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To revoke the Barnet Formula for Scotland

(25 Posts)
Firecracker123 Sat 15-Oct-16 16:21:02

Scotland has an unfair advantage due to excessive money given to Scotland by the Barnet Formula. They use this to spend in uncontrolled ways, I.e. Free prescriptions and tuition fees. Thus is grossly unfair to the people of England and should be stopped with immediate effect.

Firecracker123 Sat 15-Oct-16 16:23:46

Please sign.

Granny23 Thu 20-Oct-16 10:45:26

I have been away for a few days and just spotted your petition. I am happy to note that no other Gransnetters have chosen to jump onto this particular hobby horse which has been debunked so many times before.

Elegran Thu 20-Oct-16 11:24:09

The money which you say is "given" to Scotland has been collected from them in the taxes paid by the Scots into the Westminster exchequer. How the Scottish government allocate it is their business. Your indignation would be better aimed at the way spending is allocated in your own part of the UK.

Jane10 Thu 20-Oct-16 13:30:24

That being said do we not receive more back than we actually pay in?

Anniebach Thu 20-Oct-16 13:37:48

When will it be accepted that Scotland and Wales pay tax too

Jane10 Thu 20-Oct-16 14:04:29

We do pay tax (well most of us do) but we seem to get more back than we actually contribute. I don't know about Wales but I'm sure they pay taxes too.

Elegran Thu 20-Oct-16 15:08:49

The key word in the OP is "uncontrolled". The decisions on where to allocate the Scottish share of Uk taxation are not "uncontrolled". They are controlled by those who live with the results of those decisions. That is what devolution was about.

The government at Westmister has no authority to "stop with immediate effect" the right of the Scottish Parliament at Westminster to choose their priorities for their money.

The calculations that determine the Barnet formula are another matter - they were originally designed to send to Scotland an amount of UK tax income proportional to the needs of the population of Scotland, out of the taxes which were and still are sent to Westminster. If they are not relevant to current population distribution and needs, then it may be time to review them.

However, NOT for the purpose of influencing the way that the devolved Scottish government votes to use that income.

Elegran Thu 20-Oct-16 15:10:43

That should have read "Scottish Parliament at Holyrood" not "Scottish Parliament at Westminster". Should have proofread better.

Elegran Thu 20-Oct-16 15:26:50

The other key phrase is "revoke the Barnet formula" - do you really mean that you think NONE of the tax that is paid from Scottish people into the Westminster exchequer should be returned to the control of the Scottish Parliament?

If you mean that Scottish income tax, VAT etc etc should go straight into the Scottish budget, without being filtered through England first, then there are those in Scotland who would agree with you! While they are changing that, perhaps they could also change the right to alter the rate of those taxe - it would hardly be fair to recive taxes without being able to set their level.

But you'd find there could be considerable resistance to that at Westminster - imagine the complications of administering different taxes, and the result of tax wars between the two systems.

gillybob Thu 20-Oct-16 15:31:13

As usual I haven't got a clue how this works but isn't the OP suggesting that the amount per head should be the same no matter what part of the UK you come from? I agree that it is up to individual administrations to decide how they go on to distribute this amount (whatever it is) but surely the amount should be the same for us all?

Just asking the question.

Elegran Thu 20-Oct-16 15:36:31

That is not what the OP said, gilly It said "Revoke the formula" so as to control what it is spent on - because it is being spent in "uncontrolled ways".

gillybob Thu 20-Oct-16 15:40:15

Sorry. My mistake. blush

Elegran Thu 20-Oct-16 15:44:11

I agree that the whole question could do with rethinking and reassessing, but doing it in an atmosphere of resentment and recriminations is not likely to lead to a result that is fair to anyone.

Jane10 Thu 20-Oct-16 15:51:10

Em elegran I rather thought that the Scottish govt did now have the right to set the income tax rates. They've decided not to adhere to Westminster rates hence Scotland being at risk of being the most highly taxed part of the UK with knock on effect of deterring inward investment.

Elegran Thu 20-Oct-16 16:21:17

Oops! Forgot that.

Granny23 Thu 20-Oct-16 18:24:57

Scottish Government does now have some powers over Income Tax but they are only allowed to vary the basic rate up or down across the board - they cannot alter tax bands or personal allowances. As a progressive Government they will not do that because an increase would hit the less well off hardest and a decrease would mainly benefit the already well off. Any extra tax raised in Scotland would be deducted from the total due under the Barnett formula, leaving Scottish Tax payers paying more tax than their counterparts in the rest of the UK while the Scottish Government's budget would remain the same.

Power over Income Tax was one of the promises made by the UK government before the 2014 referendum to persuade Scots to vote NO to independence. The UK government now claim to have fulfilled that pledge but have set the rules in such a way that no sensible Scottish Government would ever enact them.

On the subject of the tax take from Scotland it is worth noting that if a person living in Scotland works as say- the Scottish Area Manager for Boots, B&Q or Tesco - then their Income Tax will currently be recorded as paid in England where their company HQ is situated. Similarly, VAT paid on goods and services purchased in Scotland from UK wide companies, will be recorded as paid in London as will taxes on the profits of any company HQed there. (This anomaly is one of the reasons why the City of London always appears in stats as the most profitable 'region' of the UK). The recently released GERS figures which show, according to the right-wing Unionist press and media, that Scotland's balance of payments deficit is second largest in Europe (only exceeded by Greece) are also affected by these same methods of recording income, revenue and tax generated by where the tax is paid (mainly London) rather than where it is generated (e.g. oil revenues). An outstanding example is that all revenues for Whisky (entirely produced in Scotland) are credited not to the Scottish economy but to the southern ports from which it is exported. Also included in the figures are the billions spent under defense budget expenditure for Trident - as if Scotland were responsible for the entire cost of the base and weapons (which we do not want) rather than sharing the the cost of this UK 'asset' proportionately across the whole country.

This does not affect only Scotland but also Wales, N.I. the SW and North of England giving a skewed picture of the profitability and tax take of each country and region.

Jane10 Thu 20-Oct-16 18:48:34

When you say 'we' you don't speak for everyone in Scotland!

Granny23 Thu 20-Oct-16 19:11:08

Jane I think the only 'we' is re trident. I realise that some Scots do support it but every poll, vote in Holyrood, the Churches etc. has shown a large majority in favour of the removal of Trident from Scotland.

Jalima Thu 20-Oct-16 19:25:00

It is very clear that the formula was devised in a not particularly intricate or sophisticated way to deal with a short-term problem and that it was intended to be temporary. It is perhaps understandable that in those circumstances it was found easier to base it on population rather than on any assessment of comparative need. The formula has been in existence ever since. It has become one of those subjects that most now agree is crude, unsophisticated and ineffective. There is no doubt, based on the totality of the evidence that we have received, that needs and fairness have never been taken into account. They should be and it is high time that they were.

rosesarered Thu 20-Oct-16 20:21:12

I heard that Barnett himself, admitted it wasn't really a great idea.

FarNorth Thu 20-Oct-16 20:33:16

Saying that the formula needs to be changed or replaced to make things fairer is quite different from expressing the views in the OP.

Granny23 Thu 20-Oct-16 21:13:47

From the same report that Jamila highlighted:

"Finally, there is the issue of the Government's response to our report. I am bound to say that in all my experience, both here and in the other place and perhaps elsewhere as well, I have rarely if ever seen a response to a Select Committee's report that was weaker intellectually or more politically disingenuous."

Parliament declined to accept the findings of the committee or to take any action at all to amend the unfairness of the system. My Guess is that they did not want to rock the boat as the report concluded that Scotland got more than its fair share whereas Wales and NI were underfunded. Any attempt to cut the grant to Scotland would have added fuel to the growing desire for Independence which (this was in 2010) had to be avoided at all costs because the UK's debts were largely underwritten by the (at that time high) value of the oil yet to be extracted from the North Sea - 95% of it in Scottish Waters.

gillybob Fri 21-Oct-16 00:01:30

So are you admitting it is unfair then granny23 ?

Based only on the extract from the report you quoted from.

Granny23 Fri 21-Oct-16 01:16:40

Gilly I have never thought it was a fair way of calculating the funding required for the devolved assemblies/parliaments. One of the major flaws is that sum allocated each year is so variable that the devolved administrations are unable to plan ahead and budget accordingly. They are not allowed to overspend or borrow and any underspend must be returned to the UK Treasury. There are strict limits on how much money can be set aside for 'contingencies' e.g. last winter's extensive flooding.

Agreeing that Scotland gets slightly more per capita than Wales and NI does not mean that I think any of the 3 get a fair share.