Thirty years on: an invaluable lesson for this year’s referendum.

The release today of Thatcher government papers from 30 years ago shows an absolutely staggering contempt for the people of Scotland, with the government attempting to secretly cut billions from Scotland’s block grant over a few years. And not just cut it – cut it and attempt to cover up the fact. And in the midst of the disembowelling of Scotland’s heavy industries.

That George Younger, the then Scottish Secretary, appears to have managed to ‘hold back’ the desired cuts, seems to be less down to his own disagreement with the fundamentals of the proposals and more down to fear for his own neck if it ever got out.

The Barnett Formula already takes into account levels of public spending in England – if cuts are made in England, they are made in Scotland’s grant too. Any other cuts, which is what these secret Thatcher government debates were about, would have been on top of any pre-existing cuts brought about by the pegging of Scottish grant monies to English spending. Figures talked about by senior Ministers were between £500 million to  £900 million per year. This from a block grant of around £6 billion/year at the time.

If this had been successful, just imagine the effect it would have had on Scotland. And this would have had longer repercussions – after all, which subsequent government would have bothered to correct the block grant and bump the figure back up to where it should be, when they could put that money either towards another department or what might be seen as cuts in taxation. The effect would not just last for those years of Thatcher government – they would be cumulative and devastating, and we’d still very much be able to see and feel the consequences today. 

That was thirty years ago, but what it shows is just how vulnerable Scottish public finances are when we continue to rely on being given back our own taxes by those behind the closed doors of Whitehall.

The Barnett Formula is already at huge risk from disgruntled politicians at Westminster, who are increasingly speaking out against what they perceive to be as a pandering to Scotland, despite the fact that Scotland has consistently provided more in HMRC tax receipts than it has received back or had spent on it’s behalf. And the Barnett Formula isn’t even contractual – it’s an agreement only, still wholly susceptible to the whimsy of the UK Government.

This all ties in with the independence white paper proposal regarding improved pre-school education. What guarantee would we have that any extra income tax generated by allowing parents to work more would come back to Scotland to fund this policy, bearing in mind that income tax goes directly to UK HMRC? Absolutely none at all – which is why it is a post-independence pledge, not one that can be acted upon within the devolution framework. 

As history has shown today, we’re at the mercy of UK Government politicians who can at times act like crooked accountants, pocketing wads of their client’s cash when they think nobody is looking.

Of course, it would be foolish to suggest that we will be invulnerable to dishonest politicians in an independent Scotland too, but they will be directly accountable to Holyrood and to us, the people – not hidden behind thirty years of secrecy, cobwebs and dust.

There is only one way to ensure that the people of Scotland have the tax revenues raised in Scotland, spent in Scotland. And there’s only one way to guarantee that no future government can again attempt to pull the wool over our eyes, as Thatcher’s government so nearly did. That way is to vote Yes in September, and bring full fiscal responsibility and accountability to Scotland.

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