Economy

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The devolution of various welfare powers to Scotland has led to speculation as to what a Scottish benefits system might look like. However, analysis from David Bell suggests that Holyrood may struggle to meet the bill for existing benefits in future years, let alone new ones. 

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The Chancellor has used the Budget to limit the Scottish Government's room for manoeuvre, say David Bell, particularly through changes to Corporation Tax and the National Minimum Wage.
 
Once again, George Osborne has proved himself to be a clever politician.
 
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The Scottish Government's new capacity to borrow is a vital, if little-discussed, power. However, says Angus Armstrong, the details of how this will work may have been dodged by the Smith Commission but cannot long be avoided by the Scottish Government and HM Treasury. 
 
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What’s the fuss about austerity?
 
Is all the concern about austerity misplaced? The latest labour-market statistics published on Wednesday contained more good news. There was another increase in the employment rate, in both Scotland and the UK. Scotland’s 74.4% employment rate is at an all time high. The economic inactivity rate has fallen and is at a historic low.
 
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Income inequality in Scotland (and the UK) was low and stable throughout the 1960s and 1970s. The 1980s saw a significant increase in inequality, driven by a variety of factors. Deindustrialisation and technological change caused a fall in demand for many middle and lower-skilled occupations, and this combined with an erosion of trade union power and labour market deregulation led to a relative decline in wages at the lower end of the distribution. Financial deregulation and a reduction in top rates of income tax contributed to a rise in salaries at the upper end.
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Current discussions over the Scotland Bill have seen the Chancellor and SNP Westminster leader Angus Robertson at loggerheads over the role of borrowing in national life. Gemma Tetlow of the Institute for Fiscal Studies discusses the approach of the two governments and their likely implications for taxation. 

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Talk of Scotland adopting a Scandinavian economic model usually comes with no mention of the bill but, suggests recent research, the impact of higher taxes is more complicated than it might at first appear. 
 
The Scottish Government holds up the Scandinavian economic model as one this country might emulate.
 
The focus is typically on the good news of more and better public services, with little comment on higher levels of taxation to pay for them.
 
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The suggestion by the SNP that success at the Westminster election provides a mandate for devolution of the National Minimum Wage may create some unexpected complications, says David Eiser.
 
The SNP believes that the scale of its victory at the General Election amounts to a mandate for the devolution of further powers (beyond those recommended by the Smith process) to the Scottish Parliament. In particular, they have called for devolution of powers over the minimum wage, both in their election manifesto and in subsequent announcements.
 
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    What has been presented as an endgame is really just the beginning of the process and what is being described as the 'transition' or 'implementation' period, says Michael Keating, is really the time in which the real negotiation of what Brexit means will take place.

  • 15th November 2018

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  • 15th November 2018

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  • 15th November 2018

    Professor Michael Kenny and Jack Sheldon discuss a new report from the Centre on Constitutional Change and the Bennett Institute offering a comprehensive analysis of the weaknesses that bedevil the machinery for relations between the UK government and the devolved governments in Scotland, Wales and Northern Ireland. Over the coming weeks, we will highlight some of the findings and recommendations.

  • 13th November 2018

    Experts from the Universities of Edinburgh and Cambridge have called for far-reaching reforms to the UK’s system of intergovernmental relations (IGR). The report, Reforming Intergovernmental Relations in the United Kingdom, provides the framework for a new system of intergovernmental machinery built around principles of respect, transparency and accountability.

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