Conservative Diary

« United at the top. Major, Hague, IDS and Howard are giving Cameron all the support they can. | Main | What should be taxed? Not wealth and land, if we can help it. »

£1,624 - the gap in public spending per person between England and Scotland

By Matthew Barrett
Follow Matthew on Twitter

Figures released by the Treasury's annual Public Expenditure Statistical Analyses today have shown a record gap in yearly public spending on people in Scotland, and people in England. The total public spending per Scot last year was £10,212, compared to £8,588 in England. The gap is now £1,624, an increase of 15.2% on the previous year, when the gap was £1,409.

The difference in spending per person was even wider in the economically successful regions of England. The South East, for example, received just £7,533 per head. 

The Daily Mail has calculated the cost to every English family to subsidise Scottish public services - free university tuition, free long term elderly care and free prescriptions - at £420 a year. 

But the English are not the only losers in Scotland's public spending formula. The Welsh also get a very bad deal - Wales, the Daily Mail says, is "significantly" poorer than Scotland, and yet the public spending per head in Wales is, like England, less than in Scotland; Wales receives only £9,829 per person. 

The news has prompted several Conservative MPs to call on Ministers to look at reform of the Barnett Formula - Scotland's funding system, which was introduced by the Callaghan government in 1978. Gordon Henderson, the MP for Sittingbourne and Sheppey, warned: 

"Something has to be done before the justifiable resentment felt by many people about the unfair subsidy English taxpayers are expected to contribute towards superior services north of the border, manifests itself in an anti-Scots backlash."

David Mowat, the Member for Warrington South, also said:

"This is quite wrong and will rightly cause indignation in England. Many MPs are having to defend deeply unpopular cuts. We do so on the basis that there is no alternative and that the deficit must be brought down. This argument looks a bit limp when the Coalition is able to fritter away billions of pounds to appease vested interests north of the border."

The Barnett Formula was originally intended as a temporary measure, but governments of all colours since 1978 have failed to reform the system. Lord Barnett, who introduced the Formula as Labour's then-Chief Secretary to the Treasury, has also warned that the system is “grossly unfair” to England and is actually planning to table amendments to the Scotland Bill, which would replace it.

The problem with reforming the Formula is exacerbated by the partisan divide between England and large parts of Scotland - in other words, the fact that Scotland tends to vote Labour, and England does not. PoliticalBetting's Mike Smithson has an interesting factoid along those lines:

"Some months before the 2001 general election I found myself sitting next to the young George Osborne, then not even an MP, at a dinner in Oxford and we talked about the coming fight. One of his ideas, which at the time seemed particularly smart, was for the blues to “play the English card”"

With one seat in Scotland, David Cameron and George Osborne have little to lose by reducing public spending in Scotland. But will Nick Clegg, whose party was almost wiped out at the Scottish Parliamentary elections in May, want to risk losing his already-endangered 11 Scottish MPs by reforming the Barnett Formula? I think we know the answer.


You must be logged in using Intense Debate, Wordpress, Twitter or Facebook to comment.