The north/south divide of UK politics

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Seldom has the disjuncture in politics, north and south of the Border, been more evident than in the controversy which has attended Jim Murphy's comments about using a "mansion tax" to hire nurses in Scotland.

To be clear, there is nothing particularly extraordinary in the actual content of Mr Murphy's suggestion.

Arithmetically, it is a simple restatement of the distribution of resources which is a core function of the shared polity and economy known as the United Kingdom.

The object of that distributive function is to garner resources from those who have the most and despatch them to those who have the least.

If the tax, benefit and spending system is working properly, which is not guaranteed, that should mean that, in any one part of the UK, money flows from those with the highest income or capital reserves to those who are in need.

There is a further element: the effort, as part of this redistributive system, to ensure that resources from those areas of the UK with the most evident prosperity are diverted to those areas with the least.


Getting Barnett

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The Barnett Formula is much misunderstood - sometimes wilfully, sometimes from neglect.

Instigated in the late 1970s prior to a previous attempt to devolve power within the UK, it does not calculate the total sum devoted to Scotland.

Rather it works out the annual change in the Scottish block grant, based upon relative population.

Scotland gets a proportionate share of any increase (or decrease) in the money allocated to comparable English spending departments.

That is, those areas which, for Scotland, are now devolved to the Scottish Parliament (and were previously covered by administrative devolution under the Scottish Office.)

Barnett is meant to be a convergence formula. To repeat that, it is specifically designed, over time, to reduce Scotland's historic advantage in the allocation of public spending.

For various reasons, including Scottish guile and the exclusion of pay settlements, it did not do that for many years.

Now it does. Which is one reason why there are loud voices raised against the formula in Wales.

However, other factors intervene.

Firstly, to repeat, Barnett does not calculate the total sum. It varies historic totals.

If those benefit Scotland (and, for a range of reasons such as population spread and geographical diversity, they do), then Barnett may not wholly counter that, except over a prolonged period.

Further, remember that the sum is worked out by drawing comparisons with regard to devolved issues. Not those which are reserved.

So if (devolved) health spending is protected by the UK government while a reserved department (say, defence) faces constraint, then that factor alone potentially benefits Scotland.

Although, of course, Scotland faces its share of cuts in reserved budgets.


The Boris factor

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Apologies for the long essay. Back to Boris.

London's Conservative Mayor, Boris Johnson, is less than content with the comments made by Mr Murphy, the Scottish Labour leader.

Indeed, up with this he will not put.

Why, precisely? A range of reasons, all political rather than arithmetical or fundamentally economic. To emphasise, that does not make these reasons any less salient or important, simply different in nature.

Firstly, Mr Johnson has repeatedly argued that Scotland is fundamentally over-funded - and that the money comes, disproportionately, from London.

He did so, bluntly but with a trademark ironic smile, when I interviewed him back in 2009 for a documentary about 10 years of Scottish devolution.

He has done so on many occasions.

Secondly, Mr Johnson and many other Conservatives deeply dislike the proposal for a tax on the highest value houses which, by its very nature, would fall substantially on residents in the UK capital and in the wider south-east of England.

They believe it is potentially unfair on those who may be relatively short of disposable cash - while living in a property whose value has increased hugely with the passage of time.

They believe - and the London Mayor is particularly strong on this - that it is disproportionately challenging for one area of the UK.


Jim's plan

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Mr Murphy is not directly responsible for the "mansion tax". He now leads the Scottish Labour Party.

He sees his future at Holyrood - which has no overall responsibility for the broad economy or, presently, for much in the way of taxation policy.

That will change, to some (still argued) extent, in the future. In which context, for example, Mr Murphy has said that he would favour reintroducing a 50p income rate - if necessary, for Scotland alone.

But back to the "mansion tax", levied on properties worth more than two million pounds.

Scotland would not get a direct share of the cash raised by this, should it be introduced by a future UK government. That is not the way the system works.

Rather, Mr Murphy is anticipating that the money raised by a mansion tax would be diverted to public spending by UK government departments - and that, through the standard operation of the Barnett Formula, Scotland would get a cut.

(If, however, the money were to be used to reduce the UK deficit, then Scotland would not benefit directly.)

Mr Murphy, however, expects expenditure. His announcement is that Scotland's formulaic share would be spent upon recruiting a further 1,000 nurses.


'Jumping the gun'

Which brings us to the third element which has provoked Boris Johnson and Labour MP Diane Abbott.

She said Mr Murphy was "jumping the gun in a highly unscrupulous way" - by which she meant he was committing to expenditure on a tax which had yet to be introduced, let alone levied, let alone redistributed.

To be clear, both Mr Johnson and Ms Abbott are primarily motivated by the impact of the proposed UK tax upon London, the city they represent.

In a democracy which is based upon local constituency or regional support, that is entirely understandable. They are doing their job. (To be clear, Ms Abbott supports the tax in principle.)

But they are also exasperated by the tone of Mr Murphy's statements, by his talk of a "win-win" for Scotland - in that a share of the cash generated can be spent north of the Border while the bulk of the tax imposition falls upon the south.

Again arithmetically, Mr Murphy is simply pointing up the diverse nature of the UK economy.

Personal, corporate and property taxation tends to be raised in the wealthiest region more than in other areas.

By contrast, as Mr Murphy has now sought to argue, revenues from North Sea oil tend to be generated, mostly, in Scottish waters.

However, he needs to talk up that "win-win" claim. Why? Because Labour in Scotland is facing a very different challenge from Labour in England.


Labour lag?

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In Scotland, Labour is apparently lagging well behind the SNP in the polls. There is talk of several seats changing hands.

With some urgency, Jim Murphy needs to talk up Labour's credentials as standing up for the people of Scotland.

That hinges upon mind set.

If, post referendum, the people of Scotland are still in a mood to favour those who offer a strong Scottish voice on Scottish issues, then that potentially benefits the SNP - as it does in elections to the devolved Scottish Parliament where Scottish issues are dominant.

If, however, the people can be cajoled (by Labour and others) to think primarily upon UK politics and the occupant of Downing Street, then matters might revert.

Meanwhile, Mr Murphy needs - as a minimum - to challenge and, if possible, neutralise the SNP's standing as the voice of Scotland.


Constitutional questions

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There is a wider consideration.

For decades, a number of elements of the UK constitution have tended to be institutionally downplayed.

The view of the continuing state - by contrast with the desires of individual partisan politicians - has been to rock the boat as little as possible.

So, again from the institutional state point of view, the discreet cry is: leave Barnett alone. Just don't examine it too closely.

Ditto with votes in the House of Commons, the West Lothian question.

For decades, the position of the continuing UK state has been: leave well alone, nothing to see here, too much potential trouble to start stirring things.

In essence, stop asking such a difficult question.

David Cameron, for example, had previously followed that instinct, playing down West Lothian, arguing "better an imperfect Union, than a perfect divorce".

With his statement on the morning after the referendum, he deliberately reversed that position.

For understandable political reasons (not least, the challenge from UKIP), he laid substantial stress on English votes for English laws, ignoring warnings from Gordon Brown, Alistair Darling and others that such an initiative could jeopardise the very Union which the referendum outcome had preserved.

Similarly, now, for understandable political reasons, Labour's Scottish leader has talked up one aspect of the current funding formula - hoping, thereby, to gain credence for positing Scottish interests.