The Pin Factory Blog

The Barnett formula, which allocates UK government money to Scotland, has become a source of real resentment in England. Its effect is that Scottish residents receive over £1300 more government spending per person per year than their English counterparts. The disparity is not easily explained by different levels of wealth – the North-East of England is poorer than Scotland, but receives less government funding. Yet successive governments have stuck to the formula, claiming it shares out public funding on the basis of need.

But now Lord Barnett, the former Treasury chief secretary who devised the scheme, has dismissed these assertions in an interview with Holyrood magazine, saying Gordon Brown is simply too scared too overhaul it for fear of upsetting Scottish voters. Lord Barnett went so far as to say that it was not really a formula at all, that there was "nothing scientific" about it, and that he concocted it "almost on the back of an envelope" based on "approximate" populations figures in the 1970s. It's a pretty damning display of honesty, isn't it?

Lord Barnett is absolutely right to call for a thorough review of the system of allocating funding. The system is certainly unfair to English taxpayers, and I don't think it does much for the Scottish either. The fact that the Scottish Executive only spends money that is allocated to it – rather than having to raise revenue itself – entrenches high public spending, encourages waste, and discourages fiscal responsibility, as well reducing accountability.

The most sensible solution is to make Scotland fiscally autonomous. According to my own back-of-the-envelope calculations, the Scottish Executive could easily finance all devolved spending if it set, collected and kept the proceeds of income tax, corporation tax and VAT, and took a share of North Sea Oil Revenues. One additional bonus of such a system would be the introduction of tax competition within the UK. If Scotland cut its corporation tax rates to Irish levels, for instance, it would put a lot of pressure on the Westminster government to follow suit.

The SNP administration at Holyrood is known to be keen on the idea, so watch this space.

87. "People should not be allowed to adopt children unless they meet the highest possible standards of parenthood."

The problem with this is that most parents probably don't meet the highest standards of parenthood; they are likely to be average or near average. Nobody wants to have children adopted by bad parents, but by insisting on the highest possible standards we severely restrict the number of possible homes they might go to.

Children adopted into almost any sort of family do far better in life than those raised in institutions. On measures of educational attainment, employment, crime, mental illness, the adopted ones do better. Despite this the state seems to prefer to keep them in institutions rather than let them be adopted by less than perfect families.

Arbitrary and bizarre standards are used to justify refusal. In recent years these have included not allowing a mixed race couple with children to adopt a mixed race child. The grounds given were that the family was so well-adjusted and happy that the child would gain no preparation for the racism it might encounter later. Another middle-aged couple were turned down because they had too many books in the house, and the officers thought the child would not therefore have a "normal" upbringing, presumably meaning that it might grow up too posh for its own good.

Despite a huge number of people wishing to adopt, there are also huge numbers of children awaiting adoption. Of course it is right that children should be protected from abuse, and that careful screening should eliminate anyone involved in paedophilia or violence. But the standards sought from prospective parents seem to go far beyond the protection of children, and seek conditions not met in many families with children of their own.

The situation is such that many of those wanting to adopt now go abroad to find children, while thousands of UK children remain in institutional care.

With the economy souring and budgets getting tighter, people are cottoning on to fact that, often, the government's inflation figures do not seem to correspond to real life. The reason for this is the way inflation is calculated – by measuring the price of a basket of particular consumer goods.

On the one hand, yes, the basket reflects what we actually buy. We spend more on TVs and cars than we did in 1950, so the weights of all these things have risen. But it's only an average: reflecting what the whole nation buys, on average. It may not reflect individual circumstances.

Older people, for example, spend much more on heating than the average. And things like that have risen in price fast. They spend less on clothes, cars and computers, all of which are getting cheaper When you look at the basket of goods they actually buy, you find that the rate of inflation they suffer is nearer to 9.6 percent than 2.6 percent.

The same is true of homeowners, who have seen sharp rises in council tax and higher mortgage payments. And they are more likely to buy services than less well-off people, and those have risen in price too.  This is why the middle classes rightly complain that inflation seems much higher than the Chancellor and Prime Minister advertise.

That American recession/depression. You know, it looks like the falling dollar is boosting exports, curbing imports and taking up the slack. Just like, umm, economic theory would predict.

The most important question in climate change science is, what is climate sensitivity? As several note.

Yes, there really are ten famous Belgians (for a given value of "fame"). 

There's a move to bring plea bargaining to the English judicial system. Perhaps not the wisest of ideas.  

Waiters Unite! There is a decent tip on offer if you should happen to keep the wine glass of one or two favoured customers. 

Enoch Powell on a pogo-stick? 

And finally, the newspaper punctuation correction to beat all newspaper punctuation corrections and it's a tough job but someone's got to do it.

Gordon Brown, our increasingly beleaguered prime minister, seems to have a rebellion on his hands over the abolition of the 10 percent starting rate of income tax.

When he announced the measure in his final budget as chancellor hardly anyone on the Labour benches noticed, so bowled over were they by the reduction in the basic rate from 22 to 20 percent. The Tories were quick to say that this tax cut was a tax con, but it looked like Brown had managed to get away with it. But with the change about to come into effect and the mood on the Labour benches 'sulphurous' (to quote Kate Hooey, the former minister), it doesn’t look like that anymore. 

It was always a curious move for a Labour chancellor – who had himself introduced the 10 percent starting rate – to make. Cutting the basic rate of tax – good idea. Simplifying the tax code – good idea. But financing the changes by increasing taxes on the poor (anybody earning under £18,000 who doesn’t have dependent children is set to be worse off) really doesn't make a lot of sense. As a leader in the FT put it:

The prime minister stole from Peter to pay Paul. Peter has woken up to the fact.

The ASI's long-standing campaign for income tax simplification would have involved abolishing the starting rate of tax too, but we would balance things out by raising the personal allowance quite substantially – to at least £12,000 – so that someone earning the minimum wage would be taken out of the tax net altogether. Come to think of it, I'm not sure why politicians aren't keener to take that suggestion up. Surely it's the perfect tax reform? It leaves everyone better off, but the lower your income, the greater the benefit.

Anyway, things are really starting to look grim for the prime minister, as Rachel Sylvester showed in yesterday's Telegraph, with infighting, indiscipline and a chronic lack of direction taking hold. The point-of-no-return may not have been reached yet, but it can't be too far off.

86. "We should extradite any citizen accused of crimes by overseas prosecutors."

The readiness of British governments to act at the behest of overseas prosecutors has been a disturbing development. It has included extradition to face trial abroad for actions done in the UK which are not criminal here. Countries have very different approaches to law and legal rights. US prosecutors, some seeking popularity to boost political careers, have a habit of using criminal law in what would be civil actions in Britain, especially in relation to business actions. Their habit of parading those accused in chains in order to influence future jurors is not one that sits well with the presumption of innocence. Their regular use of plea-bargains to allow some of those accused to buy immunity by testifying against others is not conducive to honest testimony.

Even more disturbing is the British government's decision to allow UK citizens to be extradited to other EU countries, possibly ones they have never even visited, to face trial for actions which are not illegal in this country. Under this procedure, a person appearing on a local radio station might be extradited to Malta to face trial there because some prosecutor there regarded what was said as a breach of some obscure Maltese law.

The pretence is that the EU is now a unit with a common standard of law. This is simply not true. Each member state has had its own approach to law, and many have widely different practices and different degrees of respect for people's rights. The trial of UK plane spotters in Greece for espionage illustrated some of these radical differences. UK citizens should not be at the mercy of capricious foreign prosecutors.

Many fought for their rights under law in the UK, and some died. It is entirely wrong that these rights should now be so carelessly given away in the name of cementing international relationships.

More selections of those old Tory posters mentioned above (or, erm, below, given the reverse order of blogs....). Here and here. There's some thought that the immediacy, the force, of the messages has declined over the years.

Here's the numbers on one country that has successfully dealt with climate change, emissions and keeping the lights on. Alternatively, here's what happens when you go nuclear.  

More on Ms. Abbess, that story that Tim W noted above (umm, below?).

One of the seriously important questions. As long as we're not insisting that all should be exactly equal, well then, how much inequality is too much? 

The essential difference between libertarians and the rest: libertarians do not invest government with higher moral status. 

The figures are in: private schooling really is cheaper than government provided. 

And finally, if you think tax rates are too low, you can always voluntarily pay more. (As a public service to Guardianistas, here in the UK make your cheques payable to "The Accountant" and post them to 2 Horse Guards Road, London).