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ScottishpoundDavid Cameron was in Edinburgh yesterday and reaffirmed his "heart and soul" commitment to Scottish devolution.  He also touted the idea of "fiscal autonomy" for Scotland but added a number of caveats that made his position ambiguous:

"I certainly have doubts about fiscal autonomy, but the right process is for the Scottish Conservatives to look at how the Scottish Parliament is working.  If they come up with an answer that a greater degree of fiscal autonomy is the right approach, then that is a decision which we will have, with colleagues in Westminster, to work out whether that is the right thing for the UK."

In July George Osborne had already expressed support for Scottish Tories using their freedom to lower income tax (compared to England & Wales) by the permitted 3%.  Some Unionists fear that deeper fiscal autonomy is a giant step towards Scottish independence but other Scottish Tories see it as a way of rejuvenating their country’s sluggish economy.   Oberon Houston described some of Scotland’s socioeconomic challenges in his November Platform post.  Proponents of fiscal autonomy see Ireland’s Celtic Tiger experience – built on the back of lower taxation – as a model for Scotland.

Mr Cameron also used his visit to respin his appeal to the Liberal Democrats.  In an article for The Herald (an only very slightly tartanised version of last Friday’s Hereford speech) he described his own values and then wrote:

"I believe these values reach far beyond the Conservative Party. Many Liberal Democrats share these values. And many Liberal Democrats share with us a clear analysis of why Labour has failed to live up to its promise. That’s why I’m so eager for Liberal Democrat voters to reject their party’s coalition with Labour in the Scottish Executive. The coalition hasn’t delivered liberal solutions to Scotland’s problems, and it hasn’t respected the values that liberals hold so dear…"

A leader in The Herald gives Mr Cameron’s Scottish visit reasonably positive treatment but the danger of cosying up to the Scottish LibDems is that interesting – but controversial – ideas like fiscal autonomy may be harder to pursue.

35 comments for: Should Scotland become a low tax haven?

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