2nd June 2014
Scotland looks set to be given much greater control over taxation even if votes ‘No’ in the forthcoming referendum.
The Conservatives in Scotland have just published the conclusions of the party’s devolution commission chaired by Lord Strathclyde.
The Commission recommends that after a No vote, Scotland should be given far greater tax and spending powers, a move backed by the Scottish Conservative leader Ruth Davidson and expected to be endorsed by the UK Conservatives later today.
Although this is much further than Labour, the second largest party in the Scottish Parliament, it does make it likely that what is being called devo max, will see substantial transfer of powers.
Under the plan, Scotland would be responsible for 40% of the money it spends. It says there is a case for a share of Scottish VAT receipts being assigned to the Scottish Parliament. The tax-free personal income tax allowance would remain reserved to Westminster on a UK wide basis, but, after that, the Scottish Parliament would decide on rates and bands. A new, independent Scottish Fiscal Commission should be created to produce Scottish forecasts.
It also recommends that the Scottish Parliament should get responsibility on welfare issues which relate to devolved areas, such as housing benefits, and attendance allowance paid to disabled people aged 65 who need care.
The move would be certain to create a lot financial planning challenges particularly for those who spend time working both sides of the border, though they could well benefit from astute planning. It also raises an interesting political situation where a Conservative government is offering to devolve more powers to Scotland than Labour, which could conceivably control the Scottish Parliament at a future date.