Binning Barnett


According to The Times, Sir Kenneth Calman, the chairman of the commission on Scotland’s constitutional future, has said that the Barnett formula, which used to calculate the level of public spending in Scotland, needs to change.

He's right. The existing formula is not so much a needs-based assessment of public spending requirements as it is a bribe to keep Scottish voters quiet. That's why Scotland gets more government money per head than relatively poorer parts of England.

But the best change would be to abolish the formula altogether, and make the Scottish Executive fiscally autonomous. The money they spend, they should raise themselves.

I'd apply the same principle to every level of government in the UK. When politicians rely on their own electorates for money, they are likely to be held much more closely to account. Such a system also encourages tax competition between jurisdictions – a good way of keeping rates low and government lean.