Independence: Scotland Act 2012
A conspiracy of silence?
Professor Jim Gallagher, Research Fellow in Politics, Nuffield College, University of Oxford
The thing most ignored in the
present Scottish independence
debate is the thing which is most
likely to happen after it. There
is something of a conspiracy
of silence about the new tax
powers which will come to the
Scottish Parliament as a result
of the Scotland Act 2012. In fact,
they represent
a substantial
addition to
the powers of
the Scottish
Parliament, all the
more remarkable
in a state with
such a tradition of
fiscal centralisation
as the United
Kingdom.
“The legislation will
be put into effect in
2016, so that the
Scottish Parliament
elected then (assuming
Scotland has decided
against independence)
will have substantial
income tax powers.”
Professor
Gallagher was
Director General
for Devolution
in the UK
Government’s
Ministry of
Justice (200710), and was
Secretary of
the Calman
Commission.
He recently
joined the
‘Better Together’
Campaign.
When the Scottish
Parliament was
created in 1999,
it built upon the
foundation of
administrative
devolution which
had grown up
over the previous
century or more.
Most of the
domestic functions
of government
in Scotland were
decentralised, to
a territorial Secretary of State.
This in its turn was built on the
preservation of the separate
Scottish legal system, educational
system, and church since the Act of
Union in 1707.
The Scottish Office that
administered the services had
an immensely wide range of
responsibilities: health, education,
justice, transport, economic
development, agriculture, and many
others. Indeed, virtually the same
range of responsibilities as the
Scottish Parliament has today. But
it was, in the jargon, a spending
department of government: it
disbursed monies or spent them
directly, and was funded by UK
taxation collected by the Treasury.
The only exceptions were local
taxes such as council tax and nondomestic rates.
In consequence, the Parliament
created in 1999 was lopsided. It
had immensely wide spending
responsibilities – as wide as those
in any federal state – but only
vestigial taxing responsibilities. The
UK is internationally unusual in that
virtually all taxes are collected and
gathered centrally by the Treasury.
Most other countries, and certainly
federal countries, have some
decentralised taxation.
parties, and despite opposing it
until the last moment, the SNP
majority administration elected in
2011 eventually consented, and
the scheme was enacted as the
Scotland Act 2012. The legislation
will be put into effect in 2016,
so that the Scottish Parliament
elected then (assuming Scotland
has decided against independence)
will have substantial income tax
powers.
Against this background and in
response to the election of an SNP
minority government in 2007, the
UK Labour Government, supported
by a majority of members of the
Scottish Parliament, decided to
set up the Calman Commission,
to review the powers of the
Parliament and in particular its
fiscal accountabili