The Scottish Government

Economics and Constitutional Change

Friday, November 30, 2007

The White Paper says: There could be different levels of fiscal autonomy. The more extensive the tax-raising power, and the less significant the contribution of a block grant from the UK Government, the greater the degree of fiscal autonomy enjoyed by the Scottish Parliament and Scottish Government. Scottish National Party estimates indicate that matching the growth rates of other small European nations could mean an additional £19 billion in the economy by 2015, or £4,000 per person resident in Scotland.

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Comments

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• 1. Paul Sergeant - Kincrdineshire

  Friday, August 24, 2007 20:19

  The only advertised fiscal autonomy the Scottish Parliament has is to raise the basic rate of income tax by 3%. I don't know what the flexibility on council tax and local income tax is.
  
  To benefit from possible economic improvement from lowering taxes, the Scottish Government needs a direct payment of those taxes. Using the 3% in the current settlement, let's say the Scottish Parliament could lower income tax by 3% and would receive the proceeds from 3% below that.
  
  I mean all income tax in Scotland above 6% below the basic rate goes to the Scotish Government.
  
  This is a small change and I'd like to see larger ones. Instead of the complications of splitting a tax, it would better to assign some taxes to the UK Parliament and others to devolved Parliaments. I would like to see proposals on "property taxes" - Council Tax, Inheritance Tax, Stamp Duty, Capital Gains Tax.
  
  Alternatively there is full indpendence. That is a separate conversation. But devolution can be progressed at the same time as a conversation on independence.

• 2. Derick - Stirlingshire

  Saturday, August 25, 2007 15:48

  GDP per capita in US dollars
  2002 figures
  UK - $26,150
  Iceland - $29,750 (13.7% above UK)
  Norway - £36,600 (40% above UK)
  Denmark - $30,940 (18.3% above UKl)
  Ireland - $36,360 (39% above UK)
  
  Scotland - $23,622 (couldn't find a 2002 figure so this is 2001 figure from Scottish Executive - accuracy caveat?)
  
  Our Independent neighbours are almost twice as wealthy as we are
  

• 3. Derick - Stirlingshire

  Saturday, August 25, 2007 15:53

  Independence is not just about money.
  
  UN Human Development Index (rankings out of top 30)
  Scotland - no figure. UK 0.940 ranked No 17
  Iceland 0.960 ranked No 2
  Norway 0.965 ranked No 1
  Denmark 0.943 ranked No 15
  Ireland 0.956 ranked No 4
  
  Economist Quality of Life Index 2005 (rankings all states)
  Scotland - no figure. UK 6.917 ranked No 29
  Iceland 7.911 ranked No 7
  Norway 8.051 ranked No 3
  Denmark 7.796 ranked No 9
  Ireland 8.333 ranked No 1

• 4. MK - Glasgow

  Saturday, August 25, 2007 17:15

  There needs to be better ways to alter business and tax rates to reach balance across the UK - for example NI sits beside Eire, which has far lower business rates - why would a business locate in NI when 30 mins away, they could get a far better deal? The same applies to Scotland - lower rates than SE of England; perhaps lower rates in rural areas; better rates for businesses that move out of cities and employ locally - so much could be achieved through flexibility - and it would promote entrepreneurship better than encouraging a dependancy culture.

• 5. livilion - livingston

  Sunday, August 26, 2007 18:55

  The UK business community currently struggles under the burden of almost the highest business rates of all our EU partners.
  
  Up to a third of all major companies are on record as saying they will consider moving out of the UK if this situation does not change.
  
  Our problem in Scotland is that what is economic poison to us actually tastes ok to 'The Square Mile' of the City of Westminster.
  
  How we still attract inward investment is a supreme testimony to the quality we have to draw upon.
  
  Imagine having the kind of freedoms that, say, the Irish have but with our inherent advantages and higher base starting position?
  
  The possibilities are truly mind boggling.
  
  We have to retain the power to set our domestic and business conditions to suit our own Scottish circumstances.
  
  Waiting and hoping, each Chancellor's speech, that everything will be ok somehow reminds me of a cancer doctor's waiting room.

• 6. livilion - livingston

  Sunday, August 26, 2007 19:13

  Am I right in saying that almost 50% raised in tax is spent in collecting it?
  
  According to GERS, Scotland raises somewhere in the region of £18-19bn a year through the Inland Revenue, so £9bn of that never produces any advantage to the country.
  
  I would suggest we target halving that figure as a matter of priority.
  
  There's a priority number one, and a potential windfall similar to another North Sea Oil bonanza that can only increase instead of running out.
  
  Prioritise reducing the costs involved in collecting PAYE etc.
  With IT as it stands today, this should surely be quite straight forward.
  
  We should investigate ways to simplify and streamline the tax system.
  I'm sure our many gifted academics have already spent many hours doing just that.
  
  This ought to improve the revenue stream and serve to produce a more attractive business environment for companies already in Scotland and help attract new businesses to invest here.
  
  

• 7. Hector McNeill - Portsea

  Sunday, August 26, 2007 21:25

  SEEL (Systems Engineering Economics Lab) has initiated analysis and editorial work in preparation of a series of publications under the title "The Scotland Effect" and to be made availbe at the British Strategic Review website (BSR). These documents will cover most constitutional issues raised in the Scottish Executive's paper.
  
  BSR decided to support this series because of the importance of the issues not only for the people of Scotland but also for everyone else on these Isles.
  
  The first paper will concern "Fiscal Autonomy" and I understand that this should be posted by Monday, 27th Aug, 2007.
  
  As Director of SEEL I have written a short introduction to the series which can be seen at:
  
  http://www.seel-telesis.com/bsr/
  
  The BSR has no poltiical party affiliations and the work will be undertaken by the SEEL units concerned with Constitution, Constitutional Economics, the Minority Principle and Real Incomes policy.
  
  We sincerely hope that this series will provide a useful contribution to a fundamentally important issue to us all.
  
  Hector
  
  
  
  

• 8. Bryce Miller - Edinburgh

  Monday, August 27, 2007 11:18

  Fiscal autonomy is pointless in isolation. Even Wendy Alexander's better half says so. Fiscal autonomy, even to the degree where we raise all taxes ourselves will require a portion to go to the Westminster government. Unless Scotland has greater powers to flex it's fiscal advantage, and unless Scotland has sovereignty, the amount of money we hand down south will still be dictated to us by 529 MPs who represent constituents who haven't paid into the Scottish pot in the first place.
  
  In short, fiscal autonomy alone will still leave us with a begging bowl.
  
  Having said that, fiscal autonomy with powers of energy would let a Renewables Revolution flourish, bringing wealth to Scotland through sale of electricity to Europe. If this is done through publically owned private companies (a la Norwegian Stat Oil, who no longer use oil for generating electricity) then everyone in Scotland can reap the benefits. (It must be run as an independent business, however.)
  
  We must also have control over immigration policy. If Scotland becomes an economic power house, with jobs for all, Scotland will have difficulty filling these positions. Scotland's population has experienced 0% growth over the last forty years. We would need an immigration policy which aims to grow the population. We cannot have that even within a Devolution Max setting, when south of the border they have too many people.
  
  Fiscal autonomy would be adventageous, but only if it came with a package of further powers.

• 9. Michelle - Glasgow

  Tuesday, August 28, 2007 14:21

  I think the point made on fiscal autonomy is correct as we have to get our country in order. No population can sustain the current drain of our welfare state system. This is something that must be sorted out first and foremost. We have the natural resources, we have the assets and the educational system but unfortunately we also have a large drain on our economy with the wont work for less than £20,000 people who are sitting on the benefits system. This was not an SNP made problem but for us to see our future as an independant land then this must be addressed.

• 10. Tubgirl - Montrose

  Tuesday, August 28, 2007 21:20

  All the money saved from not sending our taxes to England could be spent on a Scottish National Space Programme.
  
  This could aim, before the decade is out, to land Alex Salmond on the moon and leave him there!
  
  Money well spent.

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