Daily Mail, 21.11.08
Scotland should have its own Chancellor and the power to raise all the money it spends, an influential think-tank said yesterday.
Reform Scotland called for the creation of an Edinburgh-based Treasury to set tax north of the Border so the Scottish parliament can be more financially accountable.
As a first step, the Barnett Formula – which sets the block grant from Westminster to finance the Scottish parliament – should be scrapped, said the Fiscal Powers report.
But the proposals stop short of full independence. Economist Graeme Blackett, the report’s co-author, said: “We recommend that a Scottish Exchequer – and that would require a Scottish Chancellor – is established as part of a new financial settlement. The greater fiscal powers for the Scottish parliament would make this necessary and a Scottish Exchequer would be responsible for collecting revenue from all taxes levied north of the Border on behalf of the UK and Scottish governments.”
The report outlined how certain taxes could be retained by Westminster to meet the approximate £20billon it currently spends north of the Border.
These include all National Insurance contributions, 40 per cent of income tax revenues from Scotland, 40 per cent of Scotland’s geographical share of North Sea oil revenues, together with TV licence and passport fees and the National Lottery levy.
VAT would be set at UK level, with 40 per cent of the revenue from Scotland going to London and the remainder assigned to the Scottish parliament.
The Scottish Executive would be left to set all other taxes to fund the equivalent of Holyrood’s existing £30billion budget.
At present, Holyrood controls taxes which raise only 13 per cent of the money it spends, the Right-of-Centre think tank claimed.