Another view of fiscal autonomy for Scotland

My Edinburgh colleague, Drew Scott, and Andy Hughes-Hallett from George Mason University and St Andrews, have published their second paper on issues of fiscal autonomy for Scotland, building on their earlier paper critiquing  the Calman Commission’s recommendations. (I discussed that paper HERE.)  This is not a case that has been clearly made hitherto, and my remarks on another version of fiscal autonomy, as discussed by Paul Hallwood and Ronald MacDonald, are HERE.

The Scott and Hughes-Hallett paper entitled ‘Scotland: A New Fiscal Settlement’ argues that significant economic growth could result from the model of fiscal autonomy they advance is available from Reform Scotland’s website.  There’s a press release summarising it here, and the paper itself is now here.

UPDATE, 19 April 2012: The Scott/Hughes-Hallett paper can also be found on the St Andrews University website, here.

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2 Comments

Filed under Devolution finance, Scotland

2 responses to “Another view of fiscal autonomy for Scotland

  1. DougtheDug

    The problem for implementing fiscal autonomy / full fiscal autonomy for Scotland is that fiscal autonomy is a federal financial system which will need to be grafted onto a devolved system of government.

    If the UK was a federal state it would be easy to change the fiscal arrangements between the four nation states and the federal parliament but the UK is not a federal state, it’s a unitary state with three devolved provinces layered on top of the unitary framework.

    In order to have a federal financial system you need a federal constitution and that simply will never happen as it involves the recognition that England and Britain (or the UK) are separate and the complete reorganisation of the UK government and political structure of the UK.

    Calman was a pointer to this mindset because what it tried to do was to reorganise the way Scotland was financed in isolation from the rest of the UK. Under Calman the Inland Revenue still collected the taxes but refunded Scotland for the estimated tax take which was removed from the block grant with the proviso that the Scottish Government could also vary the basic rate up or down in Scotland by 10%. It was a bodge-job from start to finish. Even the Scott and Hughes-Hallett paper does not separate out the UK from England and concentrates on a Scottish scheme in isolation rather than a federal reorganisation of the UK’s financial systems.

    Calman was meant to produce the “independence killer” option but because the UK is viewed as a unitary state with provinces it could never do anything beyond tinker at the edges of the block grant.

    The problem for all proponents of fiscal autonomy is that the rest of the UK sees no benefit in Scotland having fiscal autonomy and in fact it is a dangerous step to the breakdown of the Union and every scheme proposed will always fail at that hurdle. Fiscal Autonomy will come with independence not before.

  2. Pingback: Reading the Scotland Bill Committee’s report « Devolution Matters

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