As the SNP schemes a way to independence, could scrapping the Barnett formula be George Osborne's next electrifying move?

Alex Salmond, leader of the SNP and First Minister, yesterday proposed that Scotland could become independent even if independence wasn't voters' first choice.

Alex Salmond (MSP and MP) - who is under fire for costing taxpayers the equivalent of £26,000 for each of the six visits he has made to the Commons in the last year - is proposing that voters could rank independence alongside the status quo and an option for more powers for Holyrood in a three option referendum.

Annabel Goldie, Leader of Scotland's Conservatives, dismissed the ideas as "tripe":

“This is tripe – the wild words of a panicking man. Alex Salmond is clutching at straws for his minority whim. It may have escaped his notice but you don’t have a referendum to preserve the status quo – devolution is the status quo... Salmond’s proposal is born out of a recognition that independence is a minority view held by a minority party. His so-called ‘National Conversation’ has no Parliamentary mandate and is a one-party, one-country initiative. By contrast the Constitutional Commission is independently chaired, cross-party, cross-border and has Parliamentary authority.”

Mr Salmond's announcement came a day after Scotland's other main parties announced that Sir Kenneth Calman would chair their wide-ranging new inquiry into new powers for the Scottish Parliament.  A majority of MSPs have approved the inquiry.  Part of its remit will be the financial settlement - the so-called Barnett formula - that Scotland enjoys with the rest of the United Kingdom.  There is strong support within the Tory grassroots for a review of the formula.  Four-fifths support a "fairer" settlement for the English taxpayer.  On his blog yesterday Nick Robinson suggested that scrapping the Barnett formula may have the same electrifying effect of George Osborne's abolition of inheritance tax for non-millionaires.  That is why, speculates Mr Robinson, Labour may pre-empt Tory moves later this year.

Comments

[Margaret Hemmings]

Yes

Scrap this immediatly. Why are we English subsidising the Scots.

How can osborne say there is no room for tax cuts when clearly we could scrap the Barnet formula and give the money back to higher rate taxpayers like me.

Just another step on the road to a flat tax!

[Robert McIlveen]

Of course, the rich bits of England would still be supporting the poor bits of Scotland - so the net flow would remain, if not at the same level. But I see no reason why Scotland should funded differently from, say, Yorkshire, which has a similar mix of rich, poor, urban and rural but copes without ring-fenced taxpayer spending.

[James Maskell]

If Osborne announced that the Barnett formula is to be replaced, Osborne will need to have considered what will replace it. If he doesnt know what he is talking about then he will be found out very quickly indeed.

Electrifying it may well be, but if its just a stunt without a sustainable policy behind it then dont bother at all. Politics is cynical enough without politicians having to stoop to the biggest stunts possible in order to attract attention.

[Letters From A Tory]

If Brown doesn't do something about Barnett formula, the Conservatives will step into the breach and take votes away.

If Brown does do something about the Barnett formula, the SNP will crucify him north of the border.

[Sammy Finn]

It won't be as simple as ending the Barnett formula. Boris (London's next Mayor, fingers crossed!!) has already spoken about a fairer financial settlement for the capital. Will what Scotland loses go to the whole of England and Wales evenly, to poorer communities, to London, or in tax cuts? And how much exactly are we talking about?

[Sammy Finn]

Great comment Letters From A Tory. This looks like a lose-lose scenario for Brown.

[Jennifer Wells]

Sammy,

I do not know about the exact value of the Barnet formula but these are the latest expenditure per head numbers:

England £7,121
Scotland £8,623
Wales £8,139
Northern Ireland £9,385

[englandism.com]

‘Of course, the rich bits of England would still be supporting the poor bits of Scotland’

Quasi-independence but keep the dependence. Have your cake and eat it in other words.

Posted by: Letters From A Tory | March 27, 2008 at 09:44

On the money but not much sign of stepping into breaches hereabouts. Ken Clarke thinks it all a bit of a 'niggle'.

[Bill Brinsmead]

Give it a rest people.

PESCA 2007 reported the following on total identifiable expenditure on services by country and region per head in real terms for 2006–07

North East £7,980
North West £7,610
Yorkshire and Humberside £7,014
East Midlands £6,334
West Midlands £6,894
Eastern £5,995
London £8,200
South East £6,151
South West £6,516

England £6,949
Scotland £8,414
Wales £7,943
Northern Ireland £9,158

More public expenditure for London? You can't be serious

[englandism.com]

More public expenditure for London? You can't be serious:

Scotland per capita GDP including oil = 16,900 GBP

London per capita GDP excluding pie and mash = 51,044.95 GBP

Shouldn't that be 3 X the subsidy? London is the richest area in Europe.

[Josh]

What's the Shetland per capita GDP including oil? Why is Alex Salmond so hell bent on ensuring that Shetlanders have to share their oil with Glaswegians?

It's Shetland's oil!

[London Tory]

No, no, no

To be a truly One Nation Party, we must remain strong in Scotland. We are up to 18% in the latest poll.

The Scots will soon tire of Salmond's gimmick driven politics.

[John F Aberdeen]

As a firm believer in low taxes, miniscule government, NO subsidies and everyone standing on their own two feet, in all parts of the UK, I agree the Barnett formula should be scrapped.
If the scrapping of the formula leads to a huge reduction in the numbers of people employed in the Scottish public sector that is a good thing,, if however the reduction leads to more taxes then most professional people will simply emigrate.
So yes George O please make a pledge to scrap the formula and give the people of Scotland a real choice at election time,, parties who promote more tax or those who promote less.
As for the decision of Goldie and the offical Scottish Tories, joining in with this Lib, Lab cabal, I personally find this utterly contemptable.
Its not so long ago that Labour were boasting of wiping us out and of Lib/dems like Charlie Kennedy boasting of how they were going to decapitate us (please Kennedy "make my day" come and try taking my head off) so why the hell are we joining with these v****n, the very people who have been single mindidly destroying the UK in favour of splitting the country into regions as requested by their masters in Brussels.
Frankly the time has long come for those in the Scottish party to either put a stop to this nonsense or for those of us, like Lord Forsythe to split and form a new party.
One last thing surely the fate of the UK should be open for all the UK countries to decide, its hypcritical of one nation deciding whether or not it wants to stay in the UK club whilst denying the right of the other club members to have a say if they still want you in the club.

[Toque]

What is electrifying about scrapping the Barnett Formula?

It's widely acknowledged to be a crock of sh*t, even Lord Barnett says as much.

It's only been retained by successive Labour and Tory Governments as a way of buying Scottish favour.

[Jonathan M. Scott]

As someone who is not English, I find this proposal despicable and unjust. And I hope English people find it despicable and unjust too - it is 'robbing Peter to pay Paul' politics. It is divisive and non-Unionist.

What's more, it is not particularly intelligent as it would guarantee that Scotland would not return a single Conservative MP (there are at least 5 seats up for grabs), and could prevent a Tory majority. It could also turn the many Scots who live in marginal seats in England to Labour.

Fortunately, Osborne is too sensible to go down this Non-Unionist route. If public expenditure is to be reduced, it should be reduced proportionally ACROSS the UK, not in just one part of the country.

[R.Baker.]

George Osborne must never ever think about replacing the Barnett Formula.
His plan should be to REMOVE IT.
The SNP would get a large slice of the blame for that decisive action by us.

[englandism.com]

'despicable and unjust'

As an Englishmen I’m a wee bit huffy about not having a legislative or executive.

I tad peeved, for example from endless examples, at the Welsh NHS describing me as a foreigner in my own country.

I am apoplectically incandescent with bulgy eyed fury that the threat to the Union is seen as a consequence of the English calling for parity and justice when the entire impetus for disunity has come from the glowering resentment of a small proportion of the Celtic periphery celebrating a romanticised vision of a socialist utopia with claymores and sheep bladders.

England is really quite annoyed. Really.

[Jonathan Gray]

Local funding will always be unjust - and (see 10.46 above) as a Councillor in the Eastern Region I know something about that! Central government grants and funding need to be more transparent and consitent across the whole of the UK.

Should the Scottish Executive (sorry, Government) wish to introduce further benefits for their citizens which cannot be funded out of these streams, they can always levy the tartan tax (remember that?).

[London Tory]

Not so long ago we had quality Scottish MPs, people like Alick Buchanan Smith, Michael Forsyth, George Younger, Hector Munro and Nicholas Fairbairn to name just a few. Scottish cities like Stirling, Ayr, Perth and parts of Aberdeen and Edinburgh were ours. We can win these seats back under David Cameron and One Nation, compassionate Conservatism.

Margaret Thatcher understood the importance of the Union and the importance of the Scottish brand of Toryism.

We must not put this at risk by venting our spleen at the Barnett formula, but discuss and adjust it with sensitivity.

[englandism.com]

We have one MP in Scotland and he is within spitting distance of England. On a pragmatic level it would be infinitely more appropriate to give our hearts and minds to winning back hearts and minds in Northern England.

And could we use terms appropriately?

One Nation refers via Disraeli to social cohesion relative to the class divide rather than a union of nations.

The title Conservative and Unionist Party has nothing to do with Scotland and everything to do with Irish Home Rule.

[Mark Wadsworth]

What Margaret says. Scrap it.

[John]

Margaret Thatcher may have understood the importance of the union, but that was way back when. What about its importance now? I simply don't get why the union is such a big deal. If there are any benefits of the union (for England) they appear to be a closely guarded secret.

I am now of the firm opinion that England would be better off, indeed a great success, without the union.

Hopefully, if Barnett is scrapped, the Scots will feel the pinch and blame it on auld English oppression, give their support to the SNP and so on to independence.

Then the Tories would 'have' to think of England for once (perish the thought).

[Neil Wilson]

'Why are we English subsidising the Scots.'

Because that's the Union.

England on its own would still be a land where the south subsidised the north and so on.

Unless you want to go and live on island with nobody else on it, you will either be susidised or subsidising someone.

That's the way it is.

Unfortunately, I learned today that we are unab;le to put 'Conservative and Unionist' as our description from now on. Frankly it's appalling, especially in Liverpool where it matters.

[John Leonard]

I think it is wrong to evaluate this in terms of Scotland alone. I have done an analysis based on the figures Bill Brinsmead has produced above and it indicates how deeply biased Labour have been. Basically Labour has finacially penalised regions for voting Conservative.

If you consider each region in the UK it can be shown that in almost all cases the amount spent is related to the percentage of Conservative seats.

Here is a summary table of regions listed in order of the amount spent per person and the % of Conservative seats.

Region Spend (Con Seat %)
Northern Ireland £9,158 (00%)
Scotland £8,414 (02%)
London £8,200 (28%)
North East £7,980 (03%)
Wales £7,943 (08%)
North West £7,610 (12%)
Yorks & Humber £7,014 (16%)
W Midland £6,894 (27%)
South West £6,516 (43%)
E Midlands £6,334 (41%)
South East £6,151 (70%)
Eastern £5,995 (71%)
England (Average)£6,949 (37%)
UK Average £7,182(31%)

Of course London stands out as not fulfilling the trend but for the period of concern it has been under Socialist control and in anycase it is probably the key election battleground. No party can discriminate against London without damaging their future success.

This has not been a regional issue it is a cynical political powerplay. Consequently, it is not the regions who should suffer, it is the Labour Party. Punishing voters for choosing to vote COnservative is abhorrent and Labour should be punished for such cynical practices.

Whatever alternative funding solution the Conservative Party come up with ( and I agree the Barnett Formula is no longer suitable in its current form) they should ensure that funds are provided where they are needed and where they are going to be used most effectively. There should be no restrictions based on past Labour Party bias.

The Conservative Party must prove it is magnanimous in Government and does not suffer from the petty partisan bigotry of Labour.

Now that Scotland is and perhaps London in the near future will not be run by Labour is it any wonder that Brown is thinking of changing the way that funding is allocated?

[Stupid Idea]

Scrap it and replace it with what, exactly? A needs based formula is a joke - for more public spending keep people ill and out of work, for instance?

Barnett has its kinks but its beauty is its aromaticity. Plus anyone who thinks that the Tories can win an election on the slogan "vote Conservative to destroy the union" is off their marbles.

[Yet Another Anon]

Northern Ireland is probably going to be the main target for cuts in funding from Central Government.

The 3 main political parties are all too worried about what proposing cuts in Scotland and London would mean to them politically, probably differences will be allowed to narrow slowly with some kind of compromise settlement.

Ken Livingstone as usual will probably complain that too little is being spent on London and Alex Salmond will rant on about Scottish Oil, something which has almost gone and the SNP won't be able to use it as an issue much longer.

[englandism.com]

Plus anyone who thinks that the Tories can win an election on the slogan "vote Conservative to destroy the union" is off their marbles.

Devastating logic, my hat is doffed...

Er...voting SNP states what, exactly? Or like everything else, a sense of national identity does not apply to England.

Voting Plaid? Sinn Fein?

And there ain't no Tories in those there parts.

The slogan is: We would quite like to be given an equitable post devolutionary settlement please thanks (and that) if that is OK?

[Terry]

I can't improve on what Englandism said, so I'll repeat them...

"I am apoplectically incandescent with bulgy eyed fury that the threat to the Union is seen as a consequence of the English calling for parity and justice when the entire impetus for disunity has come from the glowering resentment of a small proportion of the Celtic periphery celebrating a romanticised vision of a socialist utopia with claymores and sheep bladders."

If you care about the Union, give England constitutional equality and SCRAP Barnett immediatly.

[Jake]

The Barnett Rules were introduced in 1978 . They were meant to last for one year . Due to Scottish persistence and not so much to English negotiating weakness as complete absence of any restistance to being raped whatsoever they are still going after 30 years.(There is something called "Barnett Plus" which the British government keeps very quiet about the details of which MPs have totally failed to elicit).
They are a major reason why,in England increasingly, the Union is coming to be regarded as a con.

They have worked . Scotland is now very prosperous;generally much more so than most of England. Try visiting and seeing for yourselves.England is increasingly aware and resentful .
That prosperity is , however, dependant largely on state jobs and funding. The English economy is much more private enterprise orientate. Another cause for resentment .

They have always been operated semi secretly and they depend on secrecy , particularly in England , for their continuance. They are part of the sleazy side of parliamentary government , like MP's expenses , which rely on few people knowing anything about them .In both cases the cover has now been blown.

Remarks above comparing the funding of Scotland to English "regions"( England has historically never had regions until imposed by this government), completely miss the point . The Barnett Rules are administered on a NATIONAL basis ie the funding comes from all of England as England and is sent to Scotland and Wales as the nations of Scotland and Wales .
And this in a supposedly United Kingdom wher we are all supposed to be British and equal .

The fact that Scotland and Wales have their own representative assemblies -a full parliament and government in the case of Scotland - means that as well being democratically hugely privileged compared with England which none of these they also have an institutionalised mechanism-in-depth for negotiating with the British governemnt.
England has only her mainly silent MPs , many of whom have made it plain that their loyalties are not to England .

Is it any wonder that the Barnett Formula , frequently condemned in the strongest terms by Ld. Barnett himself, is causing unrest. Any system, governmental or economic, must be balanced enough to be sustainable if it is to survive . Barnett is not.

Of course the Barnett Rules should be abolished . Not modified. Abolished. There should be fiscal independence of England and Scotland which is now becoming the only acceptable way forward .

Fiscal independence for England implies
an English government and therefore a parliament. Civil service too.

Just like Scotland's.

[DBX]

Be careful what you wish for. The Barnett formula is a crock, no doubt about it -- but it is arguable that so is the way in which North Sea oil revenue is disbursed. Take away the Barnett formula, and the SNP has a far more compelling argument about the oil money being "diverted" away from Scotland. As you prepare to revisit local government finance, you need to be prepared for the backlash.

Luckily the oil money is, as previous posters have noted, diminishing as a factor. In reforming/abolishing the Barnett formula you may find you need to point out that it has given Scotland more than a fair crack at oil money but now the oil is running out. And we have to move on. Sort of a fair play argument, rather than a playground fight.

[Glen Gillespie]

It is Annabel Goldie who is talking tripe. If she and the other unionist parties are so sure that it is only a minority of the scottish electorate who would vote for independence, why all the hysterics when salmond produced his white paper. Why within 2 days was she on board with labour in the clamour for more powers. Why the dodgy polls time and time again (which may i add few in Scotland give any credability to)and most important why the constant attempts to block a referendum. If Annabel Goldie is so certain why not back the referendum?
It's because the unionist parties know that the result is too close to call and therefore will not risk a referendum.
like most in Scotland i have no patience for Annabel Goldie or her ilk.
The tories opinions and ideology are of absolutley no relevance in Skotland and Annabel Goldie and her ilk would be freeing much needed space in Holyrood if they would just pack their jumble sale up and head south.
The tories wanted to deny Scotland her parliament. The Tories wanted to deny the parliament much needed new powers. Now they are tring to deny the people of Scotland the right to choose their own future. Annabel Goldie and her extinct party just don't get it.
Out of touch and out of buisness north of the border!