The English taxpayer is not the primary audience for the Scottish government’s annual Budget, but one wonders what they might make of today’s announcements from SNP finance minister Shona Robison. An extra £2 billion for health and social care, bumping the overall cost of that portfolio to just under £22 billion. An additional £800 million for social security benefits and £768 million for affordable housing, taking the total spend on social justice to £8.2 billion. Plus, £1 billion for roads, raising the transport budget to £4 billion; £355 million for two new prisons as part of the £4.2 billion justice and home affairs budget; and a boost of £158 million to the £4.2 nillion education and skills budget. Other goodies include free bus travel for asylum seekers, more breakfast clubs in schools, a tunnel-building programme, £1 billion more for local government, and an above-inflation nine per cent pay bump for public sector workers over the next three years. The Budget puts the Scottish government’s total managed expenditure for 2025-26 at £63 billion.
None of my business, guv’nor, you might say. And Robison would agree with you; she calls her spending plans ‘a Budget by Scotland, for Scotland’. But it’s not just by Scotland. £41 billion of that £63 billion comes from the Treasury via the block grant settlement while the rest is raised from taxes which Westminster has devolved to Holyrood. The block grant is set by the Barnett formula, a metric dating back to the 1970s and intended – in theory – to adjust funding for Scotland (and Wales and Northern Ireland) in proportion to increases or decreases in public spending in England. In practice, this funding model sees Scots enjoy significantly more in public spending per head. In 2022-23, per capita public spending in Scotland stood at £14,456, compared to £12,227 in England. Scotland receives more per-head spending than Wales, Northern Ireland, and every region of England except London. If you live in Scotland, you benefit from state expenditure 15 per cent above the national average; if you live in England, you’re three per cent below.
There are historical reasons for the disparity but it is also undeniable that the Barnett formula shortchanges England. In the past decade of constitutional debate, Unionists have fallen into the trap of making Scotland’s higher levels of funding the centrepiece of their case against independence. As I’ve argued before, this reduces the United Kingdom to little more than a set of fiscal transfers and gives a hostage to fortune should a future government decide to reduce the level of subsidy Scotland receives. It is also fundamentally unjust. While public spending will necessarily vary from region to region, depending on economic circumstances and social needs, having such stark differences between England and Scotland only adds to English feelings of resentment. There is a case to be made that, given how much Scotland benefits from the Treasury and how wedded its devolved government is to public expenditure, it is the English taxpayer rather than the SNP who should be the most vocal advocate of Scottish independence.
This imbalance is only sharpened by legislative devolution and the transfer of additional tax-raising powers to Holyrood. When Scottish Unionists boast that their nation has ‘the best of both worlds’ as part of the UK, English taxpayers are entitled to repeat those words with an embittered tone. I suspect this is only going to grow as an issue, especially if the UK is to remain in this era of low growth and reduced prosperity. With that will come entirely reasonable demands for a more equitable mechanism for distributing public expenditure, one that reflects England’s needs and not just those of the rest of the UK. No doubt English taxpayers would like to enjoy some of the largesse on display in today’s Scottish Budget. How much longer before they insist on it?
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