The Press and Journal (Aberdeen and Aberdeenshire)
Maggie’s raid on Scotland’s budget
Economy: Iron Lady gave behind-scenes go-ahead to ‘chip away’ at block grant
Secret papers show Margaret Thatcher used the North Sea oil boom as an excuse to launch an “invisible” raid on Scotland’s budget.
The Iron Lady sanctioned a behind-the-scenes plot to start “chipping away” at the nation’s block grant, claiming Scots received “generous” treatment and “over- provision”.
The explosive revelations are contained in confidential Cabinet records from 1984 being made public for the first time today.
A spokesman for First Minister Alex Salmond branded the contents “astonishing” last night.
In disclosures that are certain to be seized upon in the battle over the nation’s future, it has emerged that in 1983 the Treasury began drawing up plans to slash Scotland’s budget, behind the back of Scottish Secretary George Younger.
John Redwood, who was a senior policy adviser to Mrs Thatcher at the time, wrote to the prime minister in January 1984 saying there was a £900million overspend in Scotland’s £6billion budget – 15% – and that she should seek savings of £500million.
Exchanges betweenministers describe the funding as the “territories programme” and refer to justifications such as Scotland having a pupil-teacher ration of 17.1 compared to England’s 18.5, and claims that roads north of the border were “under-used”.
Whenthe plans were discussed in February 1984, the then chief secretary to
“Mr Younger is still objecting to the principle of such a study”
the Treasury Peter Rees put forward another reason for cuts– that “with thegrowth of the North Sea oil sector, and electronics, there had been a substantial narrowing of the income differential” between Scotland and England.
Minutes s how Mrs Thatcher agreed there was “over- provision”, but warned of the “important political dimension” following the recent closure of the Invergordon smelter and the Wiggins Teape pulp mill at Fort William. The note said: “Afrontal assault on public expenditure in Scotland would put him (Mr Younger) in extreme difficulties, and could create a possible opening for the SNP.”
It added: “The prime minister said she recog- nises the case for reducing public expenditure provision in ScotlandandNorthern Ireland, but felt it should be tackled with great care. There should be no attempt to publicise the figures.”
After Mr Younger was eventually informed of the bid to reduce Scotland’s budget, he moved to block plans for a study to prove the “over-provision” and said any cuts must be “invisible”.
A memo to the prime minister in October 1984 said: “Mr Younger is still objecting to the principle of such a study. He feels even the knowledge of its existencewouldbevery controversial.”
Mr Rees wrote to Mrs Thatcher the following month: “He (the Scottish secretary) was prepared, where possible to make economies in provision for Scottish programmes but this was best done by chipping away over a period of years.”
A row erupted behind the scenes between Mr Younger and Mr Rees over the level of cuts that could bemadewithout being “detected”.
He repeatedly insisted that “it would be impossible to defend savings which were visible” but said he was “willing to trim the Scottish block programmes as far as possible so long as that could be done invisibly”.