VOTERS in Scotland and Northern Ireland have escaped nearly £1billion-worth of
spending cuts because of the “flawed” way that taxpayers’ cash is
distributed around the UK, according to a leading think tank.
A report for the Institute for Fiscal Studies called for the controversial
Barnett Formula to be reformed when greater tax-raising powers are devolved
to Edinburgh.
They said that the Scottish Government was spared cuts of around £600million,
while the Northern Ireland Executive’s budget was protected to the tune of
£200million.
In the run-up to the Scottish independence referendum, David Cameron, Nick
Clegg and Ed Miliband all vowed to protect the Barnett Formula.
But the IFS report’s author David Phillips said the loophole which gives
Scotland and Northern Ireland more cash should be closed.
He said: “It is important to get the interaction between devolved taxes
and the Barnett Formula right.
“Whatever is decided about which taxes should be devolved, it is crucial
to get right the seemingly technical issue of exactly how changes in
revenues from those taxes translate into changes in funding.”