Wednesday, September 10, 2008

The Barnett Formula: Time For It To Go

Today sees the publication of one of the most important pieces of research the Taxpayers Alliance has ever carried out. Titled UNEQUAL SHARES it examines the vexed question of the Barnett formula, the convention which governs the share of public expenditure Scotland receives. It is very timely because both the Government and the Conservatives are examining its future. Written by Mike Denham, who is behind the excellent Burning Our Money blog and is a former Treasury economist, the research reveals...

  • Identifiable public spending per head in England is £7,535 pa (2007-08). But in Scotland it is 22 per cent (£1,644) higher, Wales 14 per cent (£1,042) higher, and Northern Ireland an extraordinary 30 per cent (£2,254) higher.
  • Just over the last two decades (since 1985-86), higher spending in the three devolved territories has cost UK taxpayers a cumulative £200 billion (£102 billion in Scotland; £43 billion in Wales; £57 billion in Northern Ireland).
  • North Sea Oil has not funded the Scottish spending gap, despite Scottish Nationalist claims to the contrary. In only five of the last 23 years have North Sea Oil receipts exceeded the cost of higher funding paid to Scotland. Even with current high oil prices, the income from the Scottish share of North Sea Oil only just covers the spending gap, and North Sea Oil output is projected to fall by 50 per cent by 2020.
One of the reports most interesting findings blows a hole in the SNP argument that North Sea Oil revenues always exceed what Scotland gets from the Treasury.


So in only five of the last 23 years has North Sea Revenue exceeded the Scottish grant from the Treasury.

But the biggest scandal is the way the Barnett Formula actually works. It's not based on the needs of Scotland or Wales or Northern Ireland. It is calculated according to what is spent. So if the government spends £1 billion on a capital project in London, Scotland automatically receives £150 million, whether it needs it or not. It does not work the other way around though. Crazy.

Denham concludes...
English taxpayers want an end to subsidising Scotland, and the Scottish Government wants financial control devolved to Holyrood, so now is the ideal time to consign the Barnett Formula to history.

Hear hear to that. Even Lord Barnett himself now considers his own formula an anachronism. Yet the trouble is that neither Labour nor the Tories will have the guts to do what their brains must tell them is the right thing to do. If Brown announced the abolition of the formula he would be doing just what Alex Salmond wants him to do, and consign even more Labour MPs to defeat at the next election in Scotland. ConservativeHome outlines four reasons why David Cameron will also tread carefully in this political minefield.

So sadly, it is unlikely we will see a complete end to the arrangement by which £200 billion of English taxpayers' money has gone to Scotland, Northern Ireland and Wales over the last twenty years. Instead, there will probably be some minor tinkering. It may be better than nothing, but the lack of action to tackle a problem which everyone recognises exists is further evidence of a lack of radicalism among our political leaders.

Read the fill report HERE.

UPDATE: Mike Denham responds to the points made in the Comments HERE.

84 comments:

Anonymous said...

To coin a phrase beloved of Roy Keane 'Stick it up your bollox..'

If this Barnett Formula is so 'unequal' how come parts of Wales are so poor that they qualify for 'Objective One' funding from the EU designed to bridge huge inequalities in income ??

Yet more facile, superficial crap from the rich-man's-friend 'The Taxpayers Alliance'.

Anonymous said...

oh here we go
what ius the gap between what the UK raises and spends.
or Norway or Ireland -- go and find out

course the Barnett Formula does not work the other way cos Scotland is only given pocket money

hence indpendence is on the way Scots cannot no longer stomach the scrounger lies with those of a massive and gwoing national debt at westminster

ur about to borrow over FORTY billion this year alone - the UK is knackered

Anonymous said...

this is also just reheated GERS stuff

it only talks about identifiable spending doh doh doh


TPA -- must do better

ask those boffins at Oxford economics :-)

Letters From A Tory said...

Tinkering is indeed the most likely result. I wonder how the Scottish Conservatives would fare as well, should Cameron pursue reform of the formula either side of the next election.

Anonymous said...

have the Tax Payers Aliiance got the logical courage of their convictions??

will they call for the end of the Union -- or are they yellow moaning cowards :-)

Scary Biscuits said...

Why start the account from when oil was discovered? Surely it should go back the the Act of Settlement.

Also, why count just oil? If we're going to pay for "Scotland's" oil, then surely they should pay for our coal and steel, the benefits and the subsidies that went towards keeping their little Scotch grandmothers warm in winter.

Anonymous said...

Does the formula take into consideration the tax and national insurance contributions from the Welsh Scottish and Northern Irish natives who live and contribute to the English economy?

graemeh said...

I notice the £200 billion is UK taxpayers money at the start and then English taxpayers money at the end. Also the report, if your statement is correct, is for "identifiable" spending. A very large chunk of goverment spending is outside this category and most of that is spent in the South of England.
Finally, the Barnett formula was designed to narrow the spending difference between the different parts of the UK but was never used correctly by either party. It should be replaced by a needs based formula but one that compels politicians to narrow gap by raising each areas performance. Not, as at present, for more welfare handouts which create a salary vote.

a refugee from Scotland said...

Thanks for the graph.Whenever I moan about the differential spending per head between Scotland & England, my SNP inclined, "chip on the shoulder about the English" sister trots out the oil revenue line..." I can't wait for our next discussion now.

Anonymous said...

"Identifiable public spending per head"

This is the key to it all because nearly all unidentified spending (a vast sum) is in London and the home counties i.e. budget of the Foreign Office, the Jubilee Line, the millennium dome, general maintenance of government such as tax collection, registration of the population and contributions to the European Communities (all based in SE England) etc

Oh and these figures almost always attribute the entire cost of Trident to Scotland, we don't want to host the UK's WMDs nor do we want to pay for them neither do a majority of Scottish MPs, MSPs or the scottish people.

Anonymous said...

http://www.independent.co.uk/news/uk/this-britain/how-black-gold-was-hijacked-north-sea-oil-and-the-betrayal-of-scotland-518697.html

read this and see why Scots are pissed off.

SNP presser below

TPA CLAIMS ‘FALLACY’ SAYS HOSIE

In response to a report published by the Taxpayers Alliance which suggests that, as a consequence of the highly contentious Barnett Formula, Scotland is better funded than England, SNP Treasury Spokesman Stewart Hosie MP said:

"The idea that Scotland sponges of the rest of the UK is an absolute fallacy.

“Look at the statistics: the latest GERS report show that Scotland is in a much stronger financial position than the UK as a whole. The UK Government has a deficit of £40 billion while Scotland’s current budget surplus is over £800 million. Consequently, the flow of resources from Scotland to the rest of the UK is some £1.2 billion.

“A recent report by accountancy firm Grant Thornton suggested that if Scotland had control of oil revenues, the Scottish budget surplus would stand in the region of £4.4 billion but these revenues are diverted to Westminster to fill the Chancellor’s black hole.

“An independent Scotland would have control of these revenues. They would not be used to prop up the flawed policies of another government but to make policy which would directly benefit the people of Scotland and help Scotland realise its full potential.

“Until then, it is clear that the UK Government is struggling to manage its own finances and control of Scotland’s budget should be given to the Scottish Parliament.”

Richard Thomson said...

First, I agree that Barnett should go. I'll go through the TPA report with my magnifying glass later, but the first signs are that the figures highlighted here are bunk.

Just over the last two decades (since 1985-86), higher spending in the three devolved territories has cost UK taxpayers a cumulative £200 billion (£102 billion in Scotland; £43 billion in Wales; £57billion in Northern Ireland)

This is a rubbish argument, because it is based on spending and excludes revenues. London is the biggest single contributor to the UK pot, but receives a level of spend per head pretty well in line with Scotland. On this basis, the TPA might as well complain that the East Midlands and South West with their low levels of public spending are subsidising London, which would be tosh, I'm sure you'll agree.

It's a nice trick to try and use overall UK borrowing as representative of subsidy from English taxpayers. It won't wash though, I'm afraid.

That graph looks dodgy as all hell into the bargain. Scotland with a near £2bn surplus in 05/06 and a £2bn deficit in 07/08? Not a chance!

Anyway, as I say, I fully expect to have some fun with this later :-)

Ann said...

Barnett is on it's way out,it has outlived its usefulness but I don't envisage an end to the union, but certainly a different more federalised set up. With giving more tax varying powers to Scotland Gordon is trying to please both the scots and the english.

Will he give more tax powers to us in NI? We haven't asked neither are we ready, stalemate and more stalemate is the dish of everyday politics here. But less centralisation of tax powers doesn't equal an end to the union in my view, only a different arrangement.

We do need a little more money though, maybe when he comes to visit next week? I'll butter him a nice bit of bap....
;0

Anonymous said...

Iain, this is just nonsense. Why are you only pickign up on theoil revenue? What about Scottish NI, income tax, VAT etc etc. Once you include that then you see a very different set of figures. Once you include all of Scotland's tax take you will find that Scotland is in surplus, and indeed subsidising the rest of the UK.

Anonymous said...

Anon.9.29AM

The whole of Cornwall and Scilly Isles is designated Objective One status reflecting how poor this part of the UK is. In fact it's one of the poorest regions in the EU on a par with such places as Slovakia.

Adam said...

"Does the formula take into consideration the tax and national insurance contributions from the Welsh Scottish and Northern Irish natives who live and contribute to the English economy?"

How about the reality that even if all nations in the Union received equal funding, as this report projects, Scotland would still be receiving a massive subsidy, based upon how much it actually pays in to the pot.

Dominic Allkins said...

Personal view: the Barnett Formula should be scrapped. If those north of the border want independence then let them have it.

And a question: why is that those criticising the report remain anonymous? Something to hide?

geomannie said...

Tell you what, the UK government should move to Scotland and England can have the Barnett settlement. That would be fair, after all its been in London for a long time now. The hidden subsidy associated with seat of government would then flow northwards, amply making up for any loss of Barnett. Who could argue against?

Anonymous said...

This is utter twaddle-it is WELL known that the rest of the UK is subsisising the SE of eng and has been for decades!

Anyway, when Scotland achieves independence very soon, we shall(being the most generous of nations) contribute some of our oil wealth in supporting the poor and defenceless down south-which is what you saddos will be very soon-as long as you let Mr Bean continue his scorched earth policies towards you lot!

Serves you right for electing his mob 3 TIMES IN A ROW!

Anonymous said...

If this Barnett Formula is so 'unequal' how come parts of Wales are so poor that they qualify for 'Objective One' funding from the EU designed to bridge huge inequalities in income

because Wales produces f***-all? I love Welsh nationalists. I wait eagerly for the day that we grant them full independence and watch them go "oh, er, well, we weren't actually serious, isn't it? Can we come back in now?"

Richard Havers said...

The sad thing about all this is that it plays straight into the hands of the SNP. Iain, we need to be careful what you wish for.

Anonymous said...

Sad to see Iain Dale sympathise with the vindictive anti scottish sentiment that corrodes ConHome.

What about the per capita public expenditure in London - which is the highest in the UK.

Leave it out.

Tom FD said...

I think there is surely a way around the political minefield, using the right sort of words, just as David Cameron did by linking immigration with availability of public services. Eg the extra spending is unnecessary and patronising. Well it could certainly save Labour some English seats, their brand is already toxic in Scotland so it's not like it would make any difference...

Hitchy said...

The report makes two major mistakes: firstly, it only looks at 'identifiable' public spending. Secodly, it doesn't examine how public spending compares to the tax take from each egion.

Taking the latter point first: analysis by Oxford Economics shows that Scotland is second most productive region in he UK, per capita, after London. Per capita public spending in Scotland is roughly equivalent to the per capita tax take. In fact, the regins with low per capita public spending tend to be hte most unproductive regions - the South West of England, for example, has the lowest per capita tax take and the lowest per capita spend. Seems fair to me.

Also: around 20-30% of UK public spending is supposedly 'unidentifiable' - i.e. can't be attributed to one specific part of the UK. But this 'unidentifiable' spending includes, for example, the running of the justice system in England and Wales. So for some reason, the operation of the Scottish justie system is regarding as a Scottish expene, but the English justice system is regarded as a UK expense.

There are other anomalies in this - but we don't know how much because the Treasury never tells us exactly what falls into 'unidentifiable' public spending. One might suspect they're trying to fiddle the figures...

Trumpeter Lanfried said...

The sums paid to Northern Ireland are particularly shocking. Terrorists, such as those now in government, should not have the proceeds of their bank robberies topped up by the taxpayer.

Anonymous said...

So this means that Scotland will get a findfall of £ 2.4 billion as a result of London getting Crossrail.

Anonymous said...

£ngland must rid itself of the McBarnet formula AND the Scotch EU Region!.

Chris and Maria and Drew and Debs said...

Anonymous said:

"Does the formula take into consideration the tax and national insurance contributions from the Welsh Scottish and Northern Irish natives who live and contribute to the English economy?"

What a strange comment! By that reckoning, Scots, Welsh and Northern Irish economies should take account of the contribution made by English residents!

And, as many people in Scotland, Wales, Northern Ireland and England are of mixed origins it's even more bizarre! If you opt to live in England then you opt to live in England. Scotland. Or Wales. Or Northern Ireland.

There is desperation in the quoted comment! And a strange inference that the Scots, Welsh and Northern Irish are a different race to the English.

As the Anglo Saxon/Celt thing is pure myth, this does not seem very healthy at all.

If you live in a country, then you contribute to its financing - that financing is not sent "back home" whilst you live in your new country scot free.

Chris and Maria and Drew and Debs said...

Something else which needs to be taken into account is the Continental Shelf Act of the late 1960s. At this time, the UK Government allocated formerly English waters (and oil) to a "Scottish Sector" - this was done without consulting the electorate in England, on the understanding that any revenue would be equally shared anyway as this was the "UK".

In the UK, such things were suposed to be shared, it wasn't a case of "What's mine is mine, and when it suits me what's yours is also mine."

In the current day, the Continental Shelf needs looking at - and England needs to be given back what is rightfully its property.

gadgie said...
This comment has been removed by a blog administrator.
john miller said...

Personally, I am not too concerned about the Barnett question. It's the West Lothian question that gets me.

Let our fellow Britons get the money - God knows some places in Wales especially need it - but don't let the Scots MPS vote on English matters. That is the true iniquity.

tally said...

A few years ago, any one but England Neil Kinnock, warned of a dangerous and lethal English Nationalism. I'm pleased to say it has arrived.

Jess The Dog said...

I’m not convinced by this 20 page document. Barnett isn’t working, but there is a wider issue with UK fiscal policy and taxation mechanisms. Too much is gathered and spent by the Treasury, and this diminishes local accountability and contributes to a bloated and centralised bureaucracy including the ridiculous tax credits system. Not enough is gathered locally, and the council tax is fundamentally flawed and universally disliked. Revenues should be gathered at the level they are spent although there needs to be an element of redistribution from economic centres to the wider economy (instead of England to Scotland, read London to Scotland, London to the North of England, or even Edinburgh to Scotland).

- Slash income tax radically in proportion to regional spending.

- Introduce a regional tax, possibly an income or asset tax.

- Scrap the council tax and replace it with a local service and/or goods tax. For “service tax” read poll tax.

- VAT – not sure if there is much we can do about this, given EU dimension. It should only be applied to non-food retail goods with exceptions (books, medicines and childrens clothing and supplies) and not to services or supplies (ie utilities). This should be a straightforward goods tax that can be varied in line with local and economic conditions.

- Devolve corporation tax and similar taxes – this could stimulate regional economic dynamics, as one of the complaints about the north-south divide is the lack of investment and employment opportunities. If Scotland and Wales (and the North of England) made it worth their while by cutting tax, companies would relocate. This cuts out the whole regeneration and economic development quango nonsense, as well. I believe these powers were not devoled precisely because of this "fear".

The SNP (possibly with the Lib Dems on board) are currently the only party looking seriously at taxation even if their local income tax policy has attracted criticism.

Wrinkled Weasel said...

"So this means that Scotland will get a windfall of £ 2.4 billion as a result of London getting Crossrail."
says Anon.

Crossrail sprung to my mind too.

Your favourite Labour blogger, Tom (Captain Kirk) Harris was trumpeting his involvement in Crossrail, but very quiet about the fact that it has nothing whatsoever to do with anybody north of Watford, especially as there is no mainline northern interchange.

Harris is also very quiet about the doomed Nightstar project, cancelled by Labour, that would have extended Eurostar as far North as Glasgow.

Not only that, Scotland will lose its Council Tax subsidy when it is replaced by local income tax, unlike a lot of highly favoured Labour dominated councils.

To be honest, Iain, you are better off doing what I do and try not to get involved in convoluted economics. The word "ultracrepidarian" springs to mind.

Anonymous said...

but don't let the Scots MPS vote on English matters. That is the true iniquity."

John-the SNP (who ARE the Scottish Govt) do NOT vote on english matters!

Only the 3 other parties do!

Get your facts right and perhaps you will be worth listening to!

Ann said...

I completely disagree. I also think that the figures do not adequately reflect the contribution that Scottish industries like Tourism and Whisky make to the UK economy.

It is also important to look at the logistical problems that a geographical territory like Scotland presents. Communication between isolated communities is often difficult and can only be effected by subsidised ferry services like Calmac. The alternative would be the depopulation of most of the Scottish Islands, and peninsulas like Knoydart

However, even if the figures are accurate as an English taxpayer, born and bred in England with only microscopic amounts of Scottish blood and slightly more Welsh, I think the Barnett formula is a price worth paying to keep the Union.

We cannot claim to be the party of the Union and then moan because certain areas facing geographical and social problems are correctly provided with more government resources than other more affluent and more easily accessible geographical areas.

There are also English regions, such as the North East, which I would guess gets just as much, if not more per capita than the Scots.

In short this article is the worst example of Conservative South East bias I have read for a long time. I suggest you spend more time outside the M25 corridor - Watford might be a start. A trip to Scotland to actually see conditions there might before you spout drivel about the place might be even better.

PS This article makes me even happier that Sunderland managed to sign West Ham's two best players. Ringo was aver the moon to come back North to civilisation. Enjoy the Championship next season.

Linders said...

One could rewrite much of that post and replace "England" with (for example) "Surrey" and "Scotland" with (say) "Newham" and it would still mostly make sense. Yes, the formula needs reform but to break it down simply to "x subsiding y" isn't doing the issue justice. Richer areas have subsidised poorer areas since the year dot and will continue to do so.

Scotland will be a net beneficiary regardless of the formula, and no-one is calling for independence for Newham and Tower Hamlets because they get heavily subsidised by Surrey and Buckinghamshire.

Man in a Shed said...

Some people bribe their children to love them, but they always justify end up seeing Mum & Dad as cash dispenser and have no respect for them (indeed they may secretly despise their spinelessness).

Its the same with the Union. The Scots, Welsh and Irish are anything but grateful.

In the end this will destroy the Union - as it destroys respect and self respect.

Anon- 9:29am - the answer is easy to your question. Because government policy has attempted to keep people living in locations where the reason for them being there has ended. Its not like enough money hasn't been thrown at that problem. Indeed the problem has become the subsidy ...

Anonymous said...

A whole lot of sense here, along with some awful anti-celtic-fringe prejudice. What about the years of under-investment in infrastructure ouotisde the major metropolitan areas in England


"And a strange inference that the Scots, Welsh and Northern Irish are a different race to the English." - oh but we are, why else in the 6 nations rugby do we not mind too much who wins, as long as the English get beaten

Broon's Talking Bawgie said...

Ooh, the Scotch trolls are out in force!

"Frit! Frit! Frit!"

Ian McKellar said...

Ian Lang identified the problem when he was Secretary of State in the early 90s. If you say compare Scotland with areas with a similar economic profile such as the North East of England or South Wales, then the grant is not that dissimilar.
Bearing in mind that such moneys passed over are for the Scottish government to spend, it is a reasonable question to say that a grant the benefits the Greater Edinburgh Co-Prosperity Sphere or indeed Aberdeen (areas with comparable standards of living to the South of England)and gives them equality with Glasgow and Larnarkshire (which certainly don't) as well as parts of the Highlands and Islands must be questioned.

At the same time geography and weather imposes special needs on an area. To take an example the building regulations were slightly tougher in Scotland that England. Higher annual rainfall, lower averege winter temperatures etc but these have cost implications. Ditto with road maintainance in terms of sanding and gritting.

In terms of human conditions, we are all aware of the fact thet life expectancy in parts Glasgow East was lower than Baghdad. Indeed I used to remark that the decision to elevate the town I sas born in to city status in 2002 lowered mylife expaectancy to four years since statistics showed that was the difference between being born in a Scottish town as opposed to a Scottish city.

In effect Barnett is a blunt instrument which seems to take a scatter-gun approach and should be replaced by something better.Maybe even let the Scots Government raise its own taxation.

marches resident said...

As I understand it,the contribution per head for Wales is on a par with the contribution per head for North East England,which is the closest region in terms of economy and prosperity.

So in theory ,ditching the formula ought not to make a substancial difference.

Anonymous said...

Here we go again.
I'm a Derbyshire man exiled to the North East - AND an Ex Local Government man. (or should this now be "person" Eeek I AM a man!!!!)

Barnett DID produce a fair formula for the time. That time has passed and even Barnett says so.
Scotland, Wales and NI HAVE received MORE than their "dues" under the Barnett formula but so have many English regions.

To STOP this then LONDON would need to become a separate State - at which point everything would go tits up even for the City.
(and hey I HAVE worked in the City and the highest earning are ***** with little real ability)

The UK IS the UK. Salmond NEEDS to consider that Separation will NOT improve Scotland's lot.
There WOULD be a distinct possibility that the "rump" (in fact the MAJORITY of the UK) would choose to leave the EU.
The EU might , just, choose to reject Scotland!!!

Personally I am PROUD of the Scots and their regiments - and I AM an Englishman. I rather think that the majority of Scots think similarly.
United we stand, divided we fall.
Bring it on Alex. You MAY get a surprise.

Anonymous said...

The voting box does not work, especially when it is designed to work AGAINST democracy.
I hate the British in Westminster. I am disgusted to the very core, with the treatment meted out to our fellow citizens in England.
The Auld Enemy Mentality rules the three main parties.
Do they really think we beg for equality forever? When we stop asking, that's when they need to be VERY worried.

Anonymous said...

The SNP HAVE voted on English only matters, from top up fees, to Raltrack - check your facts.
SNP supporters are lying. Even the SNP don't deny voting on these issues.

Broon's Talking Bawgie said...

@ ann -

I also think that the figures do not adequately reflect the contribution that Scottish industries like Tourism and Whisky make to the UK economy.

Get real. The Scottish "economy" is around 60% state-funded. If you looked at the amount of tax contributed versus given back in spending, Scotland's contribution is less than nil.

We cannot claim to be the party of the Union and then moan because certain areas facing geographical and social problems are correctly provided with more government resources

Have you considered that perhaps those areas "facing...social problems" are poor exactly because they "are correctly provided with more government resources"? They are sucking on the welfare tit because they can. If they couldn't, they wouldn't. They'd be happier in the end, though not at first.

There are also English regions, such as the North East, which I would guess gets just as much, if not more per capita than the Scots.

You'd guess wrong. The north-east gets more than other regions of England, but less than Scotland.

In short this article is the worst example of Conservative South East bias I have read for a long time.

As man in a shed has already pointed out, you're anything but grateful for the money we give you. So we should just stop. How much more ungrateful can you get, and why should we care anyway?

Anonymous said...

My God! You think the stuff the Taxpayers Alliance churns out is "research"?

The TPA, and its fellow Thatcherite obsessives, will always churn out anything that points towards its favourite bugbear - ie. "The Daily Mail reading well-to-do middle classes should get tax breaks to fund that third holiday and that new car every year, and stuff the poor. Dismantle the welfare state so we petty bourgeois can have more cash."

Remember what they say about the love of money is. If anything it's not the route to winning an election in a country that is inherently a fair and decent one, not a greedy one.

Blue Eyes said...

Sorry if this has been said before, but why does Cameron now appear (according to ConHome) to be running away from reform? He is not going to get any seats in Scotland so instead of being "nice" why can't he be "right"?

Anonymous said...

gadgie - you must have used a whole tube of K-Y Jelly to squeeze that in, you saucy minx...

Anonymous said...

The map on the front of the book distorts GB, much as does the BBC's weather map.

Check the east to west dimension along the south of England, from Cornwall to Kent. This is the length of Scotland from north to south. Both the Barnett book and the BBC show the north-south dimension of Scotland AND England being smaller than Cornwall to Kent.
A subtle way of diminishing Britain north of Birmingham.

So remember, Cornwall to Kent equals Scotland north to south.

Jim

Padougy said...

Make sure you get your words right, Iain. At the end you said it's costing English taxpayers £200 billion when it really should say UK taxpayers.

That little difference means the world to nationalists and separatists.

David from Ealing said...

Anyone done similar research on the relationship between Alaska and the rest of the USA?

True Brit said...

Iain, how come you are so sniffy about posting edgier comments that you don't like, yet on a subject like this (your anti-Scots hobby-horse), you're quite happy to publish racist and divisive rants, including one that uses a certain 'c' word to describe David Cameron?

Richard Dale said...

Most of the North Sea oil is English, not Scottish.

International law says that the border is continued out to sea in the same direction as it hits the coast to determine mineral rights to 200 miles, and it goes very much North East near Berwick. The Nats are lying to their own people.

Iain Dale said...

True Brit, Please draw my attention to anything racist and it will be deleted forthwith. I deleted the Cameron comment at the first opportunity. I tried to delete it from the internet cafe at the TUC (see above post), and have only been able to do it just now having arrived back home.

For the nth time I am not anti Scottish and there is nothing anti Scottish about this post. With a first name of Iain and a middle name of Campbell, give me a break.

trevorsden said...

CrossRail ??

Greater London and its immediate environs must contain some 15 million plus people. That's what, 3 times Scotland's population?

So that's not much different in comparison with say Glasgow's southern relief motorway or the Edinburgh Tram system.

We are one country so the regions of Scotland should be treated just like the regions of England (and Wales ditto) - They should al be treated the same and get what they need in due priority.

What I find strange is that Scotland's population is declining yet the government insist on building houses in crowded southern England. If central planning had any purpose then it should be encouraging housing and investment in the wide open spaces of Scotland.

Perhaps 'Anonymous' can tell us what objections he would have to that - would an independent Scotland welcome immigration from England?

tory boys never grow up said...

I am not arguing that Barnett is perfect - but the fact that your analysis of the distribution of public expenditure is made purely on the basis of geography/nationalism does really miss the point that public expenditure should be allocated according to need. Don't you Tories even read Adam Smith these days.


It is also noticeable that you fail to identify any alternative basis on which you would like to allocate public expenditure - but I suppose that is only consistent with the current Tory policy vacuum.

Anonymous said...

Sorry Iain but you are anti Scottish since you mouth the ignorant prejudices of the typical south east Tory who knows little of north of Watford Gap and nothing north of the Cumberland Gap. Citing your forenames is but an irrelevant smokescreen.

Skirt Wearing Sweaty And Proud said...

Broon's Talking Bawgie:

Get real. The Scottish "economy" is around 60% state-funded. If you looked at the amount of tax contributed versus given back in spending, Scotland's contribution is less than nil.

Wrong on both counts, bawbag. Spending in Scotland as a %age of GDP is in the low 40's. For 06/07, Scotland contributed a surplus of £0.8 billion (0.7 per cent of GDP) including an estimated geographical share of North Sea revenue.

SOURCE: http://www.scotland.gov.uk/Publications/2008/06/18170334/1

Remind me... what was the overall UK net borrowing for the same year again? £35bn or something, wasn't it?

Table C2:
http://www.hm-treasury.gov.uk/media/C/8/bud07_chapterc_288.pdf

PS: Word verification was 'GabYak'. Seems appropriate here, somehow :-)

Anonymous said...

richard dale

You've been peddling this lie for a while now. Many people have told you this is not how it works.

AD absurdam, if a small promontory at the Border just North of Berwick happened to be pointing NNE, would this mean the beaches in Aberdeen would be in "English waters"?

Danny said...

With regard to the map, it has also granted independence to the Shetland Isles - they do not appear to be part of the UK.

If the report writers cannot get simple cartography correct, I am not going to waste my time reading it.

Anonymous said...

True Brit, I didn't know "conservative" was a swear word :)

Broon's Talking Bawgie said...

Oh God, are you Scotch too? Jesus H. Christ on a bike wept.

Ann said...

To Broon's talking Bawgie

Get real. The Scottish "economy" is around
60% state-funded. If you looked at the amount
of tax contributed versus given back in spending,
Scotland's contribution is less than nil.

Rubbish you are talking income tax take,
as opposed to cash from tourism and
duty on spirits and exports of spirits.

Have you considered that perhaps
those areas "facing...social problems"
are poor exactly because they "are
correctly provided with more government
resources"? They are sucking on the welfare tit
because they can. If they couldn't, they
wouldn't. They'd be happier in the end,
though not at first.

I pointed out that a lot of the
additional spending is on infrastructure
to support isolated communities. Every time
I visit them I notice they are full of people
from the south of England trying to get
away from people like you.

You'd guess wrong. The north-east gets
more than other regions of
England, but less than Scotland.

The difference per capita is tiny

As man in a shed has already pointed out,
you're anything but grateful
for the money we give you.
So we should just stop. How much more
ungrateful can you get,
and why should we care anyway?

If you'd actually read my post
instead of just ranting you would have read that
I am English - from the North. However,
like most Northerners I have a lot more in
common with Scots than arrogant obnoxious
cockney onanists like you .Finally if you don’t
care about the union you aren’t a Conservative.
We are the Conservative and
Unionist Party.

Lola said...

The Barnett Formula. Is that like Formula 1 but with even more arcane rules?

David Lindsay said...

The North, the Midlands, the West Country and East Anglia deserve justice.

We can achieve this by twinning each of the local government areas currently or more recently existing there above Parish or Town level, but below County level, with a comparably populous area of each of Scotland, Wales, Northern Ireland, and London or the South East, and requiring by statute that both expenditure and outcomes across each of the relevant Departments of State must never vary by more than three per cent between any such area and any one or more of its twins.

And we can achieve it by legislating to reduce the pay of the relevant Ministers (always including the Prime Minister) by any percentage difference in either expenditure or outcomes, above three per cent, between any of seven regions (the three Northern regions, the two Midland regions, the West Country and East Anglia) and any of the other five (Scotland, Wales, Northern Ireland, London and the South East), with any two or more such differences in the given year added together for this purpose.

Justice must also be secured for the Highlands, Islands and Borders of Scotland, and for North, Mid and West Wales, including by amendment of the devolution legislation.

This can be done by twinning each of relevant the Scottish Lieutenancy Areas and Welsh Preserved Counties with a comparably populous area of the rest of Scotland or Wales as the case may be, and requiring by statute that both expenditure and outcomes across each of the relevant Departments of State must never vary by more than three per cent between any such area and its twin.

And it can be done by legislating to reduce the pay of the relevant Ministers (always including the Prime Minister at Westminster, as well as the First Minster in the devolved body where applicable) by any percentage difference in either expenditure or outcomes, above three per cent, between the peripheral and the central parts of Scotland, or between South Wales and the rest of Wales, with any two or more such differences in the given year added together for this purpose.

Anonymous said...

The Barnett formula is outdated as the author admits. it was never meant to be a long term measure. However - Labour will not do anything, it will cost what votes they have left in Scotland. The Tories wont do anything as they are under the deluded impression that it will harm their (non existent) election chances north of the border.

The Tories will never be a major player in Scotland again. If as expected a conservative administration are elected in 2010 then Scotland will be independent within a decade. so it's about time Dave and his crew wake up to the fact that they are indeed the party of England and start to look after the interests of the voters who elected them.

Sorry Dave, you are destined to be "Prime Minister of England" better get used to the idea.

Lola said...

Anon 9.29 said "If this Barnett Formula is so 'unequal' how come parts of Wales are so poor that they qualify for 'Objective One' funding from the EU designed to bridge huge inequalities in income ?? "

This raises an interesting point on the whole transfer paymnent/government spending issue.

The reason that parts of Wales are so poor is that there is no economic value in them. There once may have been, steel etc, but not now. But in a democracy it serves politicians to sustain their constituencies by securing large transfer payments. This is just money taken from productive weath creating areas and people and giving it to wealth destroying areas and people. In parts of Wales the world has moved on. Tough, but there it is. In past times the people would have migrated to where the work was and their skills could be used, and wealth created. The lead miners in the NE are an example of this. Nowadays though, voters can blackmail governments into giving them huge transfer paymnents to stay where they are ate everyone else's cost. The Barnett formula is part of this problem. The problem of labour immobility. Of course this is just about to get far worse as the (quite correct) crash in house prices will add another handful of sand in the progressively less well oiled gears of wealth creation by making mobility even more impossible.

It is in the very nature of labour that it is mobile. Look at the polish plumbers (Hi Stan) who have come here. And the Auf Weidesehn pet brickeies who went to Germany. We need to encourage more mobility and emmigration and that will do more to adjust the leevl of these scandalous trabsfer payments that just make us all poorer.

In Scotland the scourge of this dependency and the mendaciousness of generations of so called socialist politicians has ensured a continuation of poverty in areas like Galsgow East. It has done nothing to make anyone any better off because no wealth is being created. They would have done better to find ways of helping people move to where wealtfh could be created. And before anyone else suggests that work should be taken to these areas just look at the history of such attempts, they have all failed. Marginal firms only go there to get the grants. These grants are taken from profitable firms elsewhere and that costs jobs.

Nope, scrap, as fast as possible, all these special areas grants and formulas. All of them (especially European ones) are all about buying votes and nothing to do with making anyone better off.

arrogant obnoxious cockney onanist said...

"We are the Conservative and
Unionist Party."

So you keep telling us, one problem tho, the rest of the union -
a: don't like you
b: dont want you
c: won't elect you


Forget the union - it will be over as soon as Dave is elected.

Scallywag said...

Richard Dale said... "Most of the North Sea oil is English, not Scottish.

International law says that the border is continued out to sea in the same direction as it hits the coast to determine mineral rights to 200 miles, and it goes very much North East near Berwick. The Nats are lying to their own people."

Unfortunately for this argument most of the serious oil and gas is way above that line on the map. Secondly all the oil and gas pipelines arrive in Scotland. What's England going to do when the SNP achieve their goal and take the oil and gas revenue for Scotland? Send in the tanks? I don't think so...

Travis Bickle said...

I rather begrudge the money we pour into the rest of the EU much more than anything that goes from England to Wales or Northern Ireland

Anonymous said...

English taxpayers want an end to SUBSISISING Scotland, and the Scottish Government wants financial control devolved to Holyrood, so now is the ideal time to consign the Barnett Formula to history.


Hear hear to that."

Ypour comment PROVES that you are racist Iain!

If you check your facts, you will find reports clarifying that scotland has subsidised england for years!

If you can do nowt but publish these scurrilous jottings, then I, for one, will NOT be reading your blog anymore!

johnny watford-gap said...

Why stop at Scotland?

The logical conclusion of this argument is that London/SE should declare independence from the rest of England.

Subsidised Englishman said...

"If you check your facts, you will find reports clarifying that scotland has subsidised england for years!"

If that's the case then you don't need the barnett handouts then do you?

Josh said...

Secondly all the oil and gas pipelines arrive in Scotland.

Well there's the CATS pipeline which goes to Teeside and all the pipelines from the gas fields off East Anglia. Then there's Wytch Farm in Dorset.

Phil Foul said...

"The logical conclusion of this argument is that London/SE should declare independence from the rest of England."

How's that then? Is London a country? Is the South East a country? No. Do these areas vote nationalist parties in who wish to break away from the rest of the state? What a load of bollocks.

Anonymous said...

"like most Northerners I have a lot more in
common with Scots than arrogant obnoxious
cockney onanists like you"

Speak for yourself, "mate". Not all "northerners" are extreme working class with thick regional accents. I can well image how some scrounging oik off some shit housing estate in Leeds might share such an opinion though.

Anonymous said...

Let's hold on here.

Splitting England and Scotland as two new independant countries would be very messy. The 'United Kingdom' would cease to exist so all international treaties would be void. Or both prior 'Kingdoms' would inherit them - if the other parties agreed.

Some current arrangements would be more difficult.
England would probably object to Scotland keeping the UK's seat on the UN Security Council and vice versa. No UK, no top table rights for either half of the no-longer United Kingdoms.

Jim

Born Today said...

Anonymous said...
The voting box does not work, especially when it is designed to work AGAINST democracy.
I hate the British in Westminster. I am disgusted to the very core...
September 10, 2008 1:27 PM"
--

You know, I could have sworn the SNP had effective power in Scotland. I'm sure they could have organised a referendum.

Unless, of course, the people you claim to represent don't actually agree?

And your threats of violence... well, lets be honest. How many people will be converted to your cause?

"They've subsidized us for years with their oppressive money and their government projects. After years of funding us we will take vengeance - we will bomb their cities and kill their people till they free us by not giving us money"

Do you see the problem here...?

(And if it did become a pissing match - we'd have to bomb what, 20-odd oil pipelines to cripple your economy?)

Do you really think that threats of violence is the way to go?
--

Not posted as an anonymous coward. Care to return the favour?

neil craig said...

"In only five of the last 23 years have North Sea Oil receipts exceeded the cost of higher funding paid to Scotland." is a curious way of phrasing it since over most of the last 23 years, or indeed 24, the price has run about $20-$30 a barrel. If, for example, prices had been several times higher over the last few years the statement could still be true while the overpayment during these 5 years was greater than the underpayment in the 19 years. There is clearly an overpayment this year & while I do not agree with the "peak oil" environmentalists who were assuring us a few weeks ago that prices would "soon" hit $200 a barrelit would be unwise to break uop the union on the assumption that prices will fall (or to break it on the Scotsd side onn the assumption they wil rise).

To mainstain a sense of proportion the £1,600 overpayment amounts to about £300 a year for the 80% living in England. This is 3% of the total tax we all pay & considerably less than we all pay to the EU. I know which union I consider more important.

Wat Tyler said...

Thanks for all the comments.

Rather than attempting to respond to them all here, I've posted a fairly detailed response here - http://burningourmoney.blogspot.com/2008/09/barnett-grrs-and-gers.html

Tim said...

I'm more than happy to give Scotland independence, and let them take their share of the national debt - rather more than purely that of 5 million 'average' UK citizens, clearly!

Furthermore, international convention dictates that a large portion of the oil that Scotland claims would, in fact, be English - as the border in the sea follows that on land - i.e. North-East/South-West.

Bring on the break up of the union, and save my English taxes!

ElSid said...

The SNP makes powerful arguments about why a small nation with a distinct culture should be freed from the money-grabbing imperialists to the south. Unfortunately what applies to the Scottish mainland applies in spades to the Scandinavian peoples of Orkney and Shetland. And most of "Scotland"'s oil in fact belongs to the Northern Isles. Looking at the UK's top 10 fields production (roughly down to 30,000 barrels per day), then three are west of Shetland, two are pretty much equidistant from Shetland and Fraserburgh (Donan and the only big one left, Buzzard), three are definitely closer to Fraserburgh (Captain, Forties and Alba), and then Elgin + Franklin are further south, roughly east of Stonehaven. These last two are the only ones that might conceivably be affected by "the diagonal", but the diagonal is a bit moot - all the serious oil that's left is much further north, in particular in the deep water west of Shetland.

So all the arguments the SNP put forward are much more powerful when applied to the Northern Isles - they should be careful what they wish for when it comes to claims that "they are stealing our oil".

The Nationalists should remember that the line in the National Anthem about General Wade crushing "rebellious Scots" refers to an Irishman's intervention in the last Scottish civil war, leading "loyal Scots" from the Lowlands againt rebels from the Highlands. The SNP should hope that those rebellious Scots stay crushed, a post-independence Central Belt would look really screwed if the Highlands decide that they don't want their historic enemies "stealing" _their_ oil.

neil craig - most people talking about peak oil tend to be in the oil industry, they're no environmentalists! And even if you don't believe that oil is a finite resource, you can't argue with the figures for oil production from the UK. According to the DTI/BERR figures, the UK's annual production reached an all-time peak at 967 million barrels in 1999, and by 2006 it was down to 542.5 million barrels. 12 months to 1 September 2008 saw 521.9 million barrels.

So oil production is down 46% in less than 9 years - this issue of "Scotland's oil" is going to be pretty moot soon in any case. And what has happened to this record oil production? Has a prudent Chancellor stashed away the proceeds for future generations as the Norwegians have done? Well - at least we have proof of what a prudent Scotsman would do with an oil windfall.

And what has been the policy response to this falling oil production? A decisive move to a Norwegian-style system that encourages exploration and then taxes heavily any discoveries that are made? Of course not - just dither and photo ops.

It may sound obscure, but this is the kind of stuff that is the measure of a minister - and it is at that level that Gordon's failures have been most acute. I'm not saying that any of the other candidates would be any better, but this government has made a complete Horlicks of energy policy for a decade, and now chickens are coming home to roost.

Allan Scullion said...

I find it very odd that whenever the subject scrapping Barnett comes up, many Scots go on the defensive with comments like "If you check your facts, you will find reports clarifying that scotland has subsidised england for years!"

Surely that is a perfect argument for scrapping Barnett?

Oh... and this comment:

but don't let the Scots MPS vote on English matters. That is the true iniquity."

John-the SNP (who ARE the Scottish Govt) do NOT vote on english matters!

Only the 3 other parties do!

Get your facts right and perhaps you will be worth listening to!


For a start, the Scottish Assembly and the UK Government are two different beasts. The last time I checked, the SNP do not hold 100% of the seats in Scotland. There are many Scottish seats in Westminster held by "the other 3 parties". That is what the whole Lothian Question is about.

It might be an idea to check your own facts before you go off half-cocked like that.