A New Financial Model

I’m not a financial wizard, so most of what I’m proposing will probably be daft, but I’ll propose it anyway. The taxes of most people will be collected by the central government and stuck into a big pot (the money pot we call the treasury) and then partitioned to be handed out to the the rest of the UK for things like spending on the police, defence, national health, welfare, etc. Some of the money is dished out to councils, for use by them on local matters, like repairing roads. My proposal would change this.

My proposal is that the national taxes and other revenues usually collected by the national government, would be collected by local representatives of the national treasury in each of the devolved countries and on an annual basis divided like this.

70% of what is collected in each devolved country would be given to the local treasury belonging to each devolved country. 30% would be given to the national treasury from each of the devolved countries.

It’s not a perfect solution, but each of the four parts of the Federal UK would be equally financed proportionately to the total taxes and revenues collected by each country. The national treasury would receive it’s share for the national activities. The diagram on your right shows graphically what I mean.

If you can tell me of another financial model that would give a fairer solution to the Barnett formula, I’d love to here about it.