Fears of block grant cut if No vote as London Mayor latest to attack Barnett Formula

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  By Angela Haggerty
 
The future of the Barnett Formula and the threat of cuts to Scotland’s block grant was thrust further into the spotlight on Monday after London Mayor Boris Johnson tweeted that a Yes vote for independence meant that England would no longer “have to help pay” for Scotland.
 
Mr Johnson was asked on Twitter how the departure of Scotland from the United Kingdom might affect London and in response he said: “Well we wouldn’t have to help pay for Scotland via Barnett formula! But it would be sad and wrong.”

Mr Johnson made the comments the day after he penned an opinion piece for the Telegraph in which he compared Scotland and England to a bickering couple in need of a counsellor, and followed Scotland Secretary Alistair Carmichael’s comments on the Sunday Politics show indicating that changes to the Barnett Formula may come after the “economy has stabilised”.

Mr Carmichael has previously called for the Barnett Formula to be scrapped, saying in a 2010 STV interview that the government wanted to replace it with a “needs-based formula”.

The latest twist in the argument over the Barnett Formula, which is the calculation used to decide the budgets handed down by Westminster to Scotland, Wales and Northern Ireland, prompted further concern from Scottish politicians.

“Westminster politicians are itching to cut Scotland’s budget after a No vote, and Alistair Carmichael this weekend indicated that it is coming down the track,” said SNP Treasury spokesperson Stewart Hosie MP.  “But Scotland more than pays its way in the UK, and only a Yes vote can guarantee that all the taxes raised in Scotland are spent in Scotland.

“The Holtham Commission in Wales previously indicated that scrapping the Barnett formula could see Scotland’s budget cut by £4bn in a single year – a move that would have a devastating impact on communities across Scotland.

“Scotland already contributes 9.9 per cent of UK tax revenues, but receives just 9.3 per cent of public spending – and Scotland has contributed more per head to the Treasury than the UK average in each of the last 32 years.”

This week’s attention on the Barnett Formula follows the visit of Welsh First Minister Carwyn Jones to the University of Edinburgh to discuss the future of the UK last week.  Mr Jones has previously spoken out in favour of Barnett Formula reform that would lead to a cut in funding for Scotland, despite statistics showing that Scotland currently receives a lower share of financial resources than it contributes to the UK purse.

The future of the Barnett Formula is a source of some concern for Scots, with a recent Panelbase poll showing that 48 per cent of respondents in Scotland said they would be more likely to vote in favour of independence at the referendum in 2014 if the Barnett Formula was scrapped, compared to 38 per cent who felt they were more likely to vote no.

Mr Hosie added that the concern over the Barnett Formula was clearly a big issue in the independence referendum debate.

“The moves afoot to scrap Barnett in the event of a No vote show that this dismal future on offer to Scotland would see our budget cut by billions of pounds, disadvantaging Scotland even further under the Westminster system – underlining the urgency of achieving a Yes vote,” he said.

“Boris Johnson has once again made clear the consequences of a No vote with his offensive and inaccurate remarks, which come on the back of his daft newspaper article.”

In the article by Mr Johnson, he described his “fuzzy warm feelings” for Scotland and discussed his love for bagpipes and porridge.

In July 2012, the outspoken Tory Mayor controversially claimed that London “exports” its taxes to Scotland and that there was not a “cat’s chance in Hades” that Scots will vote for independence.
 
Speaking on Channel 4 news, the Conservative politician also said that Edinburgh’s financial sector was reliant on London for its existence, saying “The financial services in Edinburgh exists because of London”.

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