Financing regional government in the UK: some issues.

<p>Over the last decade there has been a resurgence of interest in the possibility of some measure of devolution to regional governments for at least parts of the United Kingdom. In Scotland, the debate has been particularly advanced, and three of the four main political parties in Scotland are committed to substantial devolution. As in the unsuccessful devolution proposals of 1979, the proposals for Scotland are echoed by similar, though less unequivocal, devolution proposals for Wales. Devolution in England has attracted less enthusiasm, and much less vigorous debate, except in a few regions, notably the North East. Regional government raises a number of finance questions, which are the subject of this paper. The issue of finance has been most prominent in the debate over devolution in Scotland, with intense interest focusing on, at one extreme, the fiscal position of Scotland if it were wholly dependent on Scottish tax revenues to finance Scottish expenditures, and, at the other extreme, on the adequacy and/or effects of giving a Scottish Parliament power to vary income tax rates within a three percentage point band. There has been much less discussion of other finance issues.</p>