The coalition agreement’s commitment to devolve more powers from Westminster to Scotland was one aspect that helped it win strong support from Scottish Liberal Democrats as further devolution has been a long-running Lib Dem demand. Now the Scotland Bill is moving through Parliament to turn those commitments into action.
The BBC reports:
Scottish Secretary Michael Moore [Lib Dem] said the Scotland Bill, giving Holyrood increased responsibility for borrowing, would bring a new phase in devolution.
Mr Moore said the legislation contained the right balance of powers and would give Holyrood greater accountability…
The most eye-catching proposals in the Scotland Bill are plans to give Holyrood limited controls on setting income tax in Scotland, and greater borrowing powers.
It would create a Scottish income tax by cutting 10p off the basic higher 50p rate for Scottish taxpayers, adjusting the block grant in proportion, and allowing Holyrood to apply the tax at a level of its choosing.
You can read the full report here.
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5 Comments
“It would create a Scottish income tax by cutting 10p off the basic higher 50p rate for Scottish taxpayers, adjusting the block grant in proportion, and allowing Holyrood to apply the tax at a level of its choosing.”
So in theory, could they put the higher rate up to 60%, if they wanted to that is???
Interesting, but remember that Scotland receives more money per capita in state support than southern areas because of the problems of endemic poverty and poor health. This proposal would seem to permit the abandoning of this and its replacement with a strategy of taxing the poor and sick to pay for the poor and sick. I would expect no less of a Tory government.
@jim, I think that’s the idea – it was certainly one of the concerns that the original Scotland Act only allowed variation of the basic rate, and not the higher rate.
If they did ever use it, though, I wonder if we’d see major development of “executive” housing around Berwick – it is on the edge of commuting distance from Edinburgh, where probably a fair chunk of the really big earners live.
@g – read the post. The Barnett formula would be adjusted to cut the block grant for the equivalent of the 10p on the higher rate. If it goes through, the first thing any Scottish govt. would do would be to top it back up again to reach parity with England. If the higher rate was then reduced by the chancellor back to 40%, Scotland could keep it at 50% to raise more money for spending, or alternatively reduce the basic rate – benefitting lower earners – by an equivalent amount.
As someone who won’t be voting Lib Dem again in the foreseeable future, I think the Calman proposals are a complete fudge. The reason I voted Lib Dem time and time again was in the belief that the party was in favour of a federal UK. In Scotland we were being constantly told by anyone in a gold rosette that that meant full fiscal autonomy and a referendum on it. What do we get, a mess which isn’t even a half-way house.
Until the Lib Dems get their act together, they’ll continue to lose supporters like myself.