Is the Scottish budget for 2019/20 disadvantaged by UK Government policy decisions on income tax? The Scottish Government argues that it is. The government’s case is reasonable – but potentially undermined by its own stated policy commitments.
The Smith Commission identified two ‘no detriment’ principles which it said should apply to Scotland’s new fiscal framework.
The first was that there should be ‘no detriment’ simply as the result of the initial transfer of a particular power.
The second – and the one relevant to this blog – was that neither government should face detriment as a result of a policy decision taken by the other. Specifically, ‘where either government makes a policy decision which effects the revenues or expenditure of the other, the decision-making government should reimburse the other where there is an additional cost, or receive a transfer if there is a saving’.Continue reading