Peter McGregor's blog
Much of the debate since the referendum has focussed on which additional powers are likely to be devolved from Westminster to Holyrood. Rather less attention has been paid to the likely impact on the Scottish economy of devolving any of the powers that have been suggested. At the time of writing, the details of the Smith proposals are not known but we can safely assume that he is unlikely to support either the most modest or the most-far-reaching of those put forward by the participating parties.
Peter McGregor discusses tax powers for Scotland in the event of a no vote.
A “no” vote in the forthcoming referendum on Scottish Independence would immediately lay to rest one of the most controversial issues that has characterised the economic debate so far, namely the currency issue. Scotland would remain in a monetary union with the rest-of –the UK (RUK), which implies that the Scottish Parliament will have no greater influence on UK monetary policy than it does currently.
The final report of the Labour Party’s Devolution Commission, published yesterday, contains two main proposals on taxation. Firstly, that the Scottish Parliament’s powers over income taxation should be enhanced with the ability to: vary income tax rates by up to 15p in the pound, compared to the 10p that would be implemented in 2016 as a consequence of the Scotland Act 2012; make the Scottish income tax system more progressive (but not less) by allowing upward variation (only) in the higher rates of tax relative to the basic rate.