The Smith Commission proposals: the unresolved issue of the “fiscal framework”

The Smith Commission has published proposals for further devolution of powers to Scotland and we now know what is to be devolved. The UK and Scottish Government now have the task of implementing the changes and designing a new fiscal framework in which the new powers will operate. This presentation was given at an away day for the Scottish Parliament Finance Committee in preparation for its enquiry on the Smith Commission proposal and Scotland's fiscal framework. It focuses on the issue of adjusting the block grant to account for additional devolution, and how this seemingly technical issue relates fundamentally to the "no detriment" principles the Commission advocated. It also looks at the complexities associated with the calculation of 'compensating transfers' when the policies of one government affect the revenues or spending of another, and of the difficulties of implementing English Votes for English Laws for policies with fiscal implications.