Last week we had a budget statement from the chancellor. Note I said “a budget statement” and not “the budget statement”. I’m certainly old enough to remember when there was only one budget a year and most folk looked forward with apprehension to how much the chancellor was going to slap on drinks and smokes. The media were full of suggestions for days in advance about what should be announced and, afterwards, the analysis of winners and losers went on for more days. Now we seem to have a budget announcement about every month and anything interesting is leaked to the media by the Treasury in advance of the statement so everyone has a decent excuse for sleeping through Phil’s speech.
For Scotland, the best news appeared to be an extra £2bn on the Scottish block grant and the decision to remove the VAT liability from Scottish emergency services. However, a more careful look at the announcement shows a slightly less optimistic view.
Firstly, looking at block grant, the £2bn (actually £1.97bn) is the total effect on Barnet consequentials of the UK spending changes announced in the Budget for the four year period from 2017 to 2021. It includes over £1.1bn of financial transactions, money which has to be repaid to the UK Treasury. Let’s call it a loan. Perhaps Scotland only gets given the money so that Westminster can have the fun of taking it back, now that we don’t have a Labour First Minister to return money they can’t think of anything to spend it on (© Jack McConnell et al, 2000-2007) Of the remaining approximately £850m, £500m are increases in capital spending, leaving only £350m for additional day-to-day spending. Of course, that’s the raw cash terms amount, but that increase represents a reduction when inflation is taken into account. So perhaps not just as good a settlement as the UK Government, and of course the Tories and the BritNat media, would try to make us believe.
Secondly, the VAT change. In the period since its inception in 2013, Scottish Police and Fire have been the only UK forces not able to reclaim VAT, costing the Scottish emergency services well over £100m. Over this whole period, the Scottish Government and the SNP MPs have constantly pointed out the unfairness of the situation, but have been more or less ignored by the UK Government, whose only response had been to say “Suck it up, Scotland. We told you we would screw you, so you can’t complain now”.
So, what has changed? The cynical amongst us (not me, of course) might point out that the only change is the election of a few more Tory MPs. Hammond, somewhat pathetically, tried to justify his decision to remove the liability as a consequence (more consequentials?) of the new Scottish Tory MPs being able to explain the problem in such simple language, that even he could understand. Well, I have heard that the new Scottish Tory MPs are quite good at being simple. Given they have Fluffy Mundell, the master of simple, as their mentor, I suppose it’s no real surprise. However, I’m not sure what bit of “It’s no fair” was proving difficult for Hammond to grasp.
Of course, there’s another interpretation that can be placed on the reluctance of the UK Government to do the right thing. In 2011, Scots elected a majority of SNP MSPs to the Scottish Parliament, something that the voting system was expressly designed to prevent. It wasn’t supposed to happen and it was baad. To make matters worse, in 2015, Scots elected a majority of SNP MPs to the UK Parliament. That was even more baad. It was very baad. The aforementioned cynics might even suggest that the Tory government’s decision to retain the VAT liability had more to do with punishing the Scots for having the temerity to elect a government that Westminster and the BritNats didn’t approve of, rather than any rule based logic. In fact, the change requested by the Scottish Government was little different to the rule introduced by Westminster in 2011 to make schools which became academies exempt from VAT. OK for English schools, but not for Scottish police and fire services. In fact, the same cynics could argue that Westminster recognised they were wrong and took the first available politically expedient opportunity to get out of an increasingly embarrassing hole. However, they were not sufficiently embarrassed to return the money they had stolen since 2013. Perhaps that would have really given the game away.
All this comes at a time when Brexit could change everything, but the establishment have a cunning plan to stop folk thinking about bad Brexit stuff. Can you guess what that is, readers? Come back shortly for an update.