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Reform Scotland says Holyrood tax powers would be a real step forward

Reform Scotland, the leading independent think tank, today [thurs]welcomed reports that the Calman Commission is to recommend greater tax-raising powers for the Scottish Parliament. Although the reported recommendation to give Holyrood control over half of the income tax revenue raised in Scotland does not go far enough, Reform Scotland said it represented ‘a real step forward’. The think tank believes the Scottish Parliament should be responsible for all the money it spends.

This was clearly set out in Reform Scotland’s research paper, Fiscal Powers, published last November. Reform Scotland chairman Ben Thomson said today: ‘On the basis that these reports accurately reflect what the Calman Commission will recommend on Monday, this certainly represents progress.

‘Our view is that the Scottish Parliament needs to have much greater power to raise its own revenue in order to enhance its financial autonomy and accountability. This is vital to provide a real incentive to introduce policies which encourage economic growth and provide real value for money while giving the Scottish Parliament the fiscal tools which they could use to increase economic growth.

‘While we will have to wait for the publication of the report before coming to any final conclusions, the Press report today suggests that the Calman Commission will recommend giving Holyrood control over half of the income tax revenue raised in Scotland.

‘Crucially, the Scottish Government would have the ability to vary the level of its share of income tax and so set levels that are appropriate to Scotland. This is in line with our own recommendations in our report ‘Fiscal Powers’ in which we called for Scotland to be given control over 60 per cent of income tax revenue in Scotland.’

Mr Thomson added: ‘The proposals do not go as far as we recommended in our report, ‘Fiscal Powers’, in which we called for the Scottish Government and Parliament to be given control over a range of taxes so that they were responsible for raising all the money they spend in Scotland. However, this would represent a real step forward.
‘This move would certainly enhance the financial accountability of the Scottish Parliament and provide a greater incentive to introduce policies which encouraged growth and provided real value for money while giving the Scottish Government fiscal tools which they could use to increase economic growth.

‘In this respect, it is far better than a system of assigned revenues which would give the Scottish Government no ability to vary the rates of any taxes and so could not set them at levels appropriate to Scotland thereby creating the right
environment for economic growth.