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Barnett Formula post Smith Commission

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The Barnett Formula under the Smith Reforms is examined by Dr Jim Cuthbert in a paper for the Fraser of Allander Institute. Building on previous work, it turns out that both relative population growth, and the relative rate of growth in the relevant tax base between England and Scotland, will play an important part in determining the behaviour of the Barnett formula as modified by the Smith Commission proposals.

In particular, the modelling indicates the potential for the emergence of dynamic effects, in which relative population growth could interact with growth in the tax base, in a way which could adversely affect Scotland.

Barnett post Smith 25 6 2015