Reform Scotland

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Fringe Debate at SNP Spring Conference 17 April
2009 Why we need fiscal powers
Amanda Harvie Graeme Blackett Jim Mather
MSP Stewart Hosie MP
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Welcome and Introduction
Amanda Harvie Trustee, Reform Scotland
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17th April 2009

• Reform Scotland

Reform Scotland is an independent, non-party
think tank that aims to set out a better way to
deliver increased economic prosperity and more
effective public services based on the
traditional Scottish principles of limited
government, diversity and personal
responsibility.
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17th April 2009

• Inform influence public policy debate

• Carrying out research using robust and objective
  methods
• Publishing reports and research papers on a range
  of public policy issues
• Issuing briefing notes and updates analysing
  developments in public policy
• Arranging seminars, lectures and other public
  events on public policy and related topics

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17th April 2009

• 2008/09 reports

• Powers for Growth
• Power for the Public
• Local Power
• Power to Protect
• Fiscal Powers
• Parent Power
• Patient Power
• www.reformscotland.com

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17th April 2009

• 2009/10 reports

• Transport
• Financing Infrastructure Projects
• Energy
• Planning
• The Voluntary Sector
• The Constraints on Economic Growth
• www.reformscotland.com

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Why we need fiscal powers
Graeme Blackett BiGGAR Economics
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17th April 2009

• Contents

• government expenditure revenue in Scotland
• problems with current arrangements
• a new model for fiscal powers
• policy recommendations

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• UK Government 20bn (06/07)

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• Scottish Government 30bn

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• Tax revenue from Scotland

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• Scotlands Fiscal Position

• 2006/07 expenditure revenue
• including geographic share of North Sea Oil
• some years expenditure gt revenue (transfers from
  rest UK)
• other years expenditure lt revenue (transfers to
  rest UK)
• until oil runs out or fiscal policy changes

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17th April 2009

• Problems with current arrangements

• lack of transparency leads to resentment north
  south of Border
• lack of financial accountability
• Scottish Parliament budget takes no account of
  needs in Scotland based on 1970s Barnett
  formula
• no relationship between public spending
  performance of Scottish economy
• no borrowing powers limits infrastructure
  investment options
• political debate in Scotland about distribution
  of public money, not increasing prosperity

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17th April 2009

• A new model starting point

• based on current division of spending powers, not
  constitutional change
• both Westminster Holyrood should raise what
  they spend
• both should have a range of tax powers
• tax revenues should accrue to level of government
  with associated power
• transparency on which taxes fund spending of
  which government

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• A new model the numbers

• Holyrood 30bn
• 60 income tax
• 60 oil
• 60 VAT assigned
• corporation tax
• fuel duties
• sin taxes
• capital gains
• etc.

• Westminster 20bn
• 40 income tax
• 40 oil
• 40 VAT assigned
• NI
• 1.5bn other

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17th April 2009

• Policy recommendations

• abolish Barnett Formula
• financial accountability governments
  responsible for raising what is spent
• UK solution body for English interests
• Scottish Exchequer, with borrowing powers
• not just revenues, but underlying law
• use the new powers lower simpler taxes to
  focus on economic growth

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Why we need fiscal powers
Jim Mather MSP
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Why we need fiscal powers
Stewart Hosie MP
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Why we need fiscal powers
Debate and Questions
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Why we need fiscal powers
Contact Reform Scotland www.reformscotland.com