Tartan dividend pays off for Scots

The tartan dividend, the difference between Whitehall spending in England and Scotland, has risen by two-thirds over five years.

The Treasury's latest statistical analyses, published as Parliament broke up on Thursday, show that identifiable government spending in 1995-96 was pounds 3,743 per head in England, compared with pounds 4,614 in Scotland. Spending per head in Northern Ireland was pounds 5,139, and for Wales it was pounds 4,352.

In the wake of last month's row over devolution, Michael Forsyth, Secretary of State for Scotland, suggested that if the people of Scotland voted for a tax-raising parliament under a new Labour government, a future Tory government would review the question of Scottish funding, "with very dramatic and adverse consequences".

Mr Forsyth warned: "At the moment, Scotland is about 30 per cent better- funded per head than England." It was suggested that Scotland could face a pounds 6bn penalty. In fact, that exaggerates the true position, as shown by the latest Treasury analysis "of general government expenditure by country and region".

The differential between England and Scotland was pounds 871 per person for 1995-96, a difference of 23.3 per cent, compared with pounds 524 per head in 1991-92, a difference of 17.6 per cent. That means there has been an increase of two-thirds in the differential between the two countries since 1991, but the difference is less than the 30 per cent mentioned by Mr Forsyth.

The biggest spending gaps were for housing, with per capita spending pounds 142 for Scotland, compared with England's pounds 68. But within the English regions, the difference was even more marked, with East Anglia, the South- West and West Midlands all recording per capita spending of less than pounds 30 on housing.

The biggest differential of all went to Northern Ireland's budget for trade, industry, energy and employment budget, which was three times larger than the UK average: pounds 293 per head, compared with pounds 91.