Labour have been accused of staggering ignorance over the way the Barnett formula works after the party’s Shadow Secretary of State for Scotland called for the Scottish Government to spend money it doesn’t even get.
This week Margaret Curran used a speech to the STUC women’s conference to launch an attack on the way in which receipts from the 4G radio spectrum auction will be spent in Scotland and demanded that the Scottish Government to make clear how it will spend its ‘windfall’.
According to newspapers, the Labour MP challenged the Scottish Government to use a 4G windfall to ease Tory cuts instead of building a "vanity project".
In a statement released to the media, Ms Curran referred to apparent extra funding and said: “Will [the SNP] use it to take the edge off the worst of the Tories’ cuts that Labour is fighting at Westminster? Or will they waste it on a vanity project?”
Ms Curran launched the attack against the SNP despite two parliamentary questions on the matter, one by a party colleague that same day, making clear that the Scottish Government will not automatically see any increased spending.
Responding to a Parliamentary Question in October by Northern Irish MP Nigel Dodds, Danny Alexander, the Chief Secretary to the Treasury, said: “The Barnett formula applies to public spending allocation, not to general government receipts. Therefore no Barnett consequentials will arise from the sale of the 4G spectrum licence.”
This was confirmed by Mr Alexander last Monday after a second Parliamentary Question was lodged by Ms Curran’s Labour colleague David Hamilton MP who asked: “what effect the revenue generated from the forthcoming auction of the 4G mobile telephone spectrum will have on the block grant for Scotland?”
4G technology was made available to consumers in 10 UK cities, including London, Cardiff and Glasgow on October 30th. A reserve price of £1.4bn has been set for 4G which is to be auctioned by the broadcast watchdog, Ofcom. Ms Curran predicted that the auction would raise between £2.5 billion and £4 billion and that Scotland would get a proportionate share.
Describing the Labour MP as “foolish”, SNP MSP Maureen Watt said:
“Not for the first time, Margaret Curran failed to let the facts get in the way of her rush to attack the SNP and was left looking foolish as a result.
“The fact of the matter is that Scotland will not automatically receive a share of the coming 4G auction, so the very basis of her attack was absolute nonsense. As Shadow Scottish Secretary, you would have hoped Margaret Curran would actually know how the Barnett formula works!
“In fact Margaret Curran actually revealed one of the independence dividends she is so keen to conceal. If Scotland was currently independent, the Scottish Government would of course receive the money raised from auctioning 4G rights in Scotland.
“The Labour party’s enthusiasm to attack does them absolutely no credit.
“Their consistent failure to accept the genuine limitations of the current system only undermines the standard of debate in Scotland and falls far short of the standards people in Scotland expect from their elected representatives.”
Under the Barnet formula Scotland, along with the other devolved nations, can only receive funding as a result of spending in England.
However, spending south of the border does not always result in extra funding, as the London Olympics demonstrated after it was deemed ‘UK wide investment’ instead of English only by the last Labour government - the original cost eventually spiralled from £2.4 billion to almost £9 billion.
A deal was eventually reached that saw a £30 million package go to the devolved nations of which Scotland received £16 million.