Thursday, 4 September 2008

Bye, Bye Barnett

Plenty words on Scotland in that Brown speech, a draft of which was embargoed until now. The whole last third is about the strength of the Union, sweeping in everything from oil to Chris Hoy's three gold medals. (Hoy, to borrow the chancellor phrase, is getting p...ed off with being hi-jacked by politicians).

Its the usual Nat-bashing stuff from Brown until you come to a humdinger of a paragraph on the Calman Commission, currently examining the powers of the Scottish parliament.

Brown is due to say: “The Scottish parliament is wholly accountable for the budget it spends but not for the size of its budget. And that budget is not linked to the success of the Scottish economy. That is why we asked the Calman Commission to look at the financial accountability of the Scottish parliament”

Translated, it's the strongest signal yet that Brown has been convinced by the case for more fiscal autonomy for Scotland. It's not quite Devolution Max - a parliament responsible for raising and spending its own taxes - but Number 10 is not a roadblock to the development of devolution any more.

These lines about “a budget being linked to the success of the economy” look like the Prime Minister favours a system similar to the German Lander where federal parliament budgets are linked to the economic growth in their region.

The German system, on quick inspection, give the lander an incentive to grow their regional economy. In Scottish terms all this, I assume, would take place in a post-Barnett world. If you thought the Barnett formula for assigning the block grant to the Scottish parliament was complicated, hang onto your hat.

Scottish Labour MSPs feel the development of devolution is the needed to blunt the separatist sirens of the SNP come the next UK general election and the promised independence referendum. Long haul strategists in the SNP, who see independence as a process rather than one giant leap, may be pleased too.

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