Scottish round-up, 26 January 2010

After some quiet weeks around Christmas and into the New Year, there are some interesting developments.

First, the Scotland Office yesterday issued a ‘Background Paper’ claiming that since 1999 devolution has produced a ‘dividend’ to Scotland of £76 billion.  It has reached this staggering figure by cumulating the total annual ‘fiscal deficit’ in Scotland shown in Government Expenditures and Revenues in Scotland since then.  In truth, this  isn’t a ‘devolution dividend’ but a ‘Union dividend’, as it comes from the way the block grant and formula system works, for devolved matters, as well as identifiable spending on non-devolved ones (notably social security).  If you simply cumulate such numbers over a number of years, of course they look large.  There do appear to be some dubious features of the paper on the statistical level – for example, how exactly were defence costs apportioned?  The paper says this was ‘proportionate’; does that mean on a per capita basis, or something else?  And what about the flaws in the older editions of GERS, many of which haven’t been corrected retrospectively as the quality of the data in GERS has improved? As the size of the fiscal deficit has steadily reduced as the data have improved, this may well exaggerate the gap from the first years of devolution.

The Background Paper (of greatest interest to statisticians) is available here, and the Scotland Office’s news release about it is here.

What’s more interesting here are the politics.   This is an understandable attempt by the UK Government to remind Scottish voters of the ongoing importance of the UK aspect of how they are governed, both in the sense of the role of non-devolved matters (like social security) and in the generosity of public spending in Scotland.  It’s also an attempt to put calls for independence on the back foot by emphasising how generous the present arrangements are.  It’s also intended particularly to hit at SNP calls for ‘full fiscal autonomy, which are predicated on the idea that Scottish tax revenues could (more or less) pay for the existing sort of welfare system.

It’s dangerous in two ways, however.  First, it leaves the UK Government exposed if the SNP should shift ground further about the nature of a future tax system.  Second, it draws the attention of voters in England to the extent to which there’s a transfer to Scotland, which is hard to justify on grounds of need (see, for example, the bottom of the Scotsman‘s news item on the Paper here) .

The second development  is the interview Jim Murphy gave to the new Caledonian Mercury indicating that Labour’s strategy in the general election would be to ignore the SNP and treat the Tories as the main threat.  This too is dangerous.  At best, this means that Labour will challenge the SNP in the Scottish electoral arena, but not the Scottish one.  As it will still have to deal with the SNP at Holyrood, and as the Scottish Government, this just risks further polarising intergovernmental relations.  Even if it works in the short term, it undermines longer-term goals (and Labour’s achievement in putting devolution in place).

Third, there was a wee stushie last week about security at Balmoral, and a public footpath across the estate – reported here.  The point about the leakage of correspondence made by Alex Salmond is the interesting constitutional point – if UK Government departments can’t respect the confidentiality of such correspondence, as required by the Memorandum of Understanding, why should devolved administrations comply with it either?

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Filed under Devolution finance, Intergovernmental relations, Labour, Scotland, SNP

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