September 25, 2014

INSTEAD OF LIBERATING ONE THEY LIBERATED ALL:

Cameron's devolution move opens up 'Pandora's Box' on tax and spending (Stephen King, 9/22/14, Financial Times)

The terms of Scottish "Devo-Max" are unclear. If Gordon Brown's 12-Point Plan proves a reasonably accurate blueprint, Scotland will be able to both borrow more to fund infrastructure projects and set its own income tax. How much of this is genuinely new is unclear. The 2012 Scotland Act granted Holyrood income tax-setting powers - effective 2016 - and allowed the Scottish government to borrow up to £2bn a year via bond issuance to fund infrastructure.

What is more revolutionary for the UK's public finances is the possibility - alluded to by David Cameron, prime minister - that England, Wales and Northern Ireland would be given similar powers. George Osborne will be feeling a little uneasy: the idea fiscal decisions could be scattered to the four corners of the kingdom may make sense in Number 10 but Number 11 is unlikely to be so enthusiastic.

Putting aside the nature and characteristics of an "English parliament", devolution for all nations in the kingdom would presumably mean we'd soon be living in a world of local income taxes and local bond issuance: in other words, a fundamentally different world from the one UK citizens have inhabited.


Posted by at September 25, 2014 7:57 PM
  

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