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Research project
Article
The future of the UK and Scotland
Date started: 19 November 2012
This research programme aims to clarify some of the fiscal choices that might face Scotland were it to become independent.

This work is carried out under the auspices of the Centre for Microeconomic Analysis of Public Policy, an ESRC research centre hosted by the IFS. The project forms part of a wider ESRC programme of work addressing issues around the future of Scotland.

The research will look at the following issues:

  • A comparison of key income, labour market and other economic variables in Scotland and other countries and regions of the UK;
  • A detailed description of Scotland’s current fiscal situation, starting with a detailed analysis of Government Expenditure and Revenues Scotland (GERS);
 
  • Tax options open to an independent Scotland;
  • A comparison of public spending, and changes in spending, between Scotland and other parts of the UK. This will illustrate different levels and patterns of spending and show where different choices have been made. It will look both at public service spending and spending on, and receipt of, particular welfare benefits;
  • There is also uncertainty over how responsibility for some other obligations would be allocated. For example, how might the accrued liabilities, and in some cases the assets, of public service pension schemes be shared? We will explain the options and set out how important those choices are likely to be;
  • Long term fiscal projections for Scotland. Building on the work of the Office for Budget Responsibility (OBR) and the European Commission we will use information on demographic trends, tax revenues and spending patterns to look at fiscal scenarios for Scotland over the next fifty years. This will provide a clear illustration of the choices available to an independent Scotland within the constraints of fiscal sustainability. This is to be the most substantial and important element of the work. We will also include an assessment of the appropriate fiscal framework for an independent Scotland, in particular given the role of revenues from North Sea oil and gas.

ESRC programme of work: The future of the UK and Scotland

The ESRC is supporting a programme of work addressing issues around the future of Scotland. The work will provide robust independent research based evidence. It will aim to both inform the debate in the run-up to the referendum and assist in planning across a wide range of areas which will be affected by the outcome of the vote, whether for independence or the Union. These include voting, culture and identity, business intelligence, fiscal and monetary policy, policy development, building of new constitutional arrangements, and defence and administrative practice - particularly in public service delivery. One of the strands focuses on supporting new work at current major ESRC investments before and potentially after the vote.

Related publications
Publications by type

12 March 2014
Observations
Article
Today, the Scottish Government published the latest version of its annual Government Expenditure and Revenues Scotland (GERS) publication. For the first time in 5 years GERS suggests that Scotland's net fiscal balance, or budget deficit, was worse than that of the UK as a whole even when allocating North Sea revenues to Scotland on an illustrative geographic basis. Until now these revenues have been enough to more than outweigh the higher public spending per head in Scotland than in the rest of the UK. But not in 2012–13.
04 March 2014
Observations
Article
The latest public finance forecasts published by the Office for Budget Responsibility (OBR) in December presented a better outlook for the UK than had been suggested by their March forecast. This is good news for the UK and Scotland in the short-term but much of the improved short-term outlook comes at the expense of reduced scope for economic recovery after 2018–19. Also the one area of greater weakness in the OBR’s latest forecast – revenues from oil and gas production – has substantially more adverse consequences for Scotland’s fiscal position than for the UK as a whole. In short, the new forecasts do little to diminish the tough choices that will face Scotland (and, to a lesser extent, the UK) if it is to achieve long-run fiscal sustainability.
22 January 2014
Presentations
Article
This presentation was given to the Scottish Parliament's Finance Committee on 22 January 2014.
26 November 2013
Newspaper Articles
Article
Two short analysis pieces on tax and welfare. This analysis is published by the BBC, who asked several experts to give a viewpoint on aspects of the Scottish government White Paper 'Scotland's Future'.
18 November 2013
Presentations
Article
This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013
18 November 2013
Presentations
Article
This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013
18 November 2013
Presentations
Article
This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013
18 November 2013
IFS Working Papers
Article
This working paper describes how the IFS’s model of the UK’s long-run public finances (and those of its constituent nations) is constructed.
18 November 2013
IFS Press Releases
Article
An independent Scotland would require a significant cut in spending or increase in taxes, over and above that already announced by the UK government, in order to put their long-term public finances onto a sustainable footing.
18 November 2013
IFS Reports
Article
In this report, we examine the long-run fiscal pressures that an independent Scotland may face, how these would differ from those facing the UK, and the size of the fiscal consolidation that may be required to put Scotland’s public finances on a sustainable path.
18 November 2013
Presentations
Article
This paper was given at the IFS event 'The fiscal implications of an independent Scotland' on 18 November 2013
29 October 2013
IFS Briefing Notes
Article
This Briefing Note looks at the way that tax revenue in Scotland is currently delivered and at the reform options that would be open to an independent Scotland.
25 October 2013
External publications
Article
This blogpost examines the kinds of tax and spending decisions that may face a newly independent Scotland in its first few years.
19 September 2013
Newspaper Articles
Article
Paul Johnson and David Phillips in the Scotsman.
19 September 2013
IFS Press Releases
Article
Like the UK government, the government of a Scotland independent from 2016 would face difficult choices about how much to spend on public services.
19 September 2013
Presentations
Article
This presentation was given at the International Conference on the Economics of Constitutional Change on 19th September 2013.
19 September 2013
IFS Briefing Notes
Article
This briefing note aims to describe the patterns of public service expenditure in Scotland and to set out a number of issues for the future.
31 July 2013
IFS Briefing Notes
Article
There has been a growing debate about how the benefits system may be affected if Scotland becomes independent. This briefing note aims to describe the patterns of benefit expenditure in Scotland and set out a number of issues for the future.
31 July 2013
IFS Press Releases
Article
A new IFS report, funded by the Economic and Social Research Council (ESRC), looks at the benefit system in the context of 2014 Scottish independence referendum.
13 June 2013
Presentations
Article
Presentation given at an ESRC event on Scotland at Parliament on 12 June 2013
02 May 2013
Presentations
Article
Paper given at the ESRC conference 'The Future of the UK and Scotland' 2-3 May 2013
19 November 2012
IFS Press Releases
Article
The short run fiscal situation facing an independent Scotland would not look very dissimilar to that facing the UK as a whole, assuming that it would take a “geographical share” of North Sea oil and gas revenues.
19 November 2012
IFS Briefing Notes
Article
This briefing note indicates the fiscal consequences that the Scottish people will need to consider in making a decision over whether to seek independence from the UK.

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