The Barnett formula was a fix to settle by how much bloc grant for Scotland rose each year, given the extent of the rise in comparable English spending.
It currently polls very badly in England. The reason is that Scotland can spend around one fifth per head of the population more than England. This enables Scotland to offer free tuition for Scottish students at university, and better terms for care for the elderly amongst other matters. Now that Scotland is around the same income per head as England, and now SNP Ministers are constantly telling us Scotland is a rich country, many in England ask why the favoured treatment?
The Barnett formula relates to changes in annual spending. If, for example, a given public spending item was allowed £100 million more spending next year than this in England, Scotland would be allowed £10 million more for the same spending. The English increase is multiplied by the proportion of population in Scotland to England to derive the extra amount. If some of the spending item is not devolved, then the comparability percentage is also applied, so Scotland only gets an increase for that part of the budget which is devolved. If only 50% of the extra £100m budget was devolved, Scotland would get an extra £5million.
Given that Scotland therefore only gets the same per head increase as England, why does she end up with an advantage in the total? The main reason is the starting or base budgets in 1979 where Scotland already was allowed to spend more per head. This has been compounded by the relative decline of Scotland’s population to England. This means that the per capita value of the base budget has gone up compared to England.
The 3 leaders have made two promises to Scotland on these financial matters. The first is that Barnett will continue to apply. As a means of changing the future spend it can still make sense, as it means parity between England and Scotland for the increments. I would advise my fellow Englishmen and women to calm down a bit about the formula for annual changes, as it can make sense which is why it has endured for so long.
The second promise is that Scotland can raise its own Income Tax in future, and maybe some other taxes. As long as this money is taken off the bloc grant and the money that attracts the Barnett formula, this could help sort out the imbalances and tackle some English resentment at Barnett, as Barnett comes to cover a reducing balance of spending. There is a lot to be said for Scotland taking responsibility for more of its own revenue raising, and accepting that more of its spending will depend on its success in levying taxes on its own taxpayers. What matters is a fair baseline budget and settlement this time round when the new taxes for Scotland make a big change to the bloc grant.
September 22, 2014
What really matters is that Cameron has sought to win a referendum by putting a batrely thought through negotiation on the table, totally unscrutinised by anybody let alone the electorate, in the closing days of an argument that has been characterised by the established politicians at Westminster, the media and big business all sowing fear, uncertainty and doubt. Inevitably this has led to people on all sides feeling tricked and misled.
Cameron and others will now persuade MPs to temper their objections and allow devolution of Scotland to proceed virtually unchallenged with vague promises of tackling the West Lothian question “after gthe next election”. Kicking it into the long grass.
We should reflect that the lead up to any EU referendum is likely to be characterised by much of the same underhandedness. Nothing on the table beforehand and the entiure establishment rolled out in the closing stages to sow fear, uncertainty and doubt in a massive attempt to maintain the status quo.
The Barnett formula is a massive fudge designed to deflect argument but ends up totally distorting the way in which payments are made. If England’s population is being massively changed by immigration flooding into particular areas (even while other areas are being depopulated because of lack of work) this requires substantial spending on providing new health care services, new schooling, new policing, new social services and if the population in Scotland is more or less stable by comparison there is absolutely no justification for mirroring that level of spending in Scotland on a per head basis.
I guess there are only a couple of languages being spoken in Scotland too, so less need to spend what England needs to spend on translation services. Yet under the Barnett formula, Scotland gets her share.
None of this even begins to consider why Scotland should continue to vote on matters such as fox-hunting, tuition fees or prescription charges in England.
Anbd it certainly doesn’t begin to answer the question why political leaders have made promises on the back of a fag packet without consulting parliament first. They had years to get this sorted out in advance, same as they should be doing over the EU.
September 22, 2014
Neither does it tackle the question of why the rules were changed once postal votes had already been cast. I can see that happening, too, in a possible EU referendum. It all favours vote UKIP = no need for an EU referendum!
September 22, 2014
Clearly there is no concept of Ultra Vires in these matters, nor even close. Was the “Vow” given under the Prerogative or what? I don’t know why we bother with manifestos and mandates any more. And still the SNP are being bad losers and looking to make trouble at every turn. Why can’t they see that they overegged the pudding and it’s time, from their point of view as well, to give it a rest?
September 22, 2014
I don’t see how the Vow could be legally binding on our sovereign Parliament, or on the the Crown in some nebulous common law prerogative angle.
It is perhaps morally binding on the political leaders that assented to it, however, and I think in that regard the Prime Minister ought to do his best to give effect to it. Labour are desperate to slither out of their own obligations, not least because of the threat of fair representation for English voters. David Cameron should make the argument for realising the terms of the Vow, and delivering English democracy simultaneously, from a moral and democratic basis.
September 22, 2014
According to the FT it seems Cameron has already given up and will not insist on any fairness for the English and the rest on the UK.
If true the man is even more pathetic than I thought.
September 22, 2014
I don’t see that Cameron has any realistic option but to go nuclear and deliver on Devo Plus as best he can on and pledge an English Parliament and a federal structure. This really is a time to grasp the nettle from the point of view of the UK and the Conservatives.
This is not the way that constitutional changes should be made ideally, but I’m not sure it was so very different in the 1680s and the early 1700s. At least there would be a genuine crisis to resolve and an imperative for action, rather than Labour’s idle constitutional tinkering.
Time to get some people together and hatch a plan which will involve an EP, a federal government and probably dumping the HoL. The fact that this is so close to a GE and he doesn’t have a proper majority makes it hard, but I think it would be a far more convincing electoral bait than a half-baked EU referendum offer.
There and again, he’s hardly the man to seize the day. So we’ll probably muddle along with the SNP making much of the panic stricken mess the Three Stooges offered, and very likely a Labour government even more devoid of ideas, inflicting their self-interested fudge for the E-word. Then maybe after all have another Scottish referendum producing a yes vote, with truly disastrous consequences for everyone.
September 22, 2014
It seems unlikely another Scottish referendum will be held soon but if the SNP’s manifesto for the May 2015 GE made it clear that a vote for them would be a vote for independence then that would provide another opportunity to test the water.
If the promises made by Cameron, Clegg & Miliband have not been met in seven months then Labour may well lose a significant number of their 41 Scottish MPs. I reckon the SNP will pick up a few LibDem seats too so perhaps they could end up holding the balance of power in the next Westminster Parliament 🙂
Their next opportunity would be the 2016 elections to the Scottish Parliament.
September 22, 2014
Glasgow is full of asylum seekers so the courts and doctors’ surgeries provide plenty of work for interpreters of innumerable languages. Most official forms are printed in ‘community’ languages.
September 22, 2014
Of course, the Barnett formula would be another motive for the secret conspiracy to enrich the English under the last Labout government, although the prime movers, themselves, were a distincly less wholesome bunch than the Scots ad may not have had aiding the Scots upermost in their warped minds.
I cannot see any justification for the Barnett formula either then or now, but as with other Labour policies, they have been carried forward by this hopeless unconservative government.
September 22, 2014
The Conservatives do not have enough votes in parliament to overturn the Barnett formula even if they wanted to.
September 22, 2014
“…even if they wanted to.”
Which they clearly don’t!
September 22, 2014
I enjoyed reading your comment. Ask Ed Miliband to justify repeatedly Scottish MPs voting on devolved issues because even my Mum is taking an interest!
What do we spend on translation services? How much does France, Germany, Poland, Italy spend on translation services? Does the whole EU provide free translations to Brits abroad? Why aren’t family members translating for family until English is learnt?
September 22, 2014
I understand that the Barnett formula can be adjusted to take into account things like population changes.
No matter what the financial settlement is, Scots MPs should not be voting on English matters. Cameron will try to get the other parties to agree to a suitable EV4EL arrangement early next year but will probably find that Labour and the LibDems will not cooperate. Therefore he will have to go into the 2015 GE by saying that only a majority Conservative government can achieve it. Hopefully you will support him on this !
September 22, 2014
Noooooo! You’ve been nobbled and sold us out. There is absolutely no way you write this article that makes it sound as though the Barnett Formula is in the best interests of the citizens of England. Shame on you.
Reply Not nobbled! Try re reading it – Scotland raising her own Income Tax changes it radically as I am trying to point out. What matters is how that change is reflected in the budgets.
September 22, 2014
Spot on.
Spending should be equal per person across the UK. If a region wants to spend all its money on its favoured, let it.
Instead we have MPs just stitching the population up. In particular the English population because it made a pledge worked out on the back of a bar mat whilst pissed.
September 22, 2014
Lord Barnett in today’s Telegraph: “My Barnett Formula needs to be tackled now – but no politician will” – including our host it seems!
September 22, 2014
Barnett himself wrote yesterday that his formula is simply wrong. It was written as a temporary measure. Of course its not right that we subsidise Scotland’s tuition frees, prescription charges, no hospital parking charges, care costs for its elderly etc. All this devolved powers for all the Home Nations is actually a giant smokescreen to hide the fact that over 70% of our laws are made by the Brussels dictatorship and nodded through here and elsewhere in the UK. We need the EU power removed by withdrawal from it then we need to look at devolved Parliaments in the Home Nations thereafter. The cart before the horse as usual with the legacy parties.
All of the legacy powers are signed up Europhiles so we need the only patriotic power elected to remove the self interested incompetent parties, then all issues that concern people will be addressed. Mass migration and all the EU dictats that hurts us with its ever increasing interference, regulation and power grabs.
Is Mr Cameron looking for a bit of credibibity to invite you and a few others to Chequers today? If he took you and the others seriously you would have been in his cabinet. So be warned, you will be used by your leader.
September 22, 2014
Reply to reply
Let’s hope not nobbled. I outline how disadvantaged we English are here (despite the West Lothian issue) :
Two family estates – mine and my friend ‘Scotty’s’ who is in the same job as me and earns 25% more than I do (yet I subsidise him ???)
Our respective children’s estates will be very different after my paretns’ and my our generation have passed on – my children will be far worse off than Scotty’s:
– My parents’ and my house (both modest) will have been subject to 40% inheritance tax
– It’s quite likely a chunk of those estates will have been taken up in care fees and health costs
– My house and my children’s modest houses (if they can afford them) will have been subject to higher rate stamp duty (and hard commuting getting to work from them)
– My children will have been subject to £30,000 of student fees
– My children will have to earn in the 40% tax band to be able to pay local rents or house prices – if they don’t then their lifestyles are going to be very meagre.
Either way they are going to be far worse off than Scotty’s.
One can’t help but think that the “Ed Miliband has been skewered by Cameron’s guile” is but retrospective spin after his panic in recent weeks.
Your explanation of the Barnett issue needs to be much plainer than it is so that ordinary people like me can understand how it is that we are not being shafted.
Thank you.
September 22, 2014
– My parents’ and my house (both modest) will have been subject to 40% inheritance tax
Houses far more modest than Scotty’s mock castle, which is well under the 40% threshold.
September 22, 2014
PS, 16-year-olds voting is a dangerous precedent. Impressionable young minds captive and indoctrinated by members of Unite.
September 22, 2014
Yes, it will also provide further opportunity for postal vote fraud, as there could conceivably be more voters under one roof.
September 22, 2014
Indeed an idiotic decision sixteen year olds who have never paid any income tax or national insurance and have been indoctrinated by lefty teachers (and the BBC) into magic money tree economics, ever higher tax rates (with less tax actually raised) and the quack science of the green religion charities and nutters.
September 22, 2014
Reply to Reply: Dear Mr Redwood, you seem to be saying that the Barnett formula would be fine if the population bases were corrected and kept up to date. That sounds OK if the Scots wear it, but would even then be a bitter blow for Wales. The admirable Lord Barnett, I read, thinks it is no longer OK and continues to exist only because it requires too much political backbone to change.
September 22, 2014
Much simpler to just allow all taxes raised in Scotland to be spent in Scotland without any transfer to/from the bulk of the UK. Scotland should be allowed to set taxes as she feels fit and spend as she wishes. Borrowing should be in line with the bulk of the UK. Scotland, like Ed Balls today, will discover there are limited funds and you can only spend them once. There is no magic money tree.
September 22, 2014
There is no magic money tree.
I have seen this phrase used several times on this blog. I’m just wondering if you, and others who’ve used it, have given any real thought to where money really does come from in the first place?
Having to hire the labour to pick the magic money fruit from the magic money trees is quite an expense. It was discontinued several years ago and now nearly all money is created digitally in government or BoE computers. That’s a much cheaper process! 🙂
September 22, 2014
@Peter
Even fictitious money created at the stroke of a mouse attracts ursury and comes with the expectation of repayment.
If government could create its own funds it would still need credibility for those funds to retain their value.
September 22, 2014
@ Narrowshoulders,
If government could create its own funds…
But, Government does exactly that. All the money we use to pay our taxes comes from Government spending. All the wages and the profits of the private sector are derived from the money that Government spends into existence. If Government overtaxes, and removes that money from the economy too quickly, there is less money around, businesses fail and workers lose their jobs.
But Governments do need to tax to the right extent. Not to raise money as many people think. They’ve created it in the first place so why do they need it back? Two reasons. Firstly, to create a demand for the currency and therefore make it valuable. We all need to acquire money to pay our taxes. Secondly, to prevent inflation. The government needs to fine tune the economy so that it works close to full capacity, but beyond full capacity. That will only lead to high levels of inflation.
September 23, 2014
@Peter
As you and I both know government must first borrow money in order to spend it into existence.
I am fine with the sovereign money theory but at present that is not what happens. Financial imstitutions lend fantasy money but expect interest and repayment.
September 22, 2014
Clearly the three leaders are not in any position make any promises, it is a matter for the tax payers/voters in the rest of the UK to approve (as they are the ones who will be paying for it) they must have a say just as the small minority in Scotland were given a say. We cannot have the tail wagging the dog any longer.
As for honouring pledges Cameron should perhaps start with his Cast Iron promise, his IHT one first and the many others he has broken. Or perhaps is it only vows and pledges that are honoured, Just as treaties magically stop being treaties once ratified, one has to watch all the wording with slippery eel Cameron types?
Cameron it seems either does not want to win in May or is still very deluded about the path to take for victory. He could still win if he played it right for once. Miliband is doing his best for Cameron after all.
It is of course absurdly not just the Scottish who get free university places in Scotland but everyone in the EU other than those in the rest of the UK.
Reply The pledges or promises of the Conservative Manifesto could not be delivered as we did not win a majority, unless we could persuade Lib Dems to vote for them. You might as well criticise Labour for ratting on their 2010 election promises.
September 22, 2014
Reply to reply:
So this makes his promises meaningless unless you get a clear majority? Perhaps then you should explain to the Scots that Cameron’s promise to them last week was meaningless because a majority of Tory MPs now disagree with it?
Reply NO, the promise worked because all 3 leaders with MPs in the Commons signed it!
September 22, 2014
Reply to reply,
” the promise worked because all 3 leaders with MPs in the Commons signed it!”
Without any reference to anyone in Parliament other than Gordon Brown who told them what to do!! Outrageous! What is the purpose of you MPs other than to act as lapdogs to your useless leaders?
September 22, 2014
So the Scottish were asked in a referendum what they wanted. In a mad panic the three leaders foolishly promised extra power and money to them but without any reference to the 90%+ who with have to pay for it all.
They had no authority from voters to offer this in a mad panic or
indeed at all.
September 24, 2014
“They had no authority from voters to offer this in a mad panic or indeed at all.”
Not true, look at the 2010 manifestos, Even Farage has stated that Cameron should have offered devo max from the outset, and that wasn’t even in the UKIP 2010 maneifesto.
I do wonder who was truly foolish in this episode.
September 22, 2014
Both leaders of the coalition government signed a deal which would lead to fewer MPs, fairer sized constituencies and also the power of recall.
Didn’t stop them reneging on any of that, did it?
September 22, 2014
To reply:
Clearly his deal with the Libdems could have incorporated them had he negotiated the deal properly and cast iron was ratted on before the election anyway. That is the main reason why he lost.
September 22, 2014
Reply to reply,
JR: “You might as well criticise Labour for ratting on their 2010 election promises.”
You abandon your own logic when it comes to UKIP, as you have accused that party of breaking its promise to take the UK out of the EU by virtue of never being elected!!
Reply – because UKIP are always complaining about ratting by others who did not win the election.
September 22, 2014
Reply to reply,
Latest Survation poll puts UKIP on 23% for the next general election, a mere seven points behind the Conservatives.
September 22, 2014
“Go back to your constituencies and prepare for government.”
Tell me, Brian, is it true that UKIP’s manifesto will be printed on a series of beer mats?
September 22, 2014
Reply to reply,
Has your party been leading a coalition government in office for over four years or not? Last time I looked it still was, and so, when I and others have the temerity to highlight your party’s failings and broken promises it is disingenuous of you to pretend otherwise.
September 22, 2014
The Tories will not it seems even de-rat on May 8th if they get a full majority in 2015, so do not blame it on Cameron’s throwing of the last election. Cameron likes the LibDem policies as he is at heart a Libdem.
September 23, 2014
“Has your party been leading a coalition government in office for over four years or not?”
Well of course it has, but even leaders of a coalition don’t have it all their own way. Once a coalition government is formed then all bets are off. What was promised in the manifestos of either of the coalition parties may or may not be able to be delivered. So there’s really no question of broken promises unless both parties promised the same thing.
You may claim the Conservative leadership did not strike a sufficiently good bargain, though. That’s a valid criticism. Looking back, the Conservatives could have suggested that each party could have had a choice of referendum subject. The Lib Dems would have chosen PR. The Conservatives could have chosen Europe.
September 22, 2014
Clearly his IHT promise was unimportant to Cameron in his “negotiation” with the Libdems (more like a complete surrender). Worse still, he allowed the IHT threshold to reduce further by inflation. He has not even said he will keep Osborne’s IHT promise in future should he get a majority in May 2015.
Clearly that is highly unlikely on the current path.
September 22, 2014
Sorry Mr Redwood that won`t wash, the Labour party is not in power your party is, the votes the conservatives gained were votes for your manifesto. So it is not good enough to take power when you do not have a mandate and then complain you did not get enough votes to keep your promises. I know this is supposed to be the post democratic age but really!
September 22, 2014
Reply to reply – Ok, I’m with you on that, but I think it is paramount that the Con Party make a very clear Manifesto this time round. Reading / listening to / watching various media will give a massive indication of what the public wants, and that is a clearly thought out process of FAIR and parallel devolution, a strong UK Government which leaves petty Party Politics to the devolved governments, an in-out referendum on Europe, a Bill of Rights reflecting common sense, and responsible, sensible, and accountable public spending. And – what Salmond missed – a vision of our nation in 10 years’ time.
Milliband is managing to alienate himself despite his hollow promises/bribes about minimum wages and Child Benefit, foreign criminals, health and benefit tourists and underpaid eastern european workers are making people more and more despairing of border controls, and Alex Salmond has galvanised the English more than he did the Scots!! The iron is hot, 33 weeks to go…….
September 22, 2014
Reply to Reply: What about Heathrow? Whitehall rationally persuaded a reluctant Labour Government to back a Third (main) Runway. Both Conservatives and Lib Dems sought to attract votes by pledging/vowing to veto the third runway. The Coailition Agreement between them said the Coalition would cancel the third runway and refuse permission for additional runways at Gatwick or Stansted. Once in office, they read the Whitehall brief and changed their minds, using the cowardly Brownian mechanism of setting up a Whitehall-staffed “independent” committee, under a respected public figure whose reputation needed some re-polishing, to report just after the next election with no options barred.
The Coalition had a majority, both parties had offered the same election pledge but they still reneged.
September 22, 2014
We need new runways at both Gatwick and Heathrow and a high speed link between the two. Get on with them both please.
September 22, 2014
But the Libdems couldn’t persuade Cameron to offer an EU in-out referendum per their manifesto promise. Work that one out!
September 22, 2014
Not quite the same as Labour. Cameron is PM & did a deal with the Libdems. As far as I can see got nothing out of it much perhaps the M4 bus lane and squatting laws – for the UK anyway. Clearly IHT and EU were not his priorities. Making 299 + tax increases, wasting taxpayers money all over the place, soft loans to the rescue the Euro PIGS, carpeting the country in pointless wind farms and PV arrays at vast expense, appointing token women and the likes, appointing Lord Patten and Ken Clark, idiotic gender neutral insurance & pensions, continuing Browns pensions theft…… these were more his thing.
September 22, 2014
He got NOT offering an EU in-out referendum, and perhaps they will get that out of him next time?
September 22, 2014
Rubbish. Right to recall agreed by both and fudged by both. No ifs or buts on cutting immigration- you are having a laugh! Cutting the structural deficit and debt? Where was gay marriage in your manifesto? Queen’s speech? Hogwash JR, and you know it. How many U turns broken promises? Not all down to the Lib Dumbs I am afraid. Your pro EU leader stated he would not promote closer union with the EU and spent £18 million pounds of our money doing exactly that. He would not let any let any sovereign powers go to the EU, then we have the EU arrest warrant. Good grief the list is endless. The three line whip to prevent an EU referendum taking place and now expects us to believe he will have one in the distant future upon a host of contingents. We just witnessed his negotiation inability, I feel confident no one in the real world believes Mr Cameron. He has gold plated Miliband’s ideas on energy and let’s Brown negotiate new terms for Scotland that we have to pay for without a say in the matter. He is clueless and useless.
September 22, 2014
A very fair summation. Sad if the alternative is Miliband.
September 22, 2014
If Mr Cameron has put his name to a promise to maintain Barnett there’s not much he can now do about it. However one dresses it up it isn’t fair on the rest of the UK. If Scotland can raise her own taxes that’s excellent, although of course this must only happen if the same powers are devolved to England Wales and N Ireland. But we must be clear what happens if there is a shortfall – if it just gets made up by more UK borrowing or transfers the power is meaningless and damaging for the rest of us. If the Scottish govt is to have powers to raise tax it must also have responsibility to fund its budget.
September 22, 2014
Richard–You have ignored the dreaded Oil. Give them 90% of the Revenue from that, charge them for Defence and UK matters, then much as you say. Barnett is ridiculous. We were told that Scotland is the 14th richest per caput in the World. When the Oil runs out and (English) Fracking takes over then naturally it is the English that need a Referendum (Right??). It is good that the majority of Scots are not as greedy as Salmond thought.
September 22, 2014
Nonsense, he can just ignore the vow just as he did most of his other promises. That is something he is good at. After all he can just say he could not get satisfactory agreement from the other parties for a deal that was acceptable to the rest of the UK voters. Voters to whom it should be put in a referendum. He tried his best but for selfish political reasons they blocked it he can say, just as the Libdems blocked fair boundaries.
September 22, 2014
Darling said something like:- we have to honour the vow or politicians will never be trusted again. Perhaps he has not noticed they are not trusted one thou, so it will clearly make no difference at all. “No return to boom or bust” was that a promise?
September 22, 2014
Absolutely right John! The Barnett Formula will become redundant if proper devolution runs its course.
With regards to budgetting, I would like to think that Scotland will be “internally” re-charged by the “British Exchequer” for the membership fees of NATO/EU/UN/Cost of Embassies around the world/liberation of third world debt/National debt repayment burden etc etc.
I also think that whatever government is in power should demonstrate to the Scottish people annually what the “Union Premium” is to them, in terms of low interest rates; access to markets; the amount English consumers buy of Scottish products and generally make it clear to Scotland that the benefits of remaining in the Union are better for all of us and that we need to terminate this constant whining about being short changed.
I think if we are looking to devolved all but the most key Joint Budget Areas (Defence and Foreign Affairs and Europe) then the Scots need to be clear that they are responsible for their finances, including income from North Sea Oil which will replace the Barnett Premium.
I still find it incredible that Scots given that they are on the threshold of being able to control their own affairs are still balking at England having the same rights and I really think Mr. Cameron needs to get a grip on this debate and tell the Scots in essence where to get off. The English have had to suffer Labour governments in the full knowledge that most of England has rejected Labour and that their constant interference in English affairs is completely unacceptable. The Scots wanted devolution they will I am sure get it – equally what’s good enough for Scotland is good enough for England and an end to interference in English only matters is now urgent.
I hope your conversations at Chequers were productive, we feel more English Conservative MPs are coming round to the thought that English MPs should now take complete control of English matters which is a relief to the English who could not understand why our own political representatives took so much persuading to do what was democratically right and fair. Let’s hope the momentum continues, we avoid the break up of England into Regions city or otherwise and that we can have strong County Government so both the rural and urban voters within counties have their voices heard and Labour is not allowed to empire build in our English cities having lost the popular vote in England. Keep going John, you are doing a great job!
September 22, 2014
Indeed. Somebody should be remembering that we have had Mr Brown, Mr Darling, Mr Alexander, Mr Robertson, Mr Reid to name but a few Scots in very senior positions in the UK government. This “Westminster southern clique” business is by and large rubbish looked at on a longer term basis.
September 22, 2014
Three of the past five Chancellors have been Scottish Joe, not counting the current, unusually powerful Chief Secretary, who is one of the “Quad”.
September 22, 2014
You didn’t mention Tony Blair born in Edinburgh, educated at Fettes Edinburgh, and his top appointments Charlie Falconer from Edinburgh and Derry Irvine made Lord Chancellor and the Scots feel they’ve been under-represented in Westminster – a complete and utter joke that not one journalist rebuffed in the programs I watched!
September 22, 2014
If you have a strong country government you have what you have now. A strong S.E region that gets richer and regions outside that keep getting poorer. Having regional government and a strong Westminster does not equate to breaking up England. England will still exist, but as a more democratic country.
September 22, 2014
Agree – if proper devolution occurs, each country would have freedom to raise taxes and spend at will, with a certain amount per country being sent directly to the UK Govt to allow it to conduct whatever business it has to conduct (Defence, Transport, Civil Service, FCO, etc). This is how the EU is financed, and they seem to have plenty of cash!! No reason why it shouldn’t work in the UK on a similar basis.
To that end, as Christine says, the Barnett Formula would be irrelevant because Scotland could raise whatever it wanted from its own population.
I have to say I was never particularly irked about the BF until my daughter accrued around £37000 of debt before she even started university!!
September 22, 2014
“The English have had to suffer Labour governments in the full knowledge that most of England has rejected Labour…”
Since 1945, how many Labour governments have failed to win a majority in England (and conversely, how many Conservative governments have failed to win a majority in Scotland and Wales)? Your sense of victimhood simply isn’t supported by the facts…
September 22, 2014
I thought the whole point of this extra devolution exercise was to lower Scotland’s dependence on the rest of the UK and vice-versa. Surely that is what devo-max (and certainly independence as pushed by the SNP) are all about? They keep the Pound (the largest unknown), they keep the Union link, they keep the bank guarantees, they keep the Bank of England, but they need to be self-funding, and if the sums don’t add up for them, tough. That is what they VOTED for.
September 22, 2014
I voted NO to the partition of Britain.
September 22, 2014
Apparently only because your compatriot Brown bribed you with our money….
September 22, 2014
The price of everything and the value of nothing springs to mind.
September 22, 2014
I think it is a good idea now to devolve ALL possible fiscal and economic matters to Scotland (those permitted by the EU of course) so they can set their own business rates and income tax and benefits. They can adjust those as they wish to attract businesses and residents to move to Scotland if they view the conditions there as more attractive, the remainder of the UK would then have to compete for skills and business against them – a market-based solution.
September 22, 2014
JR, I respect that you have a greater understanding of Barnett than I. But today i have to disagree with you. If it’s time for Scotland to have Devo max, max, max? Then it’s time for Barnett to end.
September 22, 2014
You have (as usual) captured the key point: “the per capita value of the base budget has gone up compared to England”. Trumpet that. And press the inequity. Scots blithely talk about greater need for rural communities etc. But that’s largely throwing sand in English eyes.
But an assessment of “need” would lead to political pressure to increase spending overall. Dangerous unless the public coffers are overflowing. Hence The Treasury have defended Barnett. (I was there for 3 years in the 80s and saw how the “Barnett formula” kept the lid on that slops bucket.)
Solution? Wait until the oil runs out and then see if the Scots fancy going alone.
September 22, 2014
The real problem is the fact that the UK is being broken up. If we still believed in just one country with a parliament that actually worked efficiently and fairly, we would not need referenda. Referenda in the past have been used by dictators to enforce their will.
If parliament was still the place where issues like this were thrashed out, then that would make it all much fairer.
When Mr Cameron appeared outside his Presidential White House and gave out how he felt about the results from his Presidential Lectern, it might have been better done in Parliament? -Oh I forgot, it isn’t sitting. But – hey – who cares?
Scotland will really suffer if it turns to a rust belt socialism with really high taxes and very little to show for it. I do not see why we should pay for that. Do you?
September 22, 2014
Yes Mike you seem to be one of the few people who can see beyond the end of his nose. The UK is being broken up. You can’t put a price on that.
September 22, 2014
No, Mr Redwood, softening us up I see, and the meeting hasn’t taken place yet as far as I know. Maybe it was last evening. Why did you write this, and only on this? I don’t buy it, playing it down so when we are forced to accept it may not seem so bad. A trick. Have you switched to party before principle again or have you always supported the Barnett Formula? Maybe you have but I had thought not. Puzzling. Good try, but more than disappointing that for all your fine talk it seems that you have been told by the leadership what you will and will not agree to and England will take second place and be humiliated by the Scots (again). Even Joel Barnett has said his formula is past its usefulness. Withering on the vine still give the Scots a propaganda victory. All seems like weak leadership on England’s side to me.
It appears Scotland is likely to get what it wants in other areas and England will be left in the lurch again. I’ve said it before and I’ll say it again, you cannot trust the British and Unionists to stand up for England. The English seem to be fighting two enemies, the anti-English Scottish ‘Claim of Right’ clique (an accepted part of the British Establishment) and other British/Unionists,; there will no doubt be jobsworths among MPs lurking somewhere too.
And what about your ‘English Votes’; if MPs are not elected to serve England, if MPs do not need to get elected on a platform for England, how cannot anyone trust that they speak for England in the second-rate ‘parliament’ you champion? How can they be treated seriously? I suspect many will not treat it seriously themselves. Are we be told later that there will be a great ‘victory’ on this? A victory on something which is almost worthless. The ‘art of the possible’ may not get us anything worth having.
Reply I was not asked to write this. The fact is all 3 leaders pledged Barnett, and all previous governments have looked at it and kept Barnett. I have sought to explain it to readers, and explain that moving to fiscal devolution changes things substantially in a way I wish to see. Fight the battles you need to fight and preferably might win.
September 23, 2014
Most of the enemies of England you describe as “British” are in fact English, and I don’t assume that many of them have any deeper commitment to Britain or the United Kingdom, or indeed even to the European Union, than they have to the England which nurtured them; whichever country it may be, their concern for its future comes a long way behind their concern for their personal careers.
If you think about it, the politicians in the House of Commons have already found it necessary to share some of their previous power with politicians in Scotland, Wales and Northern Ireland, but the loss of their power which would be involved in allowing England to have the same arrangements as Scotland would be much greater than they have already suffered, about four times greater.
Moreover for the Tories especially, but also for Labour to a somewhat lesser degree, there is the threat that on all the established precedents a separately elected English Parliament would be elected by some form of proportional representation rather than by First Past The Post, so they could not even expect to be able to use the English Parliament to retain indirect but effective control over the matters which had been devolved to England.
September 22, 2014
From a cursory understanding of Barnett I feel that it’s original intent was reasonable by including the need to cover the extra costs of delivering the same value of subsidy. However I don’t understand why the basis wasn’t changed over time to reflect the changing needs of the four constituent countries, though I can guess.
More concerning though is how the formula was apparently misused. From articles I’ve been given to understand that after Labour brought in the Scottish mercenaries to increase student fees in England they then engineered the income to English universities that English students had to pay as part of the block grant calculation. If true, the outcome was that English students were directly subsidising Scottish universities and students and would also explain the financial discrimination against English students in Scotland.
This underlines the attitude of Labour to England. Far from the Brown paradise of equality and sharing of resources, Labour are anti-England and have put our young people into debt by encouraging all and sundry to go to university while stinging them for the fees, courtesy of Labour’s Browne report and a Scottish Labour boost to the vote. All to desparately preserve Labour’s critical core support in the HoC.
Scotland could have raised extra taxes itself to offset the Scottisg Graduate Endowment, instead it exploited the Barnett setup to sting England and give freebies to it’s own students. How will our government ensure the same doesn’t continue even if Scotland can implement it’s own income taxes while Barnett still applies?
September 22, 2014
Already backsliding on an English Parliament. Surprising what an invitation to the inner sanctum can do. You will be Justifying the £11 billion EU cost next. The Barnet formula should be ditched and spending equalised across the union. We should also be spared having to buy wind generation at £150 a megawatt and selling them base load at £45 when the wind doesn’t blow. Conventional power should be sold to Scotland at a premium
It looks like we’ll get shafted as usual
September 23, 2014
Don’t worry, the Tories will give England “home rule” by preventing the UK MPs elected in Scotland from voting on laws which do not apply to Scotland. I can’t say for sure of course, but it seems to me that this ridiculous “home rule” mantra being propagated in the media bears the hallmarks of Tory party HQ. I suppose it sounds better than saying that while Scotland, Wales and Northern Ireland would have their own devolved separately elected assemblies and governments England would continue to be subject to “direct rule” from London in the same way that Northern Ireland was at the height of the IRA campaign. Or saying that while those three would all be treated as legitimate components of the sovereign federal state of the United Kingdom the fourth component, England, would be treated as being no more than a very large federal territory under the rule of the federal authorities until such time as it could be split up into smaller units.
September 22, 2014
Thank you very much for the proper explanation of the Barnett formula.
What is clearly needed of course is a rebalanced base. I do not follow how incrementally replacing Barnett allocation monies with locally raised taxes in Scotland will provide a fair reallocation within any reasonable timeframe. One cheer is not enough.
September 22, 2014
” This enables Scotland to offer free tuition for Scottish students at university”
It also enables Scotland to offer free tuition to other EU National students, excepting, of course English , Welsh or NI students. Apparently it’s illegal for Scotland to discriminate against students from Dublin or Berlin – but not from Derry or Birmingham,
If we are talking about fairness then maybe someone could take a look at how both EU and UK law seem to be somehow be able to justify this.
September 22, 2014
W.r.t. to the one cheer ;
(1) Dr Redwood states “Scotland has around the same income per head”.
Wasn’t the PM’s previous view (before the three leaders cobbled the vow together) that the Barnett formula should be fully replaced by a needs based formula?
(2) Convergence of spending hasn’t happened with 30+ years of the Barnett formula, if the PM now believes that additional devolved tax raising powers will make a substantial difference then projections ought to be shown. It is one thing to qualitatively note that if the block grant reduces due to devolved tax raising then the disparities will reduce, it is another to quantitatively show the projections (and to compare to alternatives).
W.r.t. three cheers “for honouring pledges” ..
September 22, 2014
Whichever way Scotland voted one thing was for certain and that was that England would be fleeced. The only differences being the rate and the period of time.
I can understand how spending can be devolved but which tax raising powers can be granted without causing corporations and/or individuals easily taking the advantages of the lower tax regime and thus causing unintended and unsatisfactory results ?
Also, which taxes will the EU allow or not allow to be variable within the UK ?
September 22, 2014
The interview with Lord Barnett in Saturday’s Telegraph gave a most engaging picture of the ramshackle realities of politics, compared with which the antics of Jim Hacker and Sir Humphrey seem positively grave and statesmanlike. I understood the Barnett formula was nothing more nor less than the price practical politicians don’t mind paying for a quiet Scotland within the Union. If so, clearly it no longer serves its purpose. It’s the squeaky wheel that gets the oil, though, and the English tend not to be very good at squeaking.
September 22, 2014
A good article. It is also worth pointing out that because the percentage increases in Scotland will always be less than in England (due to the higher base level) over time the overall spending per head should converge to the level in England – the so called Barnett Squeeze.
September 22, 2014
Always the emphasis seems to be on ‘more spending’. Where’s this money coming from, borrowing, or taxation?
We should be looking at reducing both and focussing spending on those items that are essential in order to reduce the nation’s mountain of debt, not just the deficit. Cameron and his coalition partners have made a pig’s ear of it, but he still spins reducing the deficit by a third as some fantastic success. I’m pretty sure it’s his intention to exploit the confusion between ‘debt’ and ‘deficit’ that exists in the minds of the public, for his own political advantage.
Any household or even junior school pupil will tell us that living above ones means ultimately has a day of reckoning as the money has to be paid back, but this great economic system seems willing to embrace debt and accepts it as if huge amounts of it doesn’t really matter.
Tad Davison
Cambridge
September 22, 2014
Looking at the voting results for the Michael Moore’s private members bill on foreign aid and see that there were 166 in favour and only 7 against.
What happened to the other 477 MPs?
I suppose they were quite happy to let the bill slip through virtually unopposed.
I suppose they think that giving away borrowed money makes financial sense, while British people are queuing at food banks and fleeing abroad in search of medical treatment not available in the UK whilst being hunted down and arrested under an EU Arrest Warrant.
I cannot for the life of me understand why anyone would vote again for any of the above mentioned MPs with the exception of the 7 who voted for sanity.
September 22, 2014
You live in a world where Party leaders can make promises on behalf of their MPs and Party members without consulting them. I don’t. It’s high time that the Conservative Party reduced the power of its leaders.
September 22, 2014
The Barnett formula was not designed as a “forever more” solution ; it served its purpose a long time ago and should have been replaced . If Scotland wants to spend more per capita and has the right to decide its own income tax , then , it has the means of doing so without leaning on further “generosity” from the others in the Union . Unless “fairness” is now introduced for the whole of the Union , we might as well break it up . Why should the Scots think that they deserve more than the rest ? why should they think they are different ? why should they discriminate against those South of the border ? . The Scots I know don’t think they are different and all are hard- working successful people who have made the most of their education and opportunity ; I have always believed that this behaviour characterised the Scots – I now have a different view . Whether they like it or not , whether the Labour Party come out badly from all this does not and must not prevent a “fairness for all ” from now on .
September 22, 2014
I would like to see simple calculations that compare the public expenditure premium that arises from the Barnett formula with Scotland’s due share of the profits tax and royalties that result from North Sea oil and gas.
September 22, 2014
Andrew Neil claimed on Sunday Politics that the Barnett Formula gives Wales, with lower income per head than Scotland, lower state spending per head than Scotland.
The Barnett Formula should be dead, but the
party leadersheadless chickens decided off their own bat to continue it, making the puzzle more complicated.September 22, 2014
“The Barnett formula relates to changes in annual spending. If, for example, a given public spending item was allowed £100 million more spending next year than this in England, Scotland would be allowed £10 million more for the same spending. The English increase is multiplied by the proportion of population in Scotland to England to derive the extra amount. If some of the spending item is not devolved, then the comparability percentage is also applied, so Scotland only gets an increase for that part of the budget which is devolved. If only 50% of the extra £100m budget was devolved, Scotland would get an extra £5 million.
Given that Scotland therefore only gets the same per head increase as England, why does she end up with an advantage in the total? The main reason is the starting or base budgets in 1979 where Scotland already was allowed to spend more per head. This has been compounded by the relative decline of Scotland’s population to England. This means that the per capita value of the base budget has gone up compared to England.”
Thanks for that explanation. I’m sure that many of those calling for the Barnett formula to be abolished don’t even know what it is or how it works, beyond the end result that the figure for per capita public spending is higher in Scotland than in England. And in Wales and Northern Ireland, as well, as I understand.
My starting point would be that as far as practicable a UK citizen in any part of the UK should enjoy that level of UK public funding which will provide the same level of public services as UK citizens in all other parts. If on average it is more expensive to provide a particular public service in Scotland than it is to provide exactly the same public service in England than so be it, that should be reflected in the UK funds made available to the bodies responsible for public spending in each case. If the devolved Scottish Parliament and government wish to have more money available to spend more on public services than is required to provide the same uniform baseline level of public services across the UK then that money should be raised by taxation within Scotland.
Of course the problem now is that Cameron, Clegg and Miliband have followed Brown in promising that the present Barnett formula will be preserved, whether or not it is still an appropriate method of settling the block grant of UK funds to the Scottish government – and also to Wales and Northern Ireland – and the Scots have voted to stay in the UK on that promise which must therefore be honoured.
September 22, 2014
I don’t particularly mind subsidising other parts of the country through fiscal transfers (as a worker bee in the South East). Scotland has geographical challenges and a low population density (as do parts of England and Wales). If this means that some fiscal transfers are made due to higher costs, then I think that this is acceptable. This means some transfers to pay for sub – commercial, yet important services such as postal delivery, ferries, snow clearance etc.
What is not acceptable is that state spending in Scotland results in visible examples of better living standards than the people of England receive. Free university tuition (this also applies in Wales), free prescriptions and better old age care for the Scottish is unacceptable when this is paid for by the people of England (specifically the South East). Why should you receive free University tuition if you live in Kilmarnock but you have to pay upto £9,000 per annum if you live in Carlisle? If free University tuition and other accumulated benefits that the Scottish have received since 1998 are popular in Scotland, then they should levy the tax, in Scotland, to pay for it. The SNP, for example abolished all tolls on the bridges 2008 yet in Kent and Essex, we pay £2 per crossing (£4 per round trip) to cross at Dartford. How much of our fee (by way of transfers) is actually being used to keep the Scottish roads toll free?
Personally, I would abolish the Scottish, Welsh and Northern Irish parliaments but that is not possible. As a result, England also needs to have a say on its spending and taxation policies. It really is an affront to equity that England has no recognition or representation within the United Kingdom (beyond our UK MPs) whilst Scotland, Wales and NI all have their own parliaments as well as 18% of the MPs in the UK parliament and therefore a significant say over what happens exclusively in England (with no accountability to their constituents).
I also find Labour’s argument that “you can’t have two classes of MPs” as extraordinary. As it stands now, Westminster MPs can’t vote on Scottish, Welsh or NI devolved matters but can vote on English matters. So you could be MP for Glasgow East voting to abolish free schools in England but unable to vote the same in Scotland (where your constituents are). In this particular example, the Glasgow East MP has power and influence over people who did not elect them and yet no power or influence over the people who did elect them. It is madness and needs to be remedied!
September 23, 2014
Once the UK Parliament passed an Act saying its first line:
“There shall be a Scottish Parliament.”
and going on to divide powers between the existing UK Parliament, “reserved”, and the new Scottish Parliament, “devolved”, then it was setting the UK on the path to become a federal rather than a unitary state.
I have no fundamental objection to that, insofar as there are very successful federal states around the world and it is far better than splitting the UK into several independent sovereign states. However you cannot have a federation where three of the four components have their own devolved Parliaments and governments while the fourth is treated as if it was just a very large federal territory under the direct rule of the federal Parliament and government. Nor do the people in that fourth component wish the process of federalisation of the UK to be completed by splitting it up into smaller units just because the other three components are comparatively small. As there is clearly no political possibility of going back on the devolution which has already been granted to three of the four components of the UK the solution is obvious, and it is to complete the process by giving the fourth component of the federation its own devolved Parliament and government like the others.
September 22, 2014
I note here:
http://ukpollingreport.co.uk/blog/archives/9008
“Survation also had a poll out today and found similar levels of support for some sort of re-arrangement of the constitution for England: 65% said that Scottish MPs should by banned from voting on English laws at Westminster, 59% would support an English Parliament.”
Whether the 59% who would support an English Parliament all envisage that it would be separate from the UK Parliament, separately elected and separately housed, and it would be accompanied by a separate English government, is another matter.
I also note that the Telegraph and other media are now grossly misusing the term “home rule” to describe the highly diluted reform whereby Westminster MPs elected outside of England would no longer vote on laws which applied only to England.
September 22, 2014
Re-calculate the income inbalance between Scotland and England, but at the same time do so for Wales and NI. If as you say there is parity of income between Scotland and England then they do not need a subsidy. If Scotland desires to continue with free university education and care for the elderly then it must come from tax arising in Scotland. They would then have to take political responsibility for such a choice before their electorate.
If Wales and NI have relatively low per capita incomes to that of England and Scotland, then it is possibly those two parts of the UK that deserve a Barnett Bonus. If Barnett was designed to cover a difference in per capita income, then no difference no bonus.
Where the yes vote held sway in Scotland were the areas of dependency culture. While I believe that those disadvantaged through no fault of their own should be looked after, and better than they are at present, I consider it very bad to bank roll those who have no excuse for not controlling their own lives. This applies wherever they reside in the UK.
All other promises made by CMD and his trembling trio should be honoured. When the pattern for Scottish devolution is established, it should then be applied to Wales and NI as far as is possible. Having done this there is absolutely no reason for Scottish, Welsh or NI . MPs to vote in the H o C on anything other that UK business. If Milliband wavers on this principal then the English electorate will punish him. As I have said previously I see no reason why the May 2015 election should not be confined to English constituencies only. The three other parts of the UK have more than enough MPs in their own parliaments to visit Westminster for debates on UK affaires.
September 22, 2014
All the ideas and comments being put forward and the ‘conversations’ at Chequers assume that the outcome must be devolution of powers.
Who says so? And why are Wales and Northern Ireland so infrequently mentioned?
When things don’t work properly because of bad management, it repairs nothing to insist that power be passed to another set of incompetent managers, in larger numbers than before. What evidence is there to show that local government is more efficient than National Government. Rotherham? Tower Hamlets?
It is not the act of government which is causing the problem, it is the people who are applying it.
Many of the calls for devolution arise because those who govern the nation are doing it so badly, not serving the nation’s true interests, but pressing for change for ideological reasons or personal interests.
Apart from the centres of republicanism and Marxist thought, the majority of people in Scotland, even on the ridiculous basis chosen by the SNP, voted to remain part of the United Kingdom. Had real Scots been allowed to vote, the majority would have been even larger.
The calls for devolution are cries of despair from some who see Great Britain descending to third world status and cries of triumph from those who see the destruction of the nation state as their whole aim and purpose.
Do not listen! When opportunity comes, take away the licences from those who have proved that they cannot drive.
John Wrake.
September 23, 2014
The calls for devolution and then for independence have arisen primarily because over the decades the blue on the electoral map of the UK has receded from the peripheries of the country and a corresponding dissatisfaction with government from London has built up whenever that party has gained control of the UK Parliament mainly by virtue of its support in the south east corner of the island, so much so that for many people in those areas their dissatisfaction is now almost instinctive. It will take some decades of less geographically divisive policies from that party for it to regain a reasonable level of popularity in those peripheral areas, even if that is possible which it may well not be.
September 22, 2014
Earlier, I had seen the Barnett formula explained thus – “The English account for 85 per cent of the Union, the Scots 10 per cent. What’s 10 divided by 85 as a percentage? 11.76. That’ll do. They can have that.” (by the Daily Telegraph’s Dan Hodges on 16 September).
http://blogs.telegraph.co.uk/news/danhodges/100286555/the-english-want-scotland-to-remain-part-of-the-union-but-not-at-any-price/
Are you able to confirm that was quite wrong please?
September 22, 2014
Dan Hodges doesn’t understand how it works.
If England accounts for 85% of the population and Scotland 10% then any increase in English total departmental expenditure will cause an increase in Scottish public expenditure by E*10/85 where E= English public expenditure. This equals 11.76% of English public expenditure but 10% of total UK public expenditure . This is where Hodges makes his mistake. He’s confusing English public spending with total UK public spending.
It’s also important point to realise is that the Barnett formula applies only to changes in public expenditure, not to absolute public expenditure.
September 22, 2014
John – just so long as we resist the temptation to “Balkanise” England. We are a unified sovereign nation. Having ~80% of the economic clout! this poses problems for sure – but the answer is not to force us to split up. The Scottish nationalist sentiment awakens a greater sense nationhood in the English. So be it…..
September 22, 2014
“The 3 leaders have made two promises ” – -Cameron’s magic word – -the “p” word -seems to be in regular use. Personally I wouldn’t believe him if he said the sun was going to come up tomorrow. But now he’s got the other two doing it as well.
September 22, 2014
The worst areas are Glasgow, North Lanarkshire, West Dunbartonshire and Dundee which all returned a YES majority. These are all strongly republican zones clearly identified in the referendum and the Left have not given up. Single out these areas and punish them for trying to destroy our nation.
As for having ‘success in levying taxes on its own taxpayers’ I can’t think of a better way to drive the best people out of Scotland.
September 22, 2014
Max
The best way to ‘punish these people’, as you put it, is to put them on the path to ‘aspiration’. When these people have jobs, new cars, mortgages and nice things, someone telling them that it is; “all theft” and they should give more through their taxes, somehow does not sound as good.
People change, when their personal circumstances change. That is why I believe the Socialists like to keep the people down.
September 22, 2014
The Herald and Sunday Herald did their best to destroy the Union with their strong support for the SNP. These are newspapers published for the middle classes, those who have already achieved material aspirations. The middle class in the west of Scotland has changed and that can be seen in the voting history, and corresponding decline, of the Conservative Party. Have these papers led or followed these people?
September 23, 2014
So would you “punish” all those in Glasgow who voted “no” along with those who voted “yes”?
September 23, 2014
Place further orders for ships with the yards at Govan and Scotstoun on an accelerated programme of naval construction.
Demolish the hideous multi-storey 1960s Wyndford Estate in Maryhill (Glasgow) which has been used as a receptacle for asylum seekers in recent years and re-build the army barracks that were originally there. The old walls enclosing the barracks still exist and they are a fine example of stonemasonry. This would create employment in the local area and help to deter those who may consider the subversion of our nation in future. Punishment enough?
September 22, 2014
What was that – “calm down dear”…
Your explanation of Barnett seems to make sense, but still needs somebody on our English side to make sure that what you describe happens and all of the Union gets reasonable equality for the future.
I still don’t like this “we couldn’t keep our pledges because…” and will still remind any Libdem that arrives at my doorstep of their failure over tuition fees…
September 22, 2014
I mentioned in an earlier post that red pens with the exact slogan ‘End Tory Rule – YES’ were found at the referendum count in Glasgow.
In no way would I wish to cast doubt on the integrity of the officials at the count because proceedings were conducted very professionally and impartially. These pens were found on a table outwith the area of the count to the right of the foyer in a café area which is in the Emirates Arena.
September 22, 2014
Very difficult to see how this is going to work. Scotland raises its own income tax and this impacts on the block grant how? The Treasury loses the revenue so does it reduce the block grant by the same amount? If so, from a Scottish perspective, what is the point? If not who decides on how the tax should impact on the block grant and who will agree it? Forgive me, but it looks as though the financial arrangements between the rest of the UK and Scotland will become so obfuscated that no one outside the Treasury (and possibly no one in it) will really know what fiscal transfers are taking place and with what justification.
The real problem with Barnet though is that it is the alibi for most Scots votes on English laws. It is not clear to me how (or whether) that will be overcome.
Are we being softened up for the long grass? I don’t know, but I fear so.
September 22, 2014
the kiss of death for markets coming up, less there is a change
September 22, 2014
I read in the Telegraph this lunch time that “Labour has 40 Scottish MPs and would be left with the possibility of being unable to secure a parliamentary majority on English issues such as the Budget if they are banned from taking part in votes. ”
I thought hold on a minute, the budget isn’t just an English budget its a nationwide budget for all four countries within the United Kingdom, all the devolved regions can do is make changes on the edges of the main budget therefore if the 40 Scottish MPs can’t vote on the English part of the devolved items so what? The devolved councils should also be funded out of the budgets of each of the other four Countries too, how did a Labour government get away with this in 1997 in the first place perhaps because I feel it wasn’t explained to the English that’s why or provide me the news articles about the unfairness of this in the Labour party manifesto to the English.
September 22, 2014
Dear Mr Redwood: You write that “new taxes for Scotland make a big change to the bloc grant”. How true. And one of them would be that the income taxes of English, Welsh and Northern Ireland families could not be used to finance the residual bloc grant or for common UK purposes such as defence, foreign aid, EU contributions or National Debt service. That would be both unfair and politically indefensible.
Hypothecating taxes is bad: money is money wherever it comes from and tying one source of income to one source of spending causes all sorts of rigidities and complications, as well as undermining our international credit rating. But if the biggest, most central tax is devolved to Scotland, not paid into the Exchequer, then EWNI income tax would have to be hypothecated, unravelling the Exchequer system. The same would apply, albeit a bit less drastically, if there were a new Union income tax, as the Labour policy implies.
Why did the Coalition specifically offer to devolve income tax to the Scottish Government? The only reason I can think of is that Scotland has a 3 per cent up or down option under the previous Devo(not quite)Max. But this power has not been used, suggesting that it is too politically dangerous and the Scottish Government would prefer something less symbolic.
Devolving income tax is a far bigger, nastier can of worms than the Barnett formula.
September 22, 2014
I note that Martin Gilbert, CEO of Aberdeen Asset Management, argues in this week’s Sunday Times Business Section that devolving income tax “misses the point” and that it would be much more useful for the Scottish economy to be able to vary National Insurance Contributions and Corporation Tax.
September 22, 2014
It is my understanding that the inequalities produced by the Barnett formula were over time to tend to zero with inflation and other factors. Particularly, the increase in “identifiable expenditures” of the home nations should have lead to less inequality through the process of devolution, as “non-identifiable expenditures” are reduced as a proportion. It seems that this has not been the case. Without further information, I do not see how allocating further devolution to Scotland would remedy this position, and in fact may possibly make it worse. I think proper worked examples are required in order to understand the position.
September 22, 2014
Oh it all seems so complicated for a little island of people to have ever thought to devise. Surely such realms as the United States do not have all these interstate regulations and formulae?; if so, I feel they would use “formulas” for the latter. Anything to get rid of the bumf and dross. Just as businesses, cannot function properly with over-regulation.
With an eye to the future with reworkings of Barnett and, devo max which sounds like a fizzy pop with triple caffeine than something fit for adult political debate, we seem to be passing into a kingdom where one might legitimately expect bye and bye to come across a grazing unicorn.
It might have been better had the YES Campaign won a resounding victory. Then the Scots could have contemplated their navels and naval yards leaving the rest of us in utter peace.