Bill Jamieson: English sense we have made a killing from devolution . . it doesn't feel like it

Published on Sunday 24 January 2010 22:22

A £76 BILLION "devolution dividend"? What a pity it simply wasn't paid out in cash. Each person in Scotland would now have received a cheque for £13,800 to spend as we please. It would have taken us out of poverty, avoided all arguments over means-tested benefits and enabled Labour to pose as the party of superlative plenty, preventing the SNP in Holyrood from grabbing at least some of the credit.

Alas, it doesn't work like that. There's the government to feed. And health and education to look after. And benefits to be administered.

Today's "background paper" (sic) is no statement of the startlingly new but the latest salvo in what will become a furious exchange in the war of words between Labour and the SNP on Scotland's budget.

Labour claims that even with all North Sea oil credited to a Scottish Exchequer, there will still be a budget deficit. SNP analysts furiously dispute these figures. And anyway, who is the UK government to lecture Scots about budget deficits? The current Labour administration has a Double First in those – if not a Triple A credit rating for much longer.

The paper makes much of the 12.6bn spent by the UK government in Scotland on social protection – pensions, tax credits and the like. Total spending by the UK and Scottish governments could not be maintained, the report says, without a continuing fiscal transfer from the UK.

The SNP robustly maintains that Scotland with oil revenues would be in surplus, a feat that the UK government has rarely been able to achieve.

Both arguments, however, are backward-looking and do not reflect the impact of the near-collapse of Scotland's two giant banks and plunging tax revenues with the onset of recession. The world has moved on – and fiscally to neither party's benefit.

Nevertheless, the document will be a useful briefing sheet for Labour candidates in the election, but campaign managers should take care it doesn't fall into the hands of candidates in English constituencies. They may find in it a useful armoury of ideas for public spending reduction. Few things more rile those "core" English Labour voters than the sense that we Scots have made a killing from devolution. It certainly doesn't feel like that.

A 76bn dividend? Now where on Earth did it all go?