David and the troublesome Barnett formula

AT THE end of this week David Cameron will be in Scotland to address the party faithful at a one-day gathering in Perth. It should be a relatively easy affair as no-one within his ranks is going to pose any difficult questions so close to a general election, especially one that Conservatives think they can win.

The journey north is not without its challenges, however, for the day before Mr Cameron will speak at the Scottish Press Fund Lunch in Glasgow and it is there that he will face the most scrutiny from an audience of hacks keen to look into the whites of his eyes and see what he is made of. It will be his best, and probably last, opportunity to set the tone of his campaign in Scotland and how he handles it will probably decide how the Conservatives' prospects in Scotland are viewed by this influential group and how their newspapers contextualise the coming election.

Daunting it may be, but the Press Fund Lunch need not be a graveyard for political leaders. Tony Blair would often go into it with Labour having been attacked and his leadership looking seriously shaky only to emerge a couple of hours later with the doubters remarking about his genius at communication. They might not agree with his every word but they were reminded he was a class act and that he still would have the beating of anyone the Tories could put up against him.

Now the Tory leader has to do the same: convince the sceptics that he is prime minister material.

The problem remains: what should he do about Scotland? There is no shortage of strategies; unfortunately they all emanate from England, either from his advisers or his backbenchers. Mr Cameron knows the best solution would be one conceived and delivered in Scotland – but the Scottish leadership stubbornly refuses to devise a strategy for fear of splitting the party down the middle.

The issue that haunts the Conservatives is whether or not to give the Scottish Parliament new financial powers as the trade-off for reforming the Barnett formula.

On one side there are the activists who do the hard work canvassing who recognise that the Scottish Parliament will remain politically immature until it raises most of the money it spends. The majority of Tory MSPs believe this too but have agreed to keep mum until the election. On the other side are the Tory candidates for Westminster and the members who never liked devolution in the first place, who remain resistant to any idea of making the Holyrood institution more self-sufficient. Why go through all the trials and tribulations of getting to the House of Commons only to vote away any remaining influence Scottish MPs might have?

Mr Cameron cannot ignore the issue. With the polls narrowing recently, Scotland is important to the Conservatives because they will need every MP they can muster.

Forget the nonsense of the Conservatives beating the SNP into second place behind Labour in Scotland, the reality is that they would be doing brilliantly to get half a dozen seats. Five more Scottish MPs than just the solitary David Mundell, and probably all at the expense of Labour too, could make all the difference in Cameron avoiding the bargaining that would ensue from a hung parliament.

We can expect the Barnett formula to be changed under the Conservatives – for they have said as much – and the financial plight of the UK is such that spending cuts can no longer be avoided, whoever is in power.

Political journalists know about these issues but rarely bother to write about them because they think, probably correctly, that most Scots couldn't care less – but that may change. The hacks hear the grumblings of the Tory MSPs on a daily basis and now they fear they will be the fall guys for the likely political backlash that will come their way next year if David Cameron and his Chancellor are given the opportunity to wield their axe on public spending.

The solution – to let Scots choose to vote for politicians who can deliver higher Scottish taxes rather than suffer a share in Britain's spending cuts seems relatively simple. It would also allow Cameron to look like he is pro-Scottish. Unfortunately the vow of silence on what to do, epitomised by the party's unwillingness to make a submission to the Calman Commission that it was so eager to co-sponsor, means that any changes to Barnett will look grudging and spiteful when they could have been presented as a political bonus.

Unless Mr Cameron chooses to take control of the issue on Friday rather than have it dictated to him by Annabel Goldie, who only wishes for a peaceful life, he shall have to dance around the issue of what will be cut from the Scottish block grant. He will leave the lunch with the journalists still feeling thoroughly hungry, harbouring doubts about his ability to confront the tough choices and his ability to run his party, never mind the country. If David Cameron doesn't grasp the nettle that is more tax powers for Holyrood he might as well settle for two, maybe three MPs and a hung parliament into the bargain.

• Brian Monteith is policy director of ThinkScotland.org