'Barnett is dead, long live Barnett'

'Barnett is dead, long live Barnett'

The defence of the Calman Commission's financial proposals mounted by its advisory expert group (Opinion, 24 July) is nothing other than a blanket denial that their proposals are flawed.

It is not a response to the detailed criticisms that we, and others (including the Holtham Commission), have made. And while the battery of government economists employed to come up with a mechanism that actually works doubtless will do so, their efforts are only necessary because of the manifest defects in the original proposal.

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These experts aim to deflect. Shared tax bases were never part of our criticism; but the inability to smooth spending, tying current spending to current tax revenue receipts, and the fact that Scottish revenues will change every time UK tax parameters change are.

Correcting for these problems is why virtually every sub-national authority across the world using comparable financing mechanisms (including Canada) has an independent power to borrow. But giving Scotland similar borrowing powers was explicitly rejected by the Calman experts. Thus the revenue and spending instabilities cannot be avoided.

Worryingly, the Calman experts implicitly assert their proposals are "economy-neutral". Why? The Calman proposals involve a serious risk of reducing funding to Scotland's devolved administration to a significantly greater extent than elsewhere in the UK, and creating a degree of revenue and spending volatility with potentially significant adverse real economic effects.

Of course, these defects can be partially offset by simply adjusting the block grant to counter the impact of variable income tax revenues. And one expects this "fix" will be applied to stabilise Calman. But, in that case, the effective funding decisions are taken by those who determine the block grant - ie the UK government. Barnett is dead, long live Barnett and fiscal devolution is lost. Where is the accountability in that?


University of St Andrews


University of Edinburgh


There is a vast potential for Scottish public revenue capacity ignored in your feature by the Calman Independent Expert Group.This potential lies in a massive, completely predictable, untapped reserve of finance, situated totally within the territorial bounds of Scotland that, if accessed, could increase wages and profits, increase new business start-ups and entrepreneurial activity, reduce the need for state benefits, reduce production and labour costs, replace "taxed to death" by "death to taxes", achieve land reform without draconian expropriation and could take the Scottish economy out of recession (apart from the tax avoidance industry) to become the new invigorated "Celtic Tiger" that would rip apart the subsidy-junkie label foisted on us by English-vested interests.

This reserve lies all around us, is tangible, but not created by mankind, it cannot be hidden in an offshore account, or smuggled out in a briefcase. It is called, quite simply, the land - and the collection and return of the rental value we as a society have created upon it is the route to all of the above


Armoury House

Blair Atholl, Perthshire