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Thursday, December 15, 2005

English subsidy to Scotland hits record high

What would we do without the Scotsman? The English national newspapers (not that they ever call themselves English) would never publish a story exposing the criminal amount of money diverted from English taxes to Scotland but the Scotsman is quite happy to do so.

The Scotsman tells us about the British government report on how much Scotland receives in subsidies from England. The figure has risen to an unbelievable £2,200 per person - about £11.3bn per year.

The subsidy is calculated using the Barnett Formula and comes directly from English taxes as the rest of the UK are net receivers from the UK Treasury, leaving England the only net contributor.

State expenditure in Scotland last year was £45.3bn, over half of the entire Scottish economy. They only raised £34bn in taxes though leaving the rest to be paid for by English taxpayers.

The SNP called the report statistical propoganda and repeated their usual argument that if Scotland was allowed to keep revenues from North Sea oil and gas (a large proportion of which was in English waters until the Scottish Raj took the arbitrary decision to move the maritime boundary in favour of Scotland) then Scotland would be subsidising England.

Let's see ...

Taxes Raised (£34bn) + Oil & Gas Revenues (£4.3bn) = £38.3bn

Income from Scotland (£38.3bn) - State Expenditure (£45.3bn) = -£7bn

Perhaps I'm missing something here? I don't understand how a £7bn deficit would translate into Scotland subsidising England.

The subsidy to Scotland in 1997-98 when Labour came to power was £1,055 per person. With the aid of a Scottish Prime Minister and Scottish Chancellor, the subsidy has increased by 208.5% even though inflation is below 2.5%.

The Scottish Executive has been pressing for fiscal independence for Scotland for some time now. They are presiding over a country that is effectively involvent and cannot survive without billions of pounds of subsidies from England. If they were company directors they would be have been banned from running a company by and would probably facing criminal charges over financial mismanagement.