Scotland should have fiscal independence
Leading economists say that the
Scottish parliament should be
given complete control over taxation
and spending in Scotland.
Making the devolved administration
fully responsible for raising
its own funds would, they
say, force the Scottish Executive
to be more accountable for its
spending decisions.
Welcoming the proposal, the
leader of the Scottish National
Party (SNP), John Swinney, said,
"I want to see that the wealth of
Scotland works for the people of
Scotland." But other parties
have been more sceptical.
Sean Connery opens the Scottish Parliment in September 1999 (RUI VIEIRA/AP)
At present, the Scots pay all
their taxes to the Treasury,
which in turn hands back
£19.8bn to pay for health and
the other devolved powers, such
as education. The Scottish parliament
can top up this amount
by increasing income tax, or it
can lower taxes and hand money
back to the Treasury. The
case for fiscal autonomy argues
that Scotland should collect all
its own taxes, and only after
spending an "agreed sum" on
its own needs, would it give a
share to Westminster for joint
costs such as defence.
Central to the argument is
the difference of opinion
between Labour and the SNP
over Scotland's financial position.
The SNP admonishes the
current Scottish administration
for subsidising Westminster by
£5bn a year through oil revenue.
But Labour refutes this,
saying that Scotland enjoys an
extra £3bn delivered through
the present system of the block
grant. Furthermore, it says that
the SNP's calculations depend
on retaining "buoyant" levels of
oil revenue.
But a move towards fiscal
independence may appease
many English constituency
Labour MPs who think that the
Scots are getting an unfair
advantage, paid for by the
British taxpayer. They resent
the Scottish people getting an
average 23% extra spent on
health per head of population
compared with England,
despite what some see as
greater health needs and poverty
in the English regions. They
argue that the Barnett
formula, devised in the
1970s to calculate the
level of the block
grant that delivers
this extra funding
to Scotland, is outdated
and should
be revised to
suit the changing
climate
that devolution
has
brought.
Their sentiments
have
been exacerbated
by
pledges
from Henry
McLeish,
Scotland's first
minister, to pay
for personal care
of the elderly-a
privilege not
afforded in England.
From the
financing of medical
education to
spending on health,
and now personal care,
stark differences are
emerging that could make
the experience of a medical
career in Scotland
quite different to that
south of the border.
Amina Hussain Inverness
studentBMJ 2001;09:217-260 July ISSN 0966-6494
