The Vote for Europe: EU aid for Scotland `goes astray'

SCOTLAND IS losing hundreds of millions of pounds in European Union aid every year because it is being retained in England, the Scottish National Party claimed yesterday.

This year Scotland would miss out on more than pounds 200m in its EU entitlement, said Andrew Wilson, the party's finance spokesman. Since 1993, he estimated that pounds 730m in EU receipts had gone astray with a total of pounds 2.5bn potentially having been lost since 1975.

The issue, which the SNP seems to have become aware of only recently, promises to play an important part in the party's campaign for the elections to the European Parliament on June 10.

Mr Wilson said: "It demonstrates the importance of Scotland being independent within Europe so that we can look after our own interests properly."

Scotland is awarded, on average, 20 per cent of EU special grants to the UK because the country is poorer than other parts of Britain. However, said Mr Wilson, UK grants from the EU are distributed, like the rest of government funding, according to the Barnett formula based on population. Thus, in 1999, for example, Scotland was awarded 8.7 per cent of distributed funds, well short of the percentage earmarked in Brussels.

Mr Wilson said that the policy, concealed in the Byzantine intricacies of government spending, broke the principle that cash from the EU should be treated as additional to any money that would in any case be spent by government. Under this principle of "additionality", the Treasury is not allowed to substitute EU cash for its own spending.

Mr Wilson said: "It is imperative that one of the committees of the Scottish Parliament takes up this issue as an immediate priority for inquiry."