The economic case for the Union isn’t enough

There is a certain kind of critic of independence who hears the news that public funding for Scotland is 30 per cent higher than for England and sits back thinking: ‘Job done’. The latest analysis from the Institute for Fiscal Studies does indeed confirm that the Union is a bargain for Scotland. It finds that, while real-terms resource funding for the Scottish Government is two per cent lower per capita than in 2010 (the beginning of the Tories’ austerity experiment), the spending drop is lower north of the border than in England. Scotland gets more than £1.30 per person for public services for every £1 spent in England.

Almost all of that, the IFS tells us, ‘is explained by relatively high levels of funding from the UK government via the Barnett formula’ while net revenues from Holyrood-collected taxes ‘make only a marginal contribution’. Their economists say ‘Scotland’s underlying income tax base has performed relatively poorly compared to the rest of the UK since the devolution of income tax powers, reflecting slightly weaker economic growth’.