Tuesday, 16 August 2011

FFA's sake....

Devolution Max, It's the kite being flown by the SNP in the knowledge that Scotland doesn't want "independence". DevoMax would incorporate Full Fiscal Autonomy (FFA), the idea that all taxes raised in Scotland would be held and spent in Scotland, and that such charges as Corporation Tax could be varied  (i.e rduced) in Scotland so that businesses would move from England to Scotland to save money and increase profits.

Professor Arthur Midwinter has an interesting post here on the difficulties and general impracticality of FFA in a devolved Scotland. I have always suspected that FFA was independence in disguise. Prof Midwinter shows that it is inconsistent with devolution and with the UK's economic arrangements.

But it is also at odds with the SNP's other main policy of "independence in Europe" (itself a contradiction in terms, but that's another argument). Events in the Eurozone have resulted in pressure for much more fiscal integration, the exact opposite of the SNP's desire to be a tax haven economy, at fiscal war with its supposed partners in the UK and the EU. 

As for the Nats desire to be corporation tax pirates, here's what the the BBC reports is the Euro Leaders opinion of that...
In another initiative to increase tax revenues, the leaders advocated harmonising corporate tax rates across the single currency - something likely to be strongly opposed by the low-tax Republic of Ireland.
That'll be the economically crippled Ireland that Alex Salmond thinks should be the model for Scottish economic management. And that'll also be the death knell of any Nationalist plans for an "independent" Scotland to undercut corporation tax rates in the Eurozone.

P.S. I've been wasting my time... read this by Richard Murphy....

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