UK Government plans to devolve financial levers to Scotland – and power to abolish the Bedroom Tax at will

The Scottish Government’s familiar mantra that Scotland needs ‘the levers’ of financial power in it own hands appears to have found the ear of the UK Government.

Today’s, 22nd December, national media are reporting that the UK Government is prepared to devolve to Scotland total control of income tax and of housing benefit.

Senior Scottish politicians at Westminster, former Chancellor, Alistair Darlig and current Scottish Secretary, Alastair Carmichael, are quoted as supporting this development, with Darling saying that the existing devolution of housing policy will make full sense when it can be associated with control over housing benefit.

Carmichael has pointed out that giving Scotland total control of income tax – if that is what emerges from forthcoming discussions at the various party Spring conferences – would enable the Scottish Government independently to set its own income tax regimes, collect the revenues and control the spending of those revenues.

Simultaneously being given the power to abolish the Bedroom Tax in Scotland at a stroke, is an interesting development.

It seems a recognition that different values obtain in different cultures of the union and that Scotland, with its long socialist traditions, would appear to have a settled will to accept higher levels of income tax to pay for a more generous welfare regime.

This move has to be seen as a triumph for the SNP Government, successfully making the case for the logic of local control in such matters, of being able to tune the  taxing and spending regimes to the value-set of a constituent nation of the UK.

It also resets the balance the current Scottish Government continues to claim is skewed against Scotland, saying that this country contributes more to the UK exchequer annually than it gets back, even through what is generally considered to be a generous Barnet formula.

With total power over income tax, Scotland will retain and use such revenues within its own borders.

And the star on the top of the tree?

Devolving these key financial and social levers within the UK means that Scotland will continue to be part of the crucial sterling zone of which we have been a member for so long.

This has to be something of a ‘win win’ for Scotland.

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Related Articles & Comments

  • This is far from a ‘win win’ for the current Scottish government or the Scottish people, more of a political master stroke for Westminster.

    As an accountant here in Scotland I’m surprised that the Better together campaign hasn’t wheeled this one out before now.

    Two income tax zones in one country, a nightmare for any devolved government and an accountants dream. I’m sure Osbourne has had KPMG doing the number crunching!

    The political beauty of this strategy is that it’s very difficult in a sound bite to explain why it wouldn’t be in the interest of Scotland.

    Hot debate. What do you think? Thumb up 20 Thumb down 4

    Mike Stroud December 22, 2013 4:19 pm Reply
  • No doubt the SNP will still be able to find cause for complaint.

    Hot debate. What do you think? Thumb up 10 Thumb down 32

    Lowry December 22, 2013 4:54 pm Reply
    • No complaints just emphasises that the Scots should govern for Scotland.
      Independence is an inevitable process
      In some minds of course this is just another hand out from the generous folk in Westminster. How kind?

      We know it is a bribe toss in oil and gas revenues, crown estates etc and then ask again.

      Hot debate. What do you think? Thumb up 14 Thumb down 6

      H20 December 23, 2013 9:43 am Reply
  • I presume this will be same (already announced) plan that gives Scotland powers/control over collection of income tax BUT not over it’s spending as money would still go straight to HM Treasury … aka: a trap

    Hot debate. What do you think? Thumb up 28 Thumb down 5

    Iain December 22, 2013 5:16 pm Reply
  • I understand that the SNP’s policy is that even after independence we will still be part of the “Sterling Zone” that you value so much, newsie. So why shouldn’t we just go for the whole bit?

    I note that you seem to accept the SNP case that we get less back than we put in! A significant step forward on your part!

    Hot debate. What do you think? Thumb up 24 Thumb down 7

    Kassandra December 22, 2013 5:56 pm Reply
  • I’m sick of this appeasement of the SNP . It’s past time Unionists found the backbone to say NO .

    Hot debate. What do you think? Thumb up 10 Thumb down 34

    Islay for ever December 22, 2013 8:27 pm Reply
    • Appeasement of the SNP?
      Yes, only induced as a result in the rise of this party’s popularity leaving little choice for Westminster for fear of their treasury losing huge revenues not to mention the threat of nowhere to house their immoral and obscenely expensive weapons of mass destruction.
      Keep your eye open for even more appeasement IFO, the rise in the UKIP’s popularity prompted promises of an in/out referendum in 2017, just wait till the European elections and watch the Tories appease alright.
      Btw, the SNP have not asked for tax raising powers so what have the unionists/Westminster government to say NO to?
      The SNP with their mandate provided by the Scottish electorate to hold a referendum on Scottish independence wish just that, independence with all political levers any of the family of independent nations have the luxury of at their disposal.

      Hot debate. What do you think? Thumb up 20 Thumb down 7

      JnrTick December 22, 2013 11:00 pm Reply
    • Tell the truth Islay from C’town that you would close The Scots Parliament and be controlled in everything from the House of Lords and Commons

      In your mind they know best!

      Hot debate. What do you think? Thumb up 14 Thumb down 4

      H20 December 23, 2013 9:40 am Reply
    • I thought “no” was all they were able to say.

      Like or Dislike: Thumb up 5 Thumb down 2

      Kassandra December 23, 2013 4:30 pm Reply
  • I think the fact that this is income tax only should be a clue that this is just a gimmick. The balance of different taxes needs to be open to adjustment. Shifting the balance from VAT to income tax, for example, would produce a more progressive tax system. It would also allow measures like adjusting VAT on domestic energy so that there is a tax free allowance then a higher rate for overconsumption. The Scottish Government has the power to vary the incomes tax rate currently and hasn’t used it, because it’s too much of a blunt instrument on its own.

    Finally, does anyone seriously think this will make it any further than the drawing board? If Scotland votes no all talk of further devolution will disappear. If Scotland votes yes it’s irrelevant.

    Hot debate. What do you think? Thumb up 20 Thumb down 3

    Arethosemyfeet December 22, 2013 10:22 pm Reply
    • Agreed Arethosemyfeet

      These carrots they dangle should be treated with the utmost caution before following, 1979 being just one reason.

      Hot debate. What do you think? Thumb up 22 Thumb down 5

      JnrTick December 22, 2013 11:04 pm Reply
  • But no control of oil and gas revenues,excise duty,VAT,fuel duty, corporation tax, etc etc – the big ones. What a joke.

    Hot debate. What do you think? Thumb up 26 Thumb down 7

    Dave McEwan Hill December 23, 2013 12:19 am Reply
    • Oil and gas revenues: there won’t be much in the way of oil and gas revenues for a considerable time – with the promises made to the production companies to cut tax as a state contribution to sky high decommissioning costs; and with the lack of price competitiveness of North Sea heavy crudes against either cheaper sweet crudes from American shale or from cheaper heavy crudes from Canada’s Alberta oil sands. If you haven’t read our eight part research series on the oil industry and independence, then read it and PROVE where we’re wrong on this.
      Fuel duty: is the Scottish Government planning to levy fuel duty itself on the Highlands and Islands?
      VAT: is the Scottish Government planning high rates of VAT? Who does that hurt most?
      Corporation Tax: lowering that is simply the way to lose more tax revenue, forcing a higher income tax rise than will already have to be the case to pay for the additional welfare benefits promised [free universal child care @30 hours per week etc] never mind privatising the Royal Mail.
      If Scotland, as claimed, pays more to the UK Treasury than it gets back under the Barnet formula, the best bet looks like having total control pf income tax while staying in the UK and the Sterling zone we’re already in.

      Hot debate. What do you think? Thumb up 9 Thumb down 22

      newsroom December 23, 2013 1:05 am Reply
      • Let’s hope that the activity generating those ‘sky high decommissioning costs’ filters back into the Scottish economy, not just the English and other European economies.

        Like or Dislike: Thumb up 0 Thumb down 0

        Robert Wakeham December 29, 2013 12:28 pm Reply
  • Can anyone provide a link to any of thye “national media are reporting that the UK Government is prepared to devolve to Scotland total control of income tax and of housing benefit.”

    I would have thought that this would have been headline news….. but maybe that’s just me

    Like or Dislike: Thumb up 9 Thumb down 1

    Barmore 2 December 23, 2013 9:08 am Reply
    • The very misleading story is a few weeks old and was exposed as a con on social media …. newsie is as usual way behind the twitter/facebook curve

      Like or Dislike: Thumb up 4 Thumb down 1

      Iain December 23, 2013 4:51 pm Reply
  • Can anyone provide a link to any of the “national media are reporting that the UK Government is prepared to devolve to Scotland total control of income tax and of housing benefit.”

    I would have thought that this would have been headline news….. but maybe that’s just me

    Like or Dislike: Thumb up 8 Thumb down 2

    Barmore 2 December 23, 2013 9:09 am Reply
  • Aye, no headlines of this nature in any of the media that I can see.

    Is Newsroom on the crystal ball again?

    Like or Dislike: Thumb up 8 Thumb down 2

    Longshanks December 23, 2013 10:16 am Reply
    • More likely the crystal meth!

      (Sorry newsie, couldn’t resist that one).

      Like or Dislike: Thumb up 4 Thumb down 1

      Kassandra December 23, 2013 4:31 pm Reply
  • ‘Control the spending of those revenues’

    How exactly would that work if, say, the Scottish government doesn’t want any of its tax revenues to go towards replacing Trident?

    Not going to happen, is it?

    Like or Dislike: Thumb up 12 Thumb down 1

    Longshanks December 23, 2013 10:46 am Reply
  • I don’t think that it’s considered policy at all. It’s the sales time of year ..…. ” Amazing Reduction ” in one store being countered by ” Special Offer ” in the other. ” 50% Extra ” goes head-to-head with ” Buy One – Get One Free “.

    Like or Dislike: Thumb up 0 Thumb down 0

    Arthur Blue December 29, 2013 12:22 pm Reply

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