The case for Scottish fiscal autonomy

Those of us in favour of “fiscal autonomy” for Scotland have been sent homewards to think again by the Calman Commission (pdf, here), which looks at the asymmetrical mess which calls itself devolution. But it’s not all bad news. It had been expected to dump on the idea, but is fairly clear about the need to abolish the Barnett Formula which is even denounced by its author, Lord Barnett. This is what the commission has to say:

“With no substantive tax raising power, the Scottish Parliament is funded by a block grant, needed to address a near total vertical fiscal imbalance. Voters are not exposed to tax and spending decisions at the margin, meaning that a degree of political accountability for the taxation which supports spending decisions is missing. The disconnection between revenues and economic performance also means that the incentives to develop growth are secondary rather than immediate. The current arrangements also mean that the Scottish Parliament lacks a degree of autonomy – its scope to influence the size of its budget is limited whilst it is not able to use fiscal measures to influence behaviours.”