Home Rule is simply arguing that we should be raising the money to pay for Scottish services, as opposed to simply spending it
Supporters of the Smith Commission proposals loudly claim that the powers on offer will give Scotland more tax and spending responsibilities than nearly any other tier of government in the world below the nation-state level.
While the Smith proposals would give more responsibility in these areas than many other countries, they do not undermine the arguments in favour of going beyond Smith, which was at the end of the day a rushed compromise and will soon, like Calman, be overtaken by events. Efforts will therefore continue to secure a proper home rule settlement for Scotland: in the aftermath of the referendum, this is a next step that’s supported by the vast majority of both Yes and No voters.
Scotland still has a large fiscal gap between the money spent by the Scottish Government and the taxes it collects and manages, raising just 22 per cent of what it spends. The Smith Commission proposals would increase this to only 38 per cent.
Having a large fiscal gap between the level of control over taxation and expenditure greatly limits the autonomy of a Scottish Government – a problem that was highlighted in the Labour Party’s devolution commission report. This blurs accountability and transparency, and can lead to arguments from the rest of the UK that they are paying for Scottish public services – such as those arguments surrounding Jim Murphy’s plan to use Scotland’s share of Labour’s Mansion Tax, which would primarily affect London, to pay for extra nurses in Scotland.
The other key proposal here is that the Scottish Parliament would be able to vary the nature of the taxes used, not just the rates and thresholds for existing taxes. I’d want to see the same freedoms extended to local authorities too: it’s hardly a surprise that turnout is so low when so few real decisions are made locally by councillors.
Many countries have layers of government responsible for raising a greater level of their own expenditure. In some countries, like Canada, provincial and territorial governments have a higher level of both tax powers and expenditure levels and a smaller fiscal gap. In other countries, like Sweden, they have a lower level of power over expenditure but a higher level of tax powers, and therefore a lower fiscal gap.
However, looking at international data can also be misleading as it more often than not focuses on the norm, leaving out the exception. As a result, in countries with asymmetric devolution – in other words, where some parts of the country have greater powers than others, such as the UK, India or Spain – those areas with greater powers can be overlooked.
For example, the OECD said in 2013 that 4.87 per cent of tax and 25 per cent of expenditure is devolved in the UK. However, this does not cover Scotland, where the levels devolved were 10 per cent (pre-Calman) and 59 per cent currently.
Regardless of how tax and expenditure powers are organised overseas, greater decentralisation is a good thing. Some countries may not go further down this path because central governments fear losing control of fiscal policy, while some local or devolved administrations fear taking unpopular tax decisions, but fiscal decentralisation offers many benefits.
It is worth referring to Westminster’s Communities and Local Government Committee report from June 2014 which looked at devolution for England and highlighted the benefits of greater fiscal devolution:
“Fiscal devolution presents an opportunity to improve accountability, to hold local politicians to account for their successes and failures and, therefore, to improve democracy.”
Scotland has had a distinctive constitutional settlement, even prior to devolution. We may have been part of the UK, but we have always had independent education and legal systems. Since 1999, with responsibility over substantial areas of expenditure, services like Scotland’s NHS have diverged from the rest of the UK, especially over successive UK governments’ privatisation agenda.
Home Rule is simply arguing that we should be raising the money to pay for these services, as opposed to simply spending it.
The UK as a whole, and Scotland, are very diverse areas, with different needs. Home Rule would offer greater potential for policy opportunities as well solutions to Scotland’s persistent problems of inequality to be pursued. Each Scottish administration since 1999 has tried to address these issues, but can only tinker around the edges because key welfare powers remain at Westminster.
Home Rule is a rare opportunity for a bit of consensus. For Yes voters like me, it is exactly that, a step towards independence and more accountability. But for No voters, it’s a coherent and principled devolution package which might instead support the Union for the long term. Consider it a sensible crossroads in the woods, rather than yet another confusing thrash through the constitutional undergrowth.
For more information on the Campaign for Scottish Home Rule go to www.homerule.scot
James Mackenzie is a steering group member of the Campaign for Scottish Home Rule, and former Head of Media for the Green MSPs. He is the co-founder of Cutbot
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15 Responses to “The case for Home Rule”
Dave Stewart
How did that comment betray a fear of Scotland or Scottish people?
I think it was fairly reasonable. Why should Scotland get more powers to offer Scottish people more than everyone else in the rest of the UK. If Scotland gets it then the other regions of the UK should as well.
I personally think that we should have more devolved powers all over the UK ideally through a federalized system. It is an indefensible position to demand more powers for Scotland and not for the other regions of the UK.
Another worry that I have is the affect that this sort of policy (if extended across all of the UK but also specifically relating to Scotland) will have on the ability of the UK to transfer wealth (though the tax system) from the most affluent areas of the UK to the less well off areas. If Scotland is allowed this form of power then you cannot really argue that the South East shouldn’t also be allowed it and if that happens and fiscal transfers dry up from the southeast large parts of this country (the UK) will be in a lot of trouble.
Granted with careful design these problems could be overcome (they manage these sorts of fiscal transfers in the US after all) however rushing into any fundamental change to how our country is made up and works together would be foolish. That’s why I am very opposed to rushing legislation and felt right from the outset that Labours suggestion of a constitutional congress of some kind to make these decisions in a calm, well thought through and rational way was a good idea.
It was very disappointing after the referendum to see the political parties playing politics immediately but unfortunately that is the system we have.
CGR
Scotland lost at home to Wales yesterday.
Mmm… Must be the fault of those horrid English !!!!
Leon Wolfeson
That’s nice, do keep describing yourself.
For myself, I’m British.
Leon Wolfeson
Quite. A proper federal structure is a sensible answer. It’s not, I understand, appealing to Scottish Nationalists but that gets filed under “not my problem”.
A constitutional congress/convention would be a good thing.
Not least because I feel that there’s a decent chance that a different voting system for Westminster would arise from it.
sarntcrip
i agree devolution is completely flawed concept either we are a united kingdom all for one and one for all,economically or we are not why should scots get more welfare per capita?why should english people have to pay more for tuition fees,more for prescriptions scotland voted NO TO LEAVING THE UK STAYING IN MEANS WE SHOULD ALL BE TREATED AS ONE
I DON’T HATE SCOTS MY GRANDFATHER WAS BORN IN GREENOCK