Killing Home Rule by Kindness

Channel Four have been investigating the Barnett Formula:

English politicians claim that the Scots get more than their fair share of public money in the United Kingdom. But is it really true?

In a word, yes. The Barnett Formula is a mechanism for determining the budgets of Scotland, Wales and Northern Ireland, and although Channel Four attempt to muddy the waters by highlighting disparities between English regions, regional spending in England is not what the Barnett Formula is about.

In a recent speech David Cameron noted that there had been squabbling over the Barnett Formula and vowed not to allow the Barnett grievance held by those in England who seek to dismember Britain break up the British family. Twelve months later, after prolonged squabbling and the election of a Scottish Prime Minister, he signaled that the Barnett Formula was not sacrosanct (which is what David Davis called it during the Conservative leadership hustings in Scotland):

We are not currently looking at it, but it is a question we ask ourselves and we are right to do so - is the Barnett Formula right for the year 2007 and beyond?

According to Professor Ian McLean the origins of Scotland's high levels of public spending can be traced back to attempts to kill off Irish home rule in the 1880s:

The Conservatives opposed Home Rule for Ireland partly because they feared it might also spread to Scotland. Goschen, as Chancellor, came up with a rule designed to push money towards Ireland and Scotland in a bid to buy off independence.

Economist Bill Jamieson believes that:

the need to foster an unshakeable belief in Scotland's economic dependency on the British Treasury became the dominant strand in both Labour and Conservative approaches to unionism for most of this century (Bill Jamieson: The Bogus State of Brigadoon, 2004)

It's a view articulated well by Tony Blair who claims that the Barnett Formula is a small price to pay to prevent the break-up of the Union. We all know that it's this reasoning that has allowed Scotland to go for so long taking more than its fair share of the UK pot: Alex Salmond knows it, Gordon Brown knows it, and David Cameron knows it.

Bill Jamieson also offers an insight into how rising Scottish nationalism has helped the Scots maintain their advantage:

As this disaffection spread, fears of a nationalist upsurge were used to prise more money out of the Westminster government, so that by the late 1960s government spending in Scotland was 20% above the British average. The rise of the SNP worked to intensify the crisis of Labour economics. Scottish voters quickly came to learn that if they pressed the bar marked 'protest vote' yet more money and subsidies would come flying down the Labour tube. The Conservatives under Heath were little better, abandoning a 1968 commitment to a Scottish assembly in favour of yet more state expenditure.

The Tories are far from blameless, they've recognised the unfairness of the formula for years. This is what Liam Fox had to say in 1988:

By making a virtue out of higher public expenditure figures in Scotland, the desirability of increased public spending as an end in itself has been reinforced in the mind of the electorate. This has made current policy for Britain as a whole seem more alien, as well as entrenching Socialist and Nationalist principles in the minds of the voters. It has also reinforced the idea -- that Scotland should receive funding based on being Scottish rather than on specifically identifiable needs.

Since 1978, indeed, public spending in Scotland has been allocated on that basis. In this absolutely crucial area Scotland is treated as if it did have a devolved assembly. The formula used to determine public spending was adopted by the Labour Government on the assumption that an assembly would be set up. What is more the formula was based on actual spending in the late 1970s when Scotland was treated with particular generosity. So the formula locks in high provision concealed under Labour. It has helped bring to Scotland levels of public spending which are consistently higher than those in England -- 28 per cent higher in the last financial year per capita.

This state of affairs assists Scottish nationalism (which the Labour Party is now attempting to exploit) -- not Unionism -- and has propagated the deeply damaging idea that even Conservative Secretaries of State have to battle against the 'English Treasury' to keep funding for Scotland at high levels. This injects an almost colonial note into Scottish politics, which is wholly inappropriate for a full and equal partner in the Constitutional Union. And it stirs up resentment against Scotland in other regions -- particularly the North East -- which suffer from similar problems, but which are less handsomely treated by the public purse. Unionism must mean proper equality -- both as regards obligations and benefits.

We believe that the concept of funding for nationhood and not needs should disappear, and that public spending should be directed to where it can be most efficiently used, no matter where the border happens to come on the map. (Liam Fox: Making Unionism Positive, 1988)

Not only is it morally wrong to apportion social funding on the basis of nationhood in the hope that it will stave off separatism, it is - in the devolved age - a policy that is doomed to failure. Not only are the renascent English correct to challenge the unfairness, Alex Salmond is correct to highlight it because he realises that the featherbedding of Scotland by the UK Government is a vital component of the Unionists' armoury.

As Liam Fox points out there is a colonial aspect to the formula, it's past its sell-by-date; the formula has become demeaning to the Scots, their English pay-masters and most of all to the Unionist politicians who support it in the face of massive public and press disgust.