Alex Massie Alex Massie

Life after Scottish Independence: lower taxes, lower spending, no free lunches

Every so often a report is published that cheers you up. Not because it contains any particularly good news but simply – that is to say, selfishly – because it appears to support notions you’ve held for some time.

So trebles all round for the Institute for Fiscal Studies whose latest report on life in Scotland after independence is published today. Sponsored by the Economic and Social Research Council, the report concludes that ‘an independent Scotland could face pressure between [a] need to lower tax rates and [the] need to fix its public finances’. Well, yeah. Some of us have been making this kind of case for some time now. It’s just scaremongering, apparently.

Except, of course, it is not. I’ve never supposed an independent Scotland must fail. Paradoxically, the case for Union would be far weaker if an independent Scotland was liable to be an economic basket-case. It would be one indication that, at least in this respect, the Union had failed.

Be that as it may it has long been obvious that there’d be some ticklish choices to be made after independence and equally obvious that the first years as a brave new country might require some awkward adjustments to be made.

That means there would opportunities to do some things differently. That is, better. As the IFS argue: ‘There would be plenty of scope for an independent Scotland to improve its tax system, though to do so would require a Scottish government to make the sorts of bold decisions over tax reform that successive UK governments have failed to make.’

Nationalists will also be pleased by this part of the IFS report: ‘Scottish tax revenues per person are very similar to those in the UK as a whole if North Sea oil revenues are allocated in proportion to population but significantly higher if oil revenues are allocated geographically.

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