Iain McLean

Super ‘devo-max’ and moves
towards a federal Britain
Iain Mclean, Oxford University
[email protected]
For LSE Workshop 01.07.14
Outline of remarks
• What is devo-max?
– All the political parties, including SNP, say they want it
– So do the Scottish people
– But nobody has defined it
• Building on Calman
– Focus on taxing not spending
• Or indy-minus
– Why the White Paper scheme would actually be devomax
What is devo-max?
• Working definition: ‘more than Calman and
less than independence’
• On that definition, all parties including SNP
are for devo-max
– Can take Cons plan as an e.g. (the most radical
and realistic of the unionist parties)
• But devo-max is not on offer on 18.09.14
The Strathclyde Commission – main
• SP to fix all rates and bands of income tax
• Mini-OBR (‘Scottish Fiscal Commission’)
– Comment: Scotland already watched by OBR and
Stats Auth
• State pension to stay with UK
• Consider devolving other taxes
– Comment – why not assign VAT, excises?
Why the SG offer is really devo-max
not indy
• ‘Nothing will change’ again and again
– E.g., BBC, monarchy
– Accepts will have to use UK tax and welfare
regimes until new ones ready
• If rUK were to make shared currency offer it
would come with v tight conditions (cf Carney,
• They wd include control on tax-and-spend
Building on Calman
• It’s fashionable to say that Calman (≈ Scotland
Act 2012) is dead on arrival.
• All unionist parties want to go further
• But almost nobody understands what Calman
actually proposes
– Matching marginal spend with marginal tax
– 10p in £ of income tax is enough to achieve this
– Devolving the whole of income tax doesn’t add a
How to max out devolution
• Go tax by tax, not spending area by spending
• Focus on the big ones:
– Corporation Tax
– National Insurance.
• By elimination, only NI offers much scope….
Do we want social union or postcode
• Most survey evidence says the people want
social union
– Therefore want benefit rates and terms to be
constant UK-wide
– But devolving NICs puts this in question
• Would the people really want devo-max if
they faced a consistency contraint?
Devo-max and fiscal federalism
• Would it be just for Scotland?
• Wales would prefer needs assessment
• NI doesn’t know what it wants, except control
of Corp Tax (dreadful idea – ask Amazon or
• North of England with Wales
• London has the only REAL interest in f.f.
• Devo-max is not fiscal federalism
• But Δtransparency on inter-regional tax-andspend increases pressure for federalism
For further reading
• I McLean et al, Scotland’s Choices 2nd edn
• I. McLean et al ed., Enlightening the
Constitutional Debate
• Report of the Strathclyde Commission

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