Sunday, 8 December 2013

Dome sweet dome

Those of us who have been in the ‘Yes’ campaign for a while will be familiar with this argument:
‘Spending in Scotland is higher than in the rest of the UK’.
This argument is an extension of ‘too poor’, as in ‘too wee, too poor, too stupid’, and the conclusion we’re supposed to make is that Scots could not afford to look after themselves, or would be forced to accept poverty under any system other than Westminster’s.  It depends entirely upon the Barnett Formula, which allocates how much money Scotland, Wales and Northern Ireland receives as a consequence of expenditure in England.  Unfortunately for the no campaign, the conclusion they try to pedal is wrong.

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Before we get into the Barnett figures themselves, we need to look at expenditure versus affordability.  Affordability is easy.  Let’s say that there are two houses on a street.  House A has 10% higher income, and 5% higher expenses, than House B.  We can conclude, regardless of the actual figures, that the first house is better off, but just to highlight the point we'll add numbers:
House A
Income £11,000 Expenditure £11,550 Deficit £550
House B
Income £10,000 Expenditure £11,000 Deficit £1,000
House A has higher expenditure, but it more than makes up for this with greater income.  This is the case with Scotland.  We contribute a greater percentage of the UK’s income than we receive in UK expenditure. 
This affects other unionist arguments, including Scotland’s deficit.  An independent Scotland may have had a deficit if it had been run the same way as Westminster (including the numerous wars and Trident), but our deficit over the past 30 years would have been much, much smaller.  The conclusion we should make is that even if the Barnett figures were telling the whole story, we would still be in ‘House A’, and financially better off with independence.

Sign for Scotland
There is also the principle of Barnett.  At present, the first consideration is always ‘how much should we spend in England to meet England’s needs?’  Only after this has been decided does Westminster think ‘how much then do the Scots, Irish and Welsh receive?’  This isn’t how our government should operate.
A better solution would be for the money raised in Scotland to stay in Scotland, with our Government basing spending upon our needs and budget.  This is an option which Westminster will not allow, partly due to the vast income it receives from North Sea oil and gas, partly because they wouldn’t be able to neuter a free Scottish economy that could rival London’s hegemony, and partly because the people of Scotland would clearly see how much they are paying to be part of this union.  With our first set of accounts displaying vast sums of money heading south to bankroll wars we don’t want, the people of Scotland would quickly come to the conclusion that independence is the best option.

Sign for Scotland
"Give all our money to Westminster for pocket money?  I don't konw, Davey."
Finally, let’s look at the numbers that are missing from Barnett.  There are numerous examples of ‘UK’ expenditure which does not trigger Barnett (and thus are not considered by unionists).  The Millennium Dome is a good example.  It was deemed ‘UK expenditure’, and therefore there were no payments to the ‘regions’.  The £4,200,000,000 (£4,200 million) London sewerage project was an even more expensive use of this trick.  The Jubilee Line, which cost £3,500,000,000 (£3,500 million) and the £1,200,000,000 (£1,200 million) being spent at Cheltenham on new communications headquarters are the same. The London Olympics is yet another example, with expenditure being classed as ‘UK wide’, despite only 0.04% of public sector spending reaching Scotland.
Then there is the redirection of national lottery funding, the dramatically higher Ministry of Defence spending in the South of England, and the multitude of civil service jobs that are based in London.  These things don’t count towards Barnett.  This additional expenditure, coupled with vastly superior infrastructure, the ‘London allowance’ and strong Government focus, is the source of the south east’s economic strength.  If anywhere else in the UK had the same systemic advantages, they would doubtlessly have the same success.
So the next time someone says ‘Scotland can’t cope without subsidies’, just remember that beneath the surface, the figures tell a different story.  Scotland doesn’t receive subsidies; we’re just getting back some of our own money.
With independence, we wouldn’t give it away in the first place.

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