BBC reporter claims England subsidises the rest of the UK

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  By G.A.Ponsonby
 
A BBC reporter has claimed that figures released by the Westminster Government show that English taxpayers are subsiding the rest of the United Kingdom.
 
The claim by David Cornock follows publication by the Westminster Government of a breakdown of UK spending across the nations and regions of the UK.

  By G.A.Ponsonby
 
A BBC reporter has claimed that figures released by the Westminster Government show that English taxpayers are subsiding the rest of the United Kingdom.
 
The claim by David Cornock follows publication by the Westminster Government of a breakdown of UK spending across the nations and regions of the UK.

According to the figures, public spending in Scotland last year was £10,152 per head which is 116% of the UK average.  In Northern Ireland the figure was higher at £10,665 (124% of the UK average) and in Wales the figure was £9,709 per head last year (110%), compared to £8,529 in England which was 97% of the UK average.

Commenting on the figures, Mr Cornock said they were, “a reminder of how much the taxpayers of England subsidise the rest of the UK.”

Echoing the view of the BBC reporter was the UK Treasury who claimed the figures were proof of the “real financial benefit” Scotland gets through being in the Union.

Chief Secretary to the Treasury, Danny Alexander attacked what he claimed was the risk of “separation” and said: “These figures demonstrate that the people of Scotland continue to see a real financial benefit of over £1,300 per person compared to the UK average.”

However the SNP has hit back at the claims by pointing out that recent official figures showed that Scotland already contributes more than it receives.

Annabelle Ewing MSP said: “When both sides of the balance sheet are looked at together, Scotland more than pays its way in the UK – a point validated by the Institute for Fiscal Studies report this week.

“In the most recent year, Scotland contributed 9.9 per cent of UK tax revenues, in return for just 9.3 per cent of UK spending.  Over the five years to 2011/12, Scotland has been financially stronger than the UK as a whole to the tune of £12.6 billion.

“And Scotland has contributed more tax per head than the rest of the UK in each and every one of the last 32 years – proving we can more than afford to be a successful independent country.”

A spokesman for the anti-independence campaign Better Together claimed the figures backed their own arguments against independence: “These figures underline the fact that we have the best of both worlds here in Scotland.

“We have a Scottish parliament making decisions about our health, our education and our police, and we have the strength and security of being part of the United Kingdom.  Devolution works.  Independence would end it and would be a huge leap into the unknown.”

However Ms Ewing added: “The best of both worlds is an independent Scotland in charge of own abundant resources, and a relationship of equality with the rest of the UK.

“A No vote would be the worst of all worlds because it would be a green light for the Treasury to slash Scotland’s budget and the services we all depend on.  As is crystal clear from the interventions of Labour’s Welsh First Minister Carwyn Jones, and the Local Government Association south of the border, politicians in all of the Westminster parties are itching to impose even harsher spending cuts in Scotland than those already happening, by scrapping the Barnett Formula.

“And, unbelievably, the No campaign are egging them on by peddling a distorted picture of Scotland’s finances.”

The publication of the figures comes on the same day that questions were raised over the future of the so-called Barnett Formula which is the system used to calculate the budgets for each of the devolved administrations.

Speculation that plans are afoot to end the formula was heightened today with a visit to Scotland by Welsh First Minister Carwyn Jones.  Mr Jones has complained that the system costs Wales £300 million each year and is calling for changes to how budgets are calculated.

If scrapped, then Scotland could lose as much as £4bn from its annual budget.

Asked on Radio Scotland whether his calls to scrap the Barnett Formula would mean more or less funding for Scotland, Mr Jones replied: “It’s difficult to tell, what we do know because we’ve looked at it purely from a Welsh perspective is that we’re under funded by £300 million. From my point of view, as long as that under funding is dealt with it doesn’t really matter in terms of what happens in Scotland.”

Speaking today Chief Secretary to the Treasury Danny Alexander confirmed that plans were already underway to bring public spending totals for the constituent parts of the UK “closer together”.

The Lib Dem minister said: “That’s not happening right now because public expenditure is constrained and that will be the case for quite a few more years but when it does re-assert itself we’ve got a process to identify that and agree action to take.”

Fears that Scotland could lose billions in funding in the event of a No vote have grown after senior politicians in all three UK parties signalled their intention to scrap the Barnett Formula.

In 2010, Scottish Secretary Alistair Carmichael stated: “We do want to see Barnett scrapped.  We want to see that replaced by what we call a needs based formula…”

In September this year, Labour’s Shadow Scottish Secretary Margaret Curran signalled her own support for a change to the current calculation mechanism.

She said: “I do believe that we should allocate public funding on the basis of need and it should not be around just a regional or a national demarcation around that.”

In April, Labour leader Ed Miliband signalled the party would end the Barnett formula when he pledged a “new settlement” if Labour won the next UK general election.

He said: “We need to build a new settlement and only Labour can do it.  The answer lies not in going back but in a new settlement, appropriate for new times.”