Killing the Union with Kindness to Scotland

Professor David Bell was on Newsnight Scotland last night explaining that Scotland's £332m budget cut was just the tip of the iceberg. Scotland would need to cut two to three times that amount every year for the next four years, and possibly more if the areas ring-fenced from cuts (Health, Education) lose their protected status in England. So Scotland is optimistically looking at £4bn worth of cuts over the next four years.

It was the same David Bell who last year warned us that reform of the Barnett Formula along the lines envisaged by the Holtham Commission would cost Scotland £4.5bn a year.

So why was reform of the Barnett Formula shelved by the coalition Government?

In a word: Scotland.

As John Osmond writes:

The problem for the government is that, as expert Iain Maclean explained on this site yesterday, if that move were made, the Scottish budget would be cut since it benefits unduly from the present arrangements. Plainly such a prospect was uncomfortable for the London government in the coming year when it has to face elections for the Scottish Parliament.

Losing £4.5bn per year through reform of the Barnett Formula and £4bn per year by the end of 2013 in budget cuts, would spell calamity for a country where the public sector accounts for 50% of the GDP.

And David Cameron and Nick Clegg know that only too well:

Mr Cameron, the Prime Minister, and Mr Clegg, his deputy, had promised in their manifestos to replace the formula with a system that distributes public money based on need.

But it is understood they were nervous about the political ramifications of handing Scotland a ‘Barnett cut’ on top of reductions to the Scottish block grant already in the pipeline.

The Barnett Formula was always about Killing Home Rule with Kindness, but one has to wonder whether during the terrible austerity years that are to come, unionist politicians might regret not addressing Barnett in the times of plenty. I have a feeling that the people of England and Wales will make them wish that they had. Implementation of the Calman Commission's ridiculous 10p tax rate proposal might go some way to damping down anti-Scottish feeling in the rest of the Union (which is exactly what it is designed to do) but it will be disastrous for Scotland (see Gerry Hassan)

BTW, is it only me that thinks it strange that the devolved administrations can defer their budget cuts, given that the need for budget cuts is so urgent that the Tories were prepared to concede vast swathes of their manifesto to the Lib Dems in order that the cuts should happen this year and not next? What mugs we English are.