THE biggest change to the way Scotland is governed since devolution began has been proposed, with the recommendation Holyrood takes control of a large part of the country's income tax revenue.
The Scotsman can reveal that the main recommendation from the Calman Commission is to hand over half the income tax raised in Scotland to the Scottish Government.
Significantly, Prime Minister Gordon Brown has suggested he is "very warm" to the proposal, hinting that the recommendations have a strong chance of being enacted.
With the basic rate of income tax at 20p, the change would give Scotland control of the second 10p. This would allow MSPs to vary the tax rate – up or down – by as much as they choose.
But would they have the bottle to use it?
Fiscal accountability is very much a two-edged sword and the Big Bad British Government at Westminster has been a very useful scapegoat in times of need and hardship.
4 comments:
Whit a stramash yet again!
Let's hope the 'National conversation' has more sensible conclusions than this limited report.
I would go farther and say that the devolved governments should be responsible for raising the majority of their own budgets, and rely on central funding only to mitigate the effects of regional economic variations. Keep VAT, customs and duty as the UK-wide "federal" taxes, devolve all other taxes (income, corporate etc) and index central funding to some objective economic measure, e.g. income per head. This would be transparent, equitable and force the devolved administrations to take proper responsibility for their spending plans.
It would be interesting to see who's doing all this leaking and for what purpose...probably better waiting till Monday (?) to see what's really in it.
"But would they have the bottle to use it?"
Is a good question.
It ties in with the question of borrowing powers - if the Scot Parliament is given control over tax revenues, then in principle borrowing powers should follow.
But since the UK as a whole is already borrowed to the hilt against its existing revenues, any additional Scottish borrowing would probably have to be backed by additional Scottish taxes. That would be interesting.
The other big question is "who's going to implement it, and when?"
Doing anything about Calman will need Westminster legislation. And following the expenses mess there, we now have proposals flying around for fixed terms, PR, an elected Lords and who knows what else.
How the next government is going to fold in Calman with all that lot - as well as the tiny problem of coping with the recession and our enormous national debt - is anyone's guess.
Royal Commission, anyone?
Post a Comment