Where The Money Goes: Scottish Edition

January 12, 2009 at 12:24 am

In Tales-Of-The-Blindingly-Obvious type news, readers will be unsurprised to discover that Scotland is poised to become the third most state-dependent country in the world, with only Cuba and Iraq spending more on public services.

By 2012, public spending is expected to rise to 67 per cent of Scotland’s gross domestic product (GDP).

The communist regime in Cuba spends just over 80 per cent of its GDP on public services, while in Baghdad the figure is 87 per cent.

A report yesterday by the Centre for Economics and Business Research shows that the Scots are royally stuffing English taxpayers and says that the growing public sector north of the border is unsustainable. Naaaaah, surely we haven’t been saying that for years. And years.

Under the Barnett formula, which is used to load Scotland’s public spending budget, they now receive £1,644 more per head than English taxpayers.

“Lord” Barnett, the Labour peer (not a proper one, just one of those Life thingies) who rigged the system 30 years ago, said ages ago that it was only intended to be a temporary measure and that he was amazed it had gone on for so long. He’s often called for the formula to be changed or abandoned and said the latest study backed that up. Fine, you created the mess and now you want to look like a hero by saying that it was a crap idea all along. Marvellous.

He said successive governments had failed to deal with the issue “for fear of upsetting the Scots”. This, of course, is code for ‘losing Labour seats in Scotland’ and ‘never getting a Tory seat north of the border ever again’. Liberals need not apply for entry to this paragraph for obvious reasons.

Barnett claimed that Alex Salmond is using the extra money on populist projects as part of a strategy to make the English demand separation from Scotland. TheEye is regrettably buying in to this – although a strong Unionist by instinct, the urge to tell those north of Hadrian’s Wall to make a mess of their own lives with their own cash is very strong.

A House of Lords select committee began looking into the Barnett formula last month.

The CEBR study puts Scotland 20th in the world league table of the highest public-spending governments, but the figure is expected to rise dramatically over the next three years.

It says that higher unemployment and a shrinking private sector means the country will become more reliant on public spending than any country with a sense of economic reality.

One of the biggest drains on taxpayers’ money is the public sector wage bill: a whopping £12 billion. Welfare payments last year came to a staggering £16 billion.

David Vance from the most excellent Tangled Web and Biased-BBC blogs has been known to stroll via this parish from time to time, and has a great interest in matters Northern Ireland. TheEye will check on a memory that NI actually benefits from Barnett more per head than Scotland, but would appreciate the voice of an expert in the Comments.

UPDATE: David at A Tangled Web is already there with the same story.
UPDATE2: David’s “Scotland The Grave” headline is much better than this one.