Reply to: New students 'face £23,000 debt'

[expat]

You may put it that way round, that is part of the reason for my question. I do not see it quite a s simply as some and would agree that it is somewhat more complex than simply the English subsidising the Scots.

I think your dismissal of Barnett is as wayward as Cyber Tossers incessant ranting about it.
It was meant to be a short term measure and even Barnett (the Scot resposible) states that it is unfair to the English who (in the last set of figures) receive 1.5K per less than the Scots.
The situation is made worse by the fact that some of the monies used in the calculations are only paid by the English. For instance, University top up fees. As the fees paid in England are used to fund Universities the income is included in the Barnett formula when calculating how much to pay the Scots, yet the Scots make no such contribution.

Your dismissal of VAT, duty and NI is also a little disingenious. The rates for these "taxes" are the same across the UK are they not? If you took a standard citizen in either Country who earned 30K and smoked 20 a day and drank 20 pints a week (and all other things equally) then the tax take would be exactly the same from each.

I'm not in big disagreement with you in general; this impression may come from my trying to address you in the same post as Cyberman!

I do think I'm right about the universities though, or rather about the students, since it is not a case of funding the universities (this is the same in both countries) but of funding the students' fees: Scotland chooses to, England chooses not to. Since England won't fund a Scottish student in England, Scotland likewise won't fund an English student in Scotland. My point is that this is not addressed against the English specifically, it is simple reciprocity.

If you think that the UK is and should be one country rather than two, I can see that you won't like this: but it is a predictable consequence of devolution.

Also, I don't dismiss Barnett per se, what I dismiss is the simplistic argument that it is a subsidy pure and simple.

Your are right about the taxes. However, citizens are not standard, and Scots do on average contribute more than their share of these to the Westminster exchequer. Whether that counts for anything usually depends on what point one wants to make; let it go as irrelevant, the point is still there that Barnett is a way to get Scots' tax money back into funds for Scottish expenditure, now that spendng has moved to Edinburgh whil taxation has stayed in London.

The English may well be effectively subsidising the Scots, because of the exact amount of the Barnet payment. I suspect they are, but we can't tell because we don't get our hands on all the figures. My point is that they might be, but they aint necessarily.

[The Lone Gunman]

Well, as I say it's not a simple "let's cut council spending and we can do free uni", it's a whole parliamentary budget, reflecting one hopes the wishes and priorities of the people. I don't know why England does not do it, or where England spends the money instead (if I may put the question that way round?)..

You may put it that way round, that is part of the reason for my question. I do not see it quite a s simply as some and would agree that it is somewhat more complex than simply the English subsidising the Scots.

BTW the Barnett Formula is a Red Herring that Cyberman likes to wave around from time to time. Essentially it exists because some powers, and therefore expenditure, are devolved to Scotland, but the raising of the tax that pays for them remains with Westminster. Before devolution, Westminster taxed and Westminster spent. Now Westminster taxes and Holyrood spends. Therefore Westminster has to give to Holyrood the money that it formerly spent, but now does not itself spend.

It is not a subsidy, it is a movement of funds from taxation to expenditure, become more visible now that they are not done from the same place. Which itself is an anomaly, fixable by independence.

I think your dismissal of Barnett is as wayward as Cyber Tossers incessant ranting about it.
It was meant to be a short term measure and even Barnett (the Scot resposible) states that it is unfair to the English who (in the last set of figures) receive 1.5K per less than the Scots.
The situation is made worse by the fact that some of the monies used in the calculations are only paid by the English. For instance, University top up fees. As the fees paid in England are used to fund Universities the income is included in the Barnett formula when calculating how much to pay the Scots, yet the Scots make no such contribution.

Your dismissal of VAT, duty and NI is also a little disingenious. The rates for these "taxes" are the same across the UK are they not? If you took a standard citizen in either Country who earned 30K and smoked 20 a day and drank 20 pints a week (and all other things equally) then the tax take would be exactly the same from each.

[Alf W]

The Scottish pay far more in alchohol and cigarette duty per head of population than the rest of the UK.

[OwlHoot]

Just read up on the Barnett formula which gives each Scot an extra 1,000 pounds a year subsidy !!

Worth it to hold the Union together.

[Mich the Tester]

This would not have happened under the tories

[RichardCranium]

The north is subsidises nothing anymore

I assume these figures are helpful.

2.1 Supply and Use Tables for the United Kingdom, 2007

Domestic output of products at basic prices in £m:

Finance & business services ... 689,524
Manufacturing ................. 418,504
Distribution & hotels ......... 362,203
Education, health & social work 272,041
Construction .................. 211,019
Transport & communication ..... 190,020
Public administration & defence 131,498
Other services ................ 103,688
Electricity, gas & water supply 069,615
Mining & quarrying ............ 043,826
Agriculture, forestry & fishing 020,694

[Moscow Mule]

The calculation for this is actually wrong.

It's not just £23k in debt, but it's also 3-4 years of potential lost earnings and opportunity/investment/foot on ladder in property lost etc..

For me I don't think Uni is a worthwhile investment any more.. I think there are far better 'alternatives' for your education/training than a degree.

I tend to agree, but if you want to be a nurse or a teacher (or any number of other professions) then you have to go.

If you're just going "to get your degree" I don't think it makes financial sense.

[RichardCranium]

the Barnett Formula exists because some powers, and therefore expenditure, are devolved to Scotland, but the raising of the tax that pays for them remains with Westminster. Therefore Westminster has to give to Holyrood the money. It is not a subsidy, it is a movement of funds from taxation to expenditure

Thank you for that explanation.

I too had been led to believe England 'subsidised' Scotland through this process.

[chris79]

The calculation for this is actually wrong.

It's not just £23k in debt, but it's also 3-4 years of potential lost earnings and opportunity/investment/foot on ladder in property lost etc..

For me I don't think Uni is a worthwhile investment any more.. I think there are far better 'alternatives' for your education/training than a degree.

[Not So Wise]

Oh rubbish: most of London's salaries come from wealth generated in the rest of Great Britain. It's just administered in London, but it's meaningless to say that London subsidises the rest of the UK: without this rest of the UK, there wouldn't be much in London. Britain's wealth subsidises London.

Not to knock the rest of the UK but what wealth does the rest of the UK really generate anymore?

Until the late 70's/ early 80's I would fully agree with you, the south lived high off the sweat of the North but these days? This country butchered it's resource industry, it's manufacturing industries and it's farming industries all which were based up north, now it's all about services and financials (or as I call them, "making money out of nothing industries"), which are all based in the south

The north is subsidises nothing anymore

[expat]

Not looking for an us and them answer, just a sensible answer. Yours go some way to explaining it.
I do not begrudge the Scots their free education, I am more interested into why we can not do the same in England.
There must be some sort of reduction in service elsewhere in Scotland though to pay for it. Either that or the English are paying over the odds for non required services.

Well, as I say it's not a simple "let's cut council spending and we can do free uni", it's a whole parliamentary budget, reflecting one hopes the wishes and priorities of the people. I don't know why England does not do it, or where England spends the money instead (if I may put the question that way round?).

BTW the Barnett Formula is a Red Herring that Cyberman likes to wave around from time to time. Essentially it exists because some powers, and therefore expenditure, are devolved to Scotland, but the raising of the tax that pays for them remains with Westminster. Before devolution, Westminster taxed and Westminster spent. Now Westminster taxes and Holyrood spends. Therefore Westminster has to give to Holyrood the money that it formerly spent, but now does not itself spend.

It is not a subsidy, it is a movement of funds from taxation to expenditure, become more visible now that they are not done from the same place. Which itself is an anomaly, fixable by independence.

[AlfredJPruffock]

So if you stay for 3 years in scottland you can get free education
is it that simple ?

I looked into this some years back - unsure if they have since changed the goalposts - but the residency crtieria was certainly the case then as I realised I would not receive 'free' education as I had been working abroad for a few years- and I am from Scotland.

[expat]

OK, I'll do my reaction-to-Cyberman-on-Barnett just one more time:

You go to the office every day. You work all day. You eat lunch in the canteen. You hand over cash to pay for your lunch. No other visible transfer of wealth takes place at the office. Conclusion: you are subsidising the client.

It's a bit like that: the Barett Formula is one little bit of the large flow of money around the economy. If you look only as far as your nose, it may be the only flow that you see between the UK and Scotland. But that's as perspicacious as missing the fact that you get paid for working in the office, quite a lot more than you pay for your lunch.

When you count the Barnett Formula, please also count the flow of taxes from Scotland to the exchequer. One calculation put the estimated payments of VAT per head for Scotland as being more than that for England, by an amount that covered the Barnett amount on its own. That's just VAT. Of course it is estimated, HMG will not publish it.

That's just VAT. National Insurance contributions likewise, Scotland pays more per head than England. As for alcohol duty, petroleum duty, etc.....

and some more subtle support. What about the nuclear power stations in the south of Scotland? Totally unnecessary fr Scotland, needed for England's consumers. But the cost of building them, not to nention decommissioning them falls on the electricity consumers of the region they are in. Barnett? Don't make me laugh. this is exploitation.

I hadn't meant to go this far when I started, but alas there is much more to be said.

[Andy2]

I dont think you are wrong - if you are from Scotland but have been abroad for more than three years then you are no longer 'resident' in the eyes of the Educational Grant folks - so it is a question of residency rather than nationality.

So if you stay for 3 years in scottland you can get free education
is it that simple ?

[Cyberman]

Not looking for an us and them answer, just a sensible answer. Yours go some way to explaining it.
I do not begrudge the Scots their free education, I am more interested into why we can not do the same in England.
There must be some sort of reduction in service elsewhere in Scotland though to pay for it. Either that or the English are paying over the odds for non required services.

You must be joking !!!