Fiscal Policy

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Funding deal can end threat of the “Barnett Squeeze”

The UK Government and the Welsh Government are currently discussing the future of a ‘funding floor’ for Wales, designed to protect the relative level of government spending per head in Wales. A new report by researchers from Cardiff University’s Wales Governance Centre and the Institute for Fiscal Studies assesses three options for the floor, and considers how such a floor might interact with the Welsh block grant after taxes are devolved to Wales from April 2018.

A landmark new report by the Wales Governance Centre (WGC) at the University of Cardiff, Government Expenditure and Revenue Wales 2016, gives the clearest picture yet of the state of welsh public finances. Guto Ifan and Ed Poole at the WGC, explain that the report shows that public sector expenditure for Wales exceeded public sector revenues by £14.7 billion in 2014-15.
 
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The suggestion that an increase in the additional rate would lead to a mass migration of wealthy Scots has been widely - and rightly - criticised, says David Eiser. However, the likelihood of widespread tax avoidance by higher earners is a very real one. 
 
The SNP has been taking a lot of criticism for its failure to support a rise in the Additional Rate to 50p. 
 
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Does Nicola Sturgeon’s refusal to increase the Additional Rate of Income Tax to 50p unless it is increased in the rest of the UK undermine the case for tax devolution? David Eiser argues that there were always going to be constraints on the exercise of devolved powers and incumbent governments have to decide how these relate to the wider policy context.
 
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Scotland's fiscal framework: Assessing the agreement

The Smith Commission Agreement, published on 27 November 2014, set out proposals for substantial fiscal devolution to the Scottish Parliament. The Scotland Bill – due to receive Royal Assent shortly – will enshrine these powers in law.

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  • 21st June 2018

    New research conducted by the universities of Edinburgh and Glasgow suggests that a post-Brexit Scotland is likely to find itself losing out on much-needed low-skilled migrant labour from the European Economic Area (EEA) to English-speaking countries such as North America, Australia, and to countries within the EEA.

  • 19th June 2018

    Following the collapse of the Rajoy government following a corruption scandal, how does the new political landscape affect the constitutional debate in Catalonia? Prof Antonia María Ruiz Jiménez of Universidad Pablo de Olavide suggests that this apparently dramatic change will make relatively little difference.

  • 13th June 2018

    While populist leaders and movements make headlines worldwide, an often more subtle majority nationalism remains an endemic condition of the modern world. This phenomenon is comparatively understudied. The Centre on Constitutional Change invites calls for abstracts for an international workshop on the topic of majority nationalism, to be held in February 2019.

  • 31st May 2018

    The recent report by the Growth Commission contains some interesting ideas, says Michael Keating, but also makes some problematic assumptions.

  • 30th May 2018

    The Scottish and Welsh Governments worked together closely during their negotiations with the UK Government over those aspects of the EU (Withdrawal) Bill that related to devolution. Despite ultimately choosing different paths, say Hedydd Phylip and Greg Davies, this spirit of cooperation looks set to continue.

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