Scottish Government
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Fiscal Autonomy

An independent Scotland with full fiscal autonomy would be better able to achieve its full economic potential, Finance Secretary John Swinney said yesterday as the Scottish Government published Fiscal Autonomy in Scotland: the case for change and options for reform as part of the ongoing National Conversation on Scotland's future.

The publication contains a detailed assessment of all options for reform of Scotland's financial framework and is designed to help inform and spark debate on the best way forward.

It concludes that full fiscal autonomy through independence would both help Scotland deal with short term issues like the global downturn and put the country on the best path for a more successful future - unlike other options short of independence.

Mr Swinney said:

"It is clear that the Scottish economy faces its greatest challenge in decades. This Government is doing all it can to put in place a comprehensive recovery programme to help businesses and households through the difficulties they face.

"However, the impact of the economic crisis has starkly exposed the limits of Scotland's current fiscal framework.

"This publication illustrates that an independent Scotland with full control of all financial levers would both be able to do more in the short term, and put our country on the path to long term success.

"The right response to the present situation is to deliver a substantial, immediate and well-targeted fiscal stimulus, supporting growth, jobs and confidence throughout the economy. But, within the current framework, Scotland's Government is tied to a fixed budget determined by Westminster.

"The Scottish Government has no scope to borrow responsibly or to boost spending, and it has very limited scope to cut taxes to spur growth.

"The current framework also significantly constrains the ability of the Scottish Government to boost Scotland's long-term competitiveness through, for example, introducing a simpler and more competitive tax regime.

"Under all the criteria this publication uses to judge the options -Independence and full fiscal autonomy emerges as the best path for Scotland.

"This is the case we are making through our National Conversation on Scotland's future. I am convinced this publication will provide the kind of detailed evidence we need to ensure that debate is well informed and sets Scotland on a path for a more successful future."

The publication takes five potential options for reform:

  • Independence
  • devolution max
  • enhanced devolution
  • assigned revenues
  • current framework

It judges them all against three key criteria for delivering increased sustainable economic growth:

  • enhanced efficiency
  • greater accountability and transparency
  • sustainability

Related Information

http://www.scotland.gov.uk/Publications/2009/02/23092643/0

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