidise Scotland, or is it the other way around?

Tony Blair puts England’s contribution at £10bn and the Scotsman Newspaper recently put it at £20bn. The McCrone report stated 30 years ago that Scotland’s surplus would be “embarrassing” if they were an independent nation. The truth is, no one knows because successive Government departments have obfuscated the facts. Maybe Scotland subsidises the rest, maybe England, maybe not…who cares?

The point is WE ALL PAY EXACTLY THE SAME TAXES, BUT SOME BRITONS GET A LOT MORE BANGS FOR THEIR BUCKS (See 3 above) and this is THE problem with Barnett.

7. Should Scotland be “fiscally independent”?

No, this phrase suggests a special treatment within the Union (see 3 above) they should either be “in” or be “out”… makes yer choice!

8. Should Scotland be independent?

I’d vote for it, but that’s my opinion. Your opinion should be based on more factors than money though.

9. Is the Union dead?

I can’t see England putting up with this situation for much longer, can you?

1 comment:

McFeagle said...

A interesting and typical view of the Barnett formula .

It doesn't mention that Wales and NI benefit from it as well.

It doesnt mention that 85% of the funding actually goes to England .

It doesn't mention that the per head figure was only used by Joel Barnett to explain how it worked to thick politicians.

Yes its out of date .
Yes it needs to be reviewed .
and its being reviewed now in 2009.