Scotland could ‘improve’ on Westminster tax system

 

A leading academic has said with independence, Scotland could improve on Westminster’s tax systems and would gain opportunities from higher spending.

Speaking at an Economic and Social Research Council seminar in Westminster on the future of the UK and Scotland, the Deputy Director of the Institute for Fiscal Studies (IFS), Carl Emmerson, said opportunities would arise for an independent Scotland from the fact UK tax systems have much to be improved upon, and there are opportunities from higher spending such as defence spending being higher than most other small countries. He also said that in recent years, a geographic share of North Sea oil revenues would have been enough to finance the higher public spending per head in Scotland.

The comments follow a recent IFS report which made the case that Scotland is in a stronger financial position than the UK as a whole, and as an independent country would have lower debt levels than the rest of the UK.

A recent poll shows the majority of Scots want the Scottish Parliament to control taxes, rather than Westminster.

Commenting, Scottish National Party MP and Treasury Select Committee member Stewart Hosie MP said:

“These comments are very welcome, and reflect what was said in the IFS report - which confirmed what the SNP has been saying for years – that Scotland is in a stronger financial position than the rest of the UK.

“It is no secret that the Scottish Government and the majority of people in Scotland take a different view from the UK Government on the steps necessary to deliver economic recovery. Indeed, the majority of people in Scotland want control of taxes to be with the Scotland over London because they know we could do it better.

“John Swinney, Cabinet Secretary for Finance, has outlined plans to establish Revenue Scotland and put in place a framework for the administration of devolved taxes in Scotland and the Scottish Parliament will shortly pass its first tax bill, reforming the outdated and unfair system of Stamp Duty with a fairer system that more closely reflects ability to pay.

“Looking at the experience of the Scottish Government having some devolved control over our economy we can see what can be done if we exercise control and develop approaches that are in tune with the needs and aspirations of the people of Scotland. With the powers we have, we have the most competitive business rates regime, and have frozen the council tax to help hard pressed households.

“The UK Government’s attempts at economic recovery are hitting the most disadvantaged people in our society. Independence would mean no longer seeing tax cuts for millionaires at the same time as welfare cuts –such as the Bedroom Tax- for the poor, against the wishes of Scottish MPs.”

ENDS

Notes to Editors: 

1) The IFS lecture can be found here:http://www.ifs.org.uk/conferences/scottishindependence_fiscalcontext_ce2013.pdf

2) Last year’s IFS report:

Read "Scottish independence - the fiscal context" in full here: http://www.ifs.org.uk/bns/bn709thw(00)zzx.pdf

The report confirms the following:

The appalling handling of the UK economy – a ‘double dip’ recession P.4

UK has cut the Scottish Budget by 8.6% (revenue) and 32.1% (Capital) in real terms P.7

That Scottish GDP (incl. Geographic oil share) of £27,732 per person – 117% of UK average (for 2010/11) P.9

Scottish onshore taxes were HIGHER (as a share of GDP) than the UK average at 37.9% of GDP v 37.5% of GDP  P.13

Scotland’s 30 year average position of better than the UK – Figures 8 and 9 (Current Account and Net fiscal position)  P.18

Five year position better than UK incl. 2 current account surpluses vs five UK deficits  - Table 1 P.19

We are likely to have a LOWER debt to GDP ratio on Independence  P.25

3) Poll on Tax:

Yougov/SNP (Fieldwork: 20th-22nd March 2013)

Sample size: 1105 Scottish adults

Which government do you think should be responsible for all tax and spending decisions in Scotland, including tax revenues from oil and gas?

The UK government               35

The Scottish government 52

Don't know           13

4) New employment statistics:http://www.scotland.gov.uk/News/Releases/2013/06/employment12062013

5) For labour market statistics, see http://www.scotland.gov.uk/News/Releases/2013/06/LMS12062013

6) Revenue Scotland :http://www.scotland.gov.uk/News/Releases/2013/06/TCF13062013