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Chancellor Kenneth Clarke has put an end to fears in Scotland that the government is to change the system of how th...
Chancellor Kenneth Clarke has put an end to fears in Scotland that the government is to change the system of how the treasury allocates money north of the border.

In an exclusive interview in The Herald (p7) Mr Clarke says:

'We have a basic understanding about how we allocate money for Scotland and I have no intention of going back on that and nor does the government.'

Under the present system, reports The Herald, the Scottish secretary gets 10.66% of the allocation of English spending as a single block despite Scotland's population of only five million. The Scottish secretary then decides how that block is divided, so spending on some areas is much higher than in England, eg local authority spending by 22%.

In the interview, the chancellor also attack the Labour party's proposals for a Scottish assembly with tax raising powers. 'In my experience of local government, I have never known anybody with tax raising powers say that they actually wish to reduce taxation,' he says.

He adds: 'I'm glad to say that we have beaten off the Labour party from a lot of rubbish about East Midlands regional assemblies. In my part of the world I can assure you that the inhabitants of Nottinghamshire want it like a hole in the head.

'What special feeling of pride or status the Scots derive from the prospect of paying a higher rate of income tax compared to the income tax that people get in the South I cannot imagine.'

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