GEORGE Kerevan’s column in The National on Tuesday covers how the Scottish Budget works but leaves out the simple explanation for the shortfall, which is that the UK Government has decided that there will be one in the year of the next General Election (How the Scottish Budget works and why there is a £1.5 billion shortfall, Dec 19).
The longer explanation is that the shortfall in the Scottish budget is because the Scottish Government is now committed to spending more on devolved services than England.
The UK Government is cutting funding on services for at least the next five years, mainly by refusing to negotiate reasonable pay increases for workers in government and local authority services – nurses, doctors, consultants, teachers, council employees etc – and with squeezes on social security benefits.
READ MORE: Scottish Budget summary: Key points from Shona Robison's statement
The Scottish Government is funded by a “block grant”, a grant that effectively blocks the Scottish Government, with its annual balanced budget, from spending more on services in Scotland than the UK Government spends in England.
This block is achieved by returning to the Scottish Government from the taxes collected by the UK Government in Scotland only an amount equivalent, on a population basis, to what is spent on all devolved services in England.
Consequently UK Government austerity cuts in services in England automatically reduce the Scottish grant, a block on Scottish Government spending that ensures that UK Government austerity cuts in services are passed on in full to the Scottish Government.
READ MORE: Richard Murphy: The Scottish Budget is a mess – thanks to the Tories, not the SNP
The Scottish Government of course has the freedom to choose whether cuts are applied across the board, or spending on the NHS is protected by the cutting of spending on other services.
These are decisions forced on Scotland by a Tory government that would rather spend money on hiring private jets to make the most effective use of the Prime Minister’s time, like visiting a UK military base in Scotland, rather than on the education or health of the children in a nearby school watching the plane land.
John Jamieson
South Queensferry
NO doubt the media will focus on cuts to services or increased taxes arising from the Scottish Government’s latest “austerity budget” imposed by the UK Government. This slanted focus should not distract from the fact that Scotland and the rest of the UK are suffering from the reckless mismanagement of the UK economy by the UK Government, which has accumulated a debt of nearly three trillion pounds (£3,000,000,000,000), hundreds of billions of pounds of which have been wasted on an HS2 project that “will never be completed”, a failed test/track/trace service, and useless PPE purchased via a highly questionable procurement process (as evidenced with contracts awarded following the lobbying of Baroness Mone).
READ MORE: Income tax band for higher earners introduced
The gross incompetence of successive UK Governments is now costing around £300 million in debt interest every single day, with Scotland’s share roughly £25m per day for which we get nothing in return. Except for the very wealthy, everyone in the UK is essentially poorer since 2014, but if supporters of independence can stay focused on persuading the majority of voters of the merits of self-determination then at least the people of Scotland will have a chance to escape the moral, social and economic decline resulting from being bound to a terminally depraved Union.
Stan Grodynski
Longniddry, East Lothian
WILL the £1.5 billion shortfall in the Scottish Government finances be the “starting pistol” for the Tories to wind down the Scottish Parliament?
We have all seen and read about the deliberate actions of the Tories in Westminster with their Internal Market Bill. The overriding of political decisions made by Holyrood, sometimes by cross-party agreement. The deposit return scheme. The LGBT legislation overruled by Westminster.
READ MORE: Scottish Government slash millions from housing budget despite crisis
Hearing the disgusting rants by Penny Mordaunt, reiterating the “Scottish Government BAD” line, makes me feel more than a bit suspicious and worried that the budget shortfall and the possibility of the books not balancing may be just the recipe they are looking for “that it’s obvious they can’t look after themselves”.
Please don’t say “they” would never do that.
Ken McCartney
Hawick
LAST week you printed a letter from a reader responding to Lesley Riddoch’s film about Denmark. He said that it’s fine and well praising how Denmark does things, but the standard income tax rate is 45%.
Can we please compare like with like? We pay income tax at a certain rate. We also pay National Insurance, which is just more income tax that the government can pretend isn’t, though it is sucked into the Treasury’s black hole just like any other tax. We also pay council tax to our local authority.
READ MORE: Comparisons with Nordic nations should mention their high tax rates
In the late 1970s I worked for a short while in Denmark. I imagine the tax system is still substantially the same. The local authority set a local income tax; central government set a national rate. The local authority collected both and forwarded the appropriate amount to central government.
To compare the two systems you would have to add NI and council tax to the headline UK rate of income tax. I have no way to work out the figures, but for sure it would narrow the gap.
Of course Danes grumble about tax – who doesn’t? But I’m sure they would grumble even more if the standard of service provision was as poor as the UK’s!
Robert Moffat
Penicuik
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