The options for more devolution
There have been many alternatives to independence, including the much-talked about ‘devo-max,’ which would see Scotland assume full fiscal autonomy. Ben Thomson, of Reform Scotland, examines this, and other possibilities
Status Quo, plus Scotland Bill
If the current Scotland Bill legislation passed through parliament, Holyrood will move from raising around 15 per cent of its own budget at present to around 35 per cent. Mostly, this is due to the new Scottish income tax rate it will levy every year, topping up the existing block grant. MSPs will also get the power to set stamp duty and will have the authority over substantial new borrowing powers. Holyrood will also get powers over non-financial laws, including the drink-drive limit.
Backers: All the three pro-Union parties, Labour, the Lib Dems and the Conservatives.
A proposal put forward by the think-tank Reform Scotland. Westminster would retain responsibility over VAT and National Insurance. But then most other taxes would pass to Holyrood, including income tax, giving MSPs the power to decide on rates and bands. The scheme would also see Holyrood given power over all social protection, such as welfare payments. The think-tank claims this would ensure more coherence, given that the Scottish Government already oversees health and skills spending.
Backers: Some Labour figures, such as Malcolm Chisholm MSP. Former Lib Dem leader Tavish Scott and the Tory ex-Presiding Officer Alex Fergusson are also on a group studying the idea.
A plan devised by Labour lawyer and home rule activist Ian Smart, a former president of the Law Society of Scotland. Some taxes would be “apportioned” to Scotland at a level that allows current spending rates to be covered. Power to vary these taxes would then be devolved. Other taxes would only have revenues “assigned” because, if the rates differ from Westminster, it could cause cross-border issues. The system would do away with the block grant. Welfare – apart from pensions – and all private law would devolve to Scotland.
Backers: Ian Smart; some members of the Labour party. But the plan is only two weeks old and interest is growing.
A UK-wide solution which would entail a new written constitution setting out the powers of Westminster, the Monarchy, the devolved nations and local government. For Scotland, this would lead to a system of “fiscal federalism” whereby the Scottish Parliament would set most of its taxes itself, although HM Revenue would do the collecting. On top of this there would be a new funding deal for the whole of the UK based on the need to balance out funding across the country. Scotland remains part of the UK.
Backers: The Lib Dems. Lord Steel led a Commission in 2006 fleshing out the plan.
A Scottish plan put forward by the SNP Government in its previous white paper as a watered-down alternative to independence. The Scottish Parliament would take full control over all taxes and income generated in Scotland and would also take responsibility for their collection. It would then negotiate with London on how to pay for services which it wanted provided by Westminster – such as defence and foreign affairs. Scotland would remain part of the UK – although some observers believe the system would end up as independence.
Backers: Former First Minister Henry McLeish. And by the SNP as their first reserve, should independence remain out of reach.
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Thursday 23 May 2013
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