The system for allocating public expenditure to the nations and regions of the UK has never worked properly since the Union of 1707, when Scotland's compensation for joining the Union arrived in Edinburgh in carts guarded by dragoons. Even W.E. Gladstone got it wrong in 1886. Now it has irretrievably broken down. Money goes to Scotland, Wales and Northern Ireland by the notorious Barnett Formula, but this is collapsing and cannot last long. Money goes to the English regions by poorly-understood formulae that work badly. People in every region think that the system is unfair to them. Money has gone not to the most deserving but to those who posed the most credible threat - once Ireland, nowadays Scotland. The Fiscal Crisis of the United Kingdom suggests how the system could be fixed, drawing lessons from Australia and Canada. It recommends a politician-proof Territorial Grants Commission on Australian lines, to follow the successful depoliticisation of monetary policy in the UK.