National politics

Barnett Formula for Dummies

Whatever your political persuasion if you want to understand what drives the public spending disparities between the so-called nations that make up the United Kingdom the guide published today by the Taxpayers’ Alliance is indispensable.

Even of you don’t like the TPA’s point of view writer Mike Denham, who writes the Burning Our Money blog, is an ex Treasury economist who knows his stuff and writes well.

No doubt the key points below will be picked up widely in the media but I would recommend the whole paper.

  • 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.

2 replies on “Barnett Formula for Dummies”

Do they have a figure for how much the extra public spending per head in London has cost the taxpayer? Because if you break the English figures down by region you’ll see that London gets more per head than any other English region, and more than Wales. Will you be complaining about that too?

More often than not post-war Labour governments have managed to legislate & sometimes stay in office because of the support from their Scottish MPs. It is the increase in nationalism over the last 30 years that has driven successive Labour governments to bribe the Scottish voters in order to stay in power. The Barnett Formula is one such ‘bribing vehicle’ and the other perhaps more important arises from the West Lothian Question. The latter, a pure con engineered by Labour whereby Members from Scotland, Wales and Northern Ireland exercise an important, and probably often decisive, effect on British politics. For example, in England we have university tuition fees, prescription charges, paid eye tests etc., etc. legislated on with the help of Scottish MPs & Scots have all these free & paid for through the 22% higher public spending identified in TPA report.

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