Earlier today a Policy Group established by the Scottish Party reported its findings. Those findings will be debated at a special conference next Friday. At the heart of that debate will be the Group’s suggestion that Scotland embraces ‘fiscal autonomy‘.
The report unpacks the problem of fiscal accountability as six bullet points:
- "the major disadvantage of the current devolved financial arrangements is that politicians in the Scottish Executive are not responsible for raising the money they spend;
- because the bulk of our taxes are sent to the UK exchequer, there is no link between the taxpayer and the money spent by the Executive, and there is no direct link between the politicians and the tax raised;
- the Scottish Parliament lacks the powers necessary to encourage fully the development of a successful Scottish economy;
- only the levels of council tax and business rates (non-domestic rates) are determined, raised and retained in Scotland;
- the current devolved financial arrangement does not adequately fund our public services, but is capable of delivering a windfall, e.g. the proceeds from the recent increase in National Insurance Contributions;
- whatever money comes to Scotland by way of block grant has to be spent, which has led to an increase in unplanned expenditure."
Possible solutions to this are set out in four bullet points:
- "the direct link between the taxpayers, the politicians and the money they raise and spend should be restored, retaining the taxes raised in Scotland;
- the Scottish Executive should then set tax rates consistent with the needs of the economy and with regard to the optimum levels of public expenditure necessary to fund the public services;
- lowering tax rates would result in higher tax income and encourages investment and innovation;
- the tax proceeds from the economic growth should be retained in Scotland and not retained by the UK exchequer, as at present."
Will this be another Tory report that is quickly spurned by those who commissioned it? In any case… what do you think about this recommendation?