Gerald Warner

‘We’re all doomed!’

Scotland is staring into a £4.5 billion black hole

Scotland is staring into a £4.5 billion black hole

‘Their form of rule is democratic for the most part, and they are very fond of plundering…’ That description of the Scots by Cassius Dio, the Roman historian, in the early 3rd century testifies to the consistency of the Scottish character over 1,800 years. Today the Scots are so democratic they have saddled themselves with three tiers of government, while their enduring taste for plunder has progressed from the crudity of border reiving to the sophistication of the Barnett Formula. Scotland has successfully reversed the fiscal arrangements that would have been familiar to Cassius Dio in the days when outlying nations paid taxes to Rome: contemporary Caledonia is a dependency that exacts tribute from Westminster.

That relationship is about to change. The campaign for the Scottish elections is being conducted in the context of the most radical fiscal revolution since the Treaty of Union in 1707. The Barnett Formula currently awards £1,600 more per capita public expenditure in Scotland than in England. There is universal recognition, however, that English taxpayers will no longer submit to Danegeld on so outrageous a scale. The Office for Budget Responsibility will start work next year on devising a substitute for Barnett which is expected to be predicated on a needs-based formula. That will, at a stroke, leave a £4.5 billion black hole in Scottish funding. Cue Corporal Fraser: ‘We’re a’ doomed!’

The election campaign began with Labour well in the lead. Now the SNP has overtaken them; the latest YouGov poll shows the nationalists projected to win 55 seats, six ahead of Labour, with the Tories trailing on 14 and the Lib Dems with six, just one ahead of the Greens. Since the party manifestos are pie in the sky, the SNP lead is attributable to Alex Salmond’s performance on television, far superior to Labour leader Iain Gray and any other opponents.

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