What’s on offer to stay with the UK?

What’s on offer to stay with the UK?

Comments Off

Crucial to anyone’s decision in voting for or against independence will surely be what the alternates are. Today marked the last in a series of “devolution plus” offers by the parties campaigning for Scotland to remain part of the Union.

The Strathclyde Commission on the Future for Scotland by the Scottish Conservatives – which will be bound in to the Conservative party manifesto for the next UK elections- was launched to some fanfare…

But what else is on offer? Enclosed are all the links to the detailed reports from each of the political parties opposing Independence alongside relatively detailed summaries.

In short order here are the mainstay’s of each of their offerings:

Conservatives:

  • handing powers over income tax to Holyrood, with the setting of rates and bands for income tax in Scotland decided by MSPs. (tax free personal allowances remain to be set by Westminster)
  • establishing a Scottish version of the Office for Budget Responsibility,an independent Scottish Fiscal Commission, producing official macro-economic and fiscal forecasts.
  • establishing a committee representing all the legislatures of the UK.
  • analyse whether a share of Scottish VAT receipts could be assigned to the Scottish parliament, (EU law prevents devolution of VAT).
  • responsibility for the state pension would remain with the UK.
  • removing barriers from Holyrood supplementing UK benefits out of its own budgets, including housing benefit and attendance allowance.

Labour:

  • Over and above powers conferred by the Scotland Act the Scottish Parliament will be given the power to raise an additional £ 2 billion
  • Widening the variation in income tax in the Scotland Act by half from 10p to 15p (in 2016 Scotland is given responsibility to vary the tax rate up to 10p from the current 3p)
  • Power to increase (not decrease) tax in the Higher and additional band categories
  • VAT, national insurance contributions, corporation tax, alcohol, tobacco and fuel duties, climate change levy, insurance premium tax, vehicle excise duty, inheritance tax, capital gains tax and tax on oil receipts should remain reserved i.e. the Scottish Parliament would not be given control over these.

Liberal Democrats:

Creation of a Federal system of Government with in the UK giving the Scottish Parliament:

  • Powers over income tax, bands and rates.
  • Powers over inheritance tax and capital gains tax. Combined with income tax and existing powers over stamp duty the Scottish Parliament would have control over substantial tax levers on income and wealth.
  • Control by the Scottish Parliament of the aggregates levy and air passenger duty to broaden the powers on the environment and transport that the Scottish Parliament already exercises.
  • The proceeds of corporation tax to be assigned to the Scottish Parliament to give it a stake in the fruits of improved economic performance.
  • Fiscal federalism would be assisted by a new needs-based payment system, to be agreed by the federal United Kingdom Government, the Scottish Parliament and the relevant assemblies to ensure fiscal equity across the UK.

DETAILED REPORTS ON EACH PARTY’S OFFERING ON INCREASED DEVOLUTION:

SUMMARY
http://www.scottishlabour.org.uk/campaigns/entry/devolution-commission

  • Labour will give the Scottish Parliament the power to raise around £2 billion more in revenues beyond the recent Scotland Act, so that it raises about 40 per cent of its budget from its own resources.
  • We will do this by widening the variation in income tax in the Scotland Act by half from 10p to 15p.
  • This will mean that three-quarters of basic rate income tax in Scotland will be under the control of the Scottish Parliament.
  • The Scotland Act enables the Scottish Parliament to increase or decrease income tax rates in Scotland. In addition to extending this power, we will also introduce new Scottish Progressive Rates of Income Tax, so that the Scottish Parliament can increase the rates of tax in the higher and additional bands. For the first time, the Scottish Parliament will be able to alter both the level of tax and the progressivity of the tax system, but without the risk that a Scottish Government could force tax competition within the UK by cutting only the top rates, to the detriment of public services. Labour in the Scottish Parliament would be able to use these powers if a UK Government did not set fair taxes at these levels.
  • Our interim report considered whether there was scope for devolution of air passenger duty, subject particularly to EU rules. We received a number of considered representations, and continue to note that departures from Highlands and Islands airports are already exempt from this tax. Given the pressure to reduce this tax from airlines and others and the risk of tax competition which would be created, we are not now convinced that devolution should be progressed until further consideration is given to the environmental impact and how else this tax might be reformed
  • We concluded that, for a variety of good reasons, VAT, national insurance contributions, corporation tax, alcohol, tobacco and fuel duties, climate change levy, insurance premium tax, vehicle excise duty, inheritance tax, capital gains tax and tax on oil receipts should remain reserved. However we do support, in principle, a derogation to allow a lower rate of fuel duty to be charged in remote rural areas of the Highlands and Islands.
  • As we made clear in our interim report, the Barnett formula should remain as the funding mechanism for public services in Scotland. Under our proposal, as is the case under the Scotland Act, the Barnett grant will be reduced to take account of the fact that the Scottish Parliament will have a revenue stream of its own. As a result the Scottish Parliament will be funded partly by grant calculated under the Barnett formula and partly by its own resources – principally Scottish income tax payers.

SUMMARY
http://www.scottishconservatives.com/wordpress/wp-content/uploads/2014/06/Strathclyde_Commission_14.pdf

Financial

  • The Scottish Parliament should become responsible for setting rates and bands of income tax throughout Scotland.
  • A new Scottish Fiscal Commission should be created, independent of Government, and should be charged with producing official macro- economic and fiscal forecasts in Scotland.
  • Scottish versions of the Personal Tax Statements should be issued by HMRC, highlighting taxes under the control of the Scottish Parliament.
  • Responsibility for the state pension should remain with the UK.
  • There is a case for devolving housing benefit and attendance allowance; additionally there is a case for conferring on the Scottish Parliament the power to supplement welfare benefits legislated for at UK level.

Parliamentary and Governmental Reform

  • New rules should be considered by the Scottish Parliament to improve legislative scrutiny with stronger checks and balances without a Second Chamber – for instance providing for Chairs of key Committees to come from the Opposition.
  • Senior civil servants from Scotland, as part of their career progression, should be expected (and supported) to serve in other Departments of State in the rest of the United Kingdom.
  • The centralisation of powers from local to central government should be reversed and real devolution should be given to individuals with a greater role for civic society and local government.

The Future

  • A Committee of all the Parliaments and Assemblies of the United Kingdom should be created to consider the developing role of the United Kingdom, its Parliaments and Assemblies and their respective powers, representation and financing.

SUMMARY
http://scotlibdems.org.uk/files/Federalism%20-%20the%20best%20future%20for%20Scotland%20web.pdf

The shape of a federal United Kingdom

The report sets out how federalism would work in practice.

  • Formalised partnership-working, a model of cooperative governmental action first suggested in the Steel Commission report. This would require a new federal government to consult with the other legislatures across the United Kingdom on policies that would impact on their statutory responsibilities, and vice versa.
  • A new, innovative ‘power of initiation’, enabling one government to request formally that another take specific necessary action to facilitate policy objectives in an area where the other government has the policy lead.
  • Reform to certain United Kingdom-wide institutions such as Her Majesty’s Revenue and Customs in recognition of the fact that they will be expected to serve all parliaments and jurisdictions within the United Kingdom.

Fiscal federalism – powers and responsibility

Setting out for the first time how fiscal federalism will support a move to a federal solution for the United Kingdom, the Commission recommends that the Scottish
Scottish Liberal Democrats 2012 910
Federalism: the best future for Scotland

Parliament be allocated tax levers enabling it to raise the greater part of its own spending.

  • Powers over income tax, bands and rates.
  • Powers over inheritance tax and capital gains tax. Combined with income tax and existing powers over stamp duty the Scottish Parliament would have control over substantial tax levers on income and wealth.
  • Control by the Scottish Parliament of the aggregates levy and air passenger duty to broaden the powers on the environment and transport that the Scottish Parliament already exercises.

The importance of retaining the single United Kingdom market and unified systems to help business is promoted throughout these recommendations.

  • Laws and regulations affecting companies and employment kept at a UK-wide level.
  • An additional power for the Scottish Government to highlight specific intra- Scotland competition matters to the United Kingdom competition authorities.
  • The proceeds of corporation tax to be assigned to the Scottish Parliament to give it a stake in the fruits of improved economic performance.

Fiscal federalism would be assisted by a new needs-based payment system, to be agreed by the federal United Kingdom Government, the Scottish Parliament and the relevant assemblies to ensure fiscal equity across the UK. The report accepts that the Barnett Formula would continue to operate until a new formula is agreed.

New borrowing powers would allow the Scottish Government to balance the economic cycle and take long-term decisions on investment.

Under the Liberal Democrats’ Scottish “home rule” vision, Holyrood would raise and spend most of its own taxes and borrow on its own accord.

Scottish National Party

By way of balance there is of course the Scottish Government’s White Paper on what independence could mean for Scotland…

Key aspects of that offer include:

  • Decisions on all aspects of taxation – personal and corporation tax
  • Universal system of early learning and childcare
  • Removal of all nuclear weapons form Scotland
  • Full pension rights protected
  • Creation of all the necessary infrastructure to function as an independent state

http://www.scotland.gov.uk/Publications/2013/11/9348/downloads#res439021

To download this article, please click here

Tags:

Newsletter

Back to Top