Boris risks furious English backlash by throwing more money at Scotland

The pound has seen something of a resurgence, against both the dollar and the euro, since last week’s super-Thursday elections. The spurt in part reflects relief that Scottish independence has become that little bit less likely.

Notwithstanding the pro-separatist majority that now exists in the Scottish Parliament, the fact is that Nicola Sturgeon was denied the majority she sought for her own party, weakening the legitimacy of demands for a second referendum. In the event, more votes were cast for pro-union parties than separatist ones.

Small wonder that the First Minister shrinks from the idea of an immediate second vote; she would struggle to win it if held tomorrow. Her gamble is that Boris Johnson’s determination to deny any question of a second referendum will play into her hands, and she could be right.

In this age of identity politics, nothing is more likely to sustain Sturgeon in her position than lecturing from Westminster about how much worse off Scots are going to be if they vote for independence, and for good measure to deny them another chance to vote on it anyway. Once again she plays the downtrodden Scots card, subjugated by bullying English Old Etonians.

Yet it is not just North of the Border that Boris Johnson needs to win the argument for the union; he also has to win hearts and minds in England, where the challenge might reasonably be thought just as big. It is admittedly improbable in the extreme that the English will ever be given a vote on the future of the union, but if they were, chances are they would as happily vote for Scottish separation as the Scots themselves.

Surveys repeatedly show that most English voters couldn’t give a stuff if Scotland chooses to leave, and that a sizeable minority would positively welcome it. Attitudes are harder still when it comes to Northern Ireland, which in per capita terms enjoys an even bigger fiscal transfer from the rest of the country than Scotland.

Scotland may be the epicentre of the debate, but ultimately, the future stability of the UK depends as much on consent south of the border as it does among Scots.

Many English voters already think far too much money is spent keeping Scotland onside. Any more risks a serious backlash.

Ever greater levels of devolution are the price Westminster has deemed necessary to keep the union together. Yet chucking money and powers at Scotland is not going to be a sustainable solution if it ends up alienating everyone else. If going “federal” is the answer, it won’t work unless all are offered similar levels of political and economic autonomy.

The current devolution settlement is already intolerably asymmetric. Many of Scotland’s domestic affairs - including health, education and public transport - are determined by Scotland’s devolved institutions, over which England holds little sway. Yet public policy for England itself continues to be decided by UK-wide institutions in which Scotland does have a say through representation at Westminster.

This asymmetry used to be called the “West Lothian Question”, a term coined by Enoch Powell after the MP for the Westminster constituency who first raised the issue, Tam Dalyell. The “English votes for English laws” reforms of the first Cameron government only partially answered the complaint.

With the Johnson Government enjoying a “stonking” great majority at Westminster, constitutional issues such as these might seem of little more than academic interest. They hardly matter. Scottish MPs cannot influence what Johnson does in England.

What does matter, however, is the size of the subsidy paid by the rest of the country to support the devolutionary settlement. Analysis by the Office for National Statistics shows that in 2018-19, Scotland’s fiscal deficit was around £2,450 per person. In other words, they spend that much more per person than they raise in taxation.

The numbers that underlie this statistic further enhance the sense of English grievance. Tax revenues per person are about the same as the average for the rest of the UK, but spending is much higher - £14,500, against a little under £12,600 for England. If you want to know why Scotland can splash out on a 4pc pay rise for health workers, but England can seemingly afford no more than 1pc, there you have it.

True enough, the per capita fiscal deficit for Wales and Northern Ireland is even bigger, as indeed it is for the more deprived regions of England, including the North East and North West. The difference is that all these areas of the UK are considerably poorer. It is the shortfall in tax revenues, not the excess in spending, which makes the difference.

Scots should be careful what they wish for; many voters south of the border would gladly see them go. Yet English nationalists too should be worried by the logic of such thinking. Reductio ad absurdum, the same argument can be applied to the English regions.

To the extent that there are any fiscal surpluses to be had at all in the UK these days, they all come from London, the South East, and East Anglia. Why should rich Londoners subsidise poor Northerners? The old heptarchy of seven sovereign Anglo Saxon nations beckons. Refusal to cross-subsidise between regions would split the country asunder.

In any case, selling the merits of the union to the English is perhaps as big a challenge as selling them to the Scots. As Boris Johnson must know from his success in red wall constituencies, identity politics have become as powerful a force south of the border as north of it.

Yet despite the seemingly one-way flow of money, the bottom line is that the English have as much to lose as the Scots from the death of the union. Scotland is just 6.5pc of total UK GDP, so in simple economic terms, its loss might not seem of much importance.

Even so, a lot of things begin to unravel once the union is gone - the UK’s position on the UN Security Council, its independent nuclear deterrent, its military credibility and its still-potent soft power around the world to name but some of them.

International perceptions matter. What chance for Global Britain once globally insignificant? Scottish separation would be as much the end of an era for England as for Scotland, and not in a good way.