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Super ‘ devo -max’ and moves towards a federal Britain. Iain Mclean, Oxford University [email protected] For LSE Workshop 01.07.14. Outline of remarks. What is devo -max? All the political parties, including SNP, say they want it So do the Scottish people

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super devo max and moves towards a federal britain

Super ‘devo-max’ and moves towards a federal Britain

Iain Mclean, Oxford University

[email protected]

For LSE Workshop 01.07.14

outline of remarks
Outline of remarks
  • What is devo-max?
    • All the political parties, including SNP, say they want it
    • So do the Scottish people
    • But nobody has defined it
  • Building on Calman
    • Focus on taxing not spending
  • Or indy-minus
    • Why the White Paper scheme would actually be devo-max
what is devo max
What is devo-max?
  • Working definition: ‘more than Calman and less than independence’
  • On that definition, all parties including SNP are for devo-max
    • Can take Cons plan as an e.g. (the most radical and realistic of the unionist parties)
  • But devo-max is not on offer on 18.09.14
the strathclyde commission main points
The Strathclyde Commission – main points
  • SP to fix all rates and bands of income tax
  • Mini-OBR (‘Scottish Fiscal Commission’)
    • Comment: Scotland already watched by OBR and Stats Auth
  • State pension to stay with UK
  • Consider devolving other taxes
    • Comment – why not assign VAT, excises?
why the sg offer is really devo max not indy
Why the SG offer is really devo-max not indy
  • ‘Nothing will change’ again and again
    • E.g., BBC, monarchy
    • Accepts will have to use UK tax and welfare regimes until new ones ready
  • If rUK were to make shared currency offer it would come with v tight conditions (cf Carney, Macpherson)
  • They wd include control on tax-and-spend
building on calman
Building on Calman
  • It’s fashionable to say that Calman (≈ Scotland Act 2012) is dead on arrival.
  • All unionist parties want to go further
  • But almost nobody understands what Calman actually proposes
    • Matching marginal spend with marginal tax
    • 10p in £ of income tax is enough to achieve this
    • Devolving the whole of income tax doesn’t add a lot
how to max out devolution
How to max out devolution
  • Go tax by tax, not spending area by spending area
  • Focus on the big ones:
    • VAT
    • Corporation Tax
    • National Insurance.
  • By elimination, only NI offers much scope….
do we want social union or postcode lottery
Do we want social union or postcode lottery?
  • Most survey evidence says the people want social union
    • Therefore want benefit rates and terms to be constant UK-wide
    • But devolving NICs puts this in question
  • Would the people really want devo-max if they faced a consistency contraint?
devo max and fiscal federalism
Devo-max and fiscal federalism
  • Would it be just for Scotland?
  • Wales would prefer needs assessment (Holtham)
  • NI doesn’t know what it wants, except control of Corp Tax (dreadful idea – ask Amazon or Google)
  • North of England with Wales
  • London has the only REAL interest in f.f.
conclusion
Conclusion
  • Devo-max is not fiscal federalism
  • But Δtransparency on inter-regional tax-and-spend increases pressure for federalism
for further reading
For further reading
  • I McLean et al, Scotland’s Choices 2nd edn
  • I. McLean et al ed., Enlightening the Constitutional Debate
  • Report of the Strathclyde Commission
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