|Date:||12 March 2015|
|Contacts:||Paul Johnson and David Phillips|
Building on its highly cited work in the run up the Scottish referendum, the IFS has continued to analyse and evaluate the issues facing Scotland and the UK as plans are made for further devolution. IFS researchers have examined how the Barnett formula deals with business rates, a tax already devolved, and analysed the unanswered questions about the the new fiscal framework that the Smith Commission's proposals for further tax and welfare devolution would require. Both pieces of work received wide coverage, and IFS staff were called to give evidence at both the Treasury and Scottish Affairs committees, and the Scottish Parliament Finance Committee.
The Scottish National Party (SNP) has suggested that the Smith Commission's proposals do not go far enough and have called for "full fiscal autonomy" whereby Scotland would keep all taxes and be responsible for all spending (including making transfers to the UK government to cover defence, foreign affairs and interest payments on Scotland's share of the UK's existing debt). It has also proposed that the UK government should spend more in the coming years than any of the main UK parties have suggested.
Analysing what a fiscally autonomous Scotland's finances might look like, and what the SNP's plans for public spending for the UK as a whole might entail is therefore crucial. IFS work here has received wide coverage in the media, and has been the key issue for First Minister's Questions on the 12 and 19 March.
Press coverage of this presentation included articles in the Times (Scotland) and the Herald:
Converging economic policies pave way for Labour-SNP pact, The Times (Scotland), 11/03/2015, p.2, Lindsay Mcintosh
Spending study adds weight to Labour-SNP coalition theory, The Herald, 11/03/2015, p.6, Magnus Gardham
IFS analysis by David Phillips on 11 March using the annual Government Expenditure and Revenues Scotland (GERS)was covered widely in Scotland:
Plunging oil prices leave Scotland with growing public deficit, thinktank warns, The Guardian, p. 11, Severin Carrell, 12/03/15
Sturgeon's fiscal vow to cost Scots £800, The Times (Scotland), p. 1, Lindsay Mcintosh, 12/03/15
Fiscal autonomy 'would require tax rises', The Daily Telegraph (Scotland), p. 1, Simon Johnson, 12/03/15
Sturgeon defiant on devo max as deficit hits £12bn, The Herald, p. 1, Magnus Gardham, 12/03/15
Devo max would pose a serious economic challenge for Scotland, The Herald, p. 6, Magnus Gardham, 12/03/15
GERS bluster a distraction to addressing challenges ahead, The Herald, p. 11, Iain Macwhirter, 12/03/15
Pro-Union parties seize on tax and spending figures which show referendum 'No' vote saved Scotland £4billion in public spending, Daily Record online, Torcuil Crichton
Scotland's sticky finances, BBC News online, Douglas Fraser’s blog
Deficit blow for Sturgeon, Daily Express (Scotland), p. 1, Paul Gilbride, 12/03/15
Labour deal with Nicola 'will cost us £800 each', Daily Mail (Scotland), p. 9, Alan Roden, 12/03/15
IFS warning on full Scots autonomy, The Courier and Advertiser (Dundee), p. 16, Kieran Andrews, 12/03/15
Public spending highest in Britain, Press Association, in Montrose Review and other local papers
Price could be paid for devolution, Press and Journal, p. 12, David Phillips, 12/03/15
Scotland remains in the red while the outlook depends on North Sea oil, The Scotsman, p. 7, John Mclaren (Fiscal Affairs Scotland), 12/03/15