Fiscal Policy

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Funding deal can end threat of the “Barnett Squeeze”

The UK Government and the Welsh Government are currently discussing the future of a ‘funding floor’ for Wales, designed to protect the relative level of government spending per head in Wales. A new report by researchers from Cardiff University’s Wales Governance Centre and the Institute for Fiscal Studies assesses three options for the floor, and considers how such a floor might interact with the Welsh block grant after taxes are devolved to Wales from April 2018.

A landmark new report by the Wales Governance Centre (WGC) at the University of Cardiff, Government Expenditure and Revenue Wales 2016, gives the clearest picture yet of the state of welsh public finances. Guto Ifan and Ed Poole at the WGC, explain that the report shows that public sector expenditure for Wales exceeded public sector revenues by £14.7 billion in 2014-15.
 
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The suggestion that an increase in the additional rate would lead to a mass migration of wealthy Scots has been widely - and rightly - criticised, says David Eiser. However, the likelihood of widespread tax avoidance by higher earners is a very real one. 
 
The SNP has been taking a lot of criticism for its failure to support a rise in the Additional Rate to 50p. 
 
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Does Nicola Sturgeon’s refusal to increase the Additional Rate of Income Tax to 50p unless it is increased in the rest of the UK undermine the case for tax devolution? David Eiser argues that there were always going to be constraints on the exercise of devolved powers and incumbent governments have to decide how these relate to the wider policy context.
 
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Scotland's fiscal framework: Assessing the agreement

The Smith Commission Agreement, published on 27 November 2014, set out proposals for substantial fiscal devolution to the Scottish Parliament. The Scotland Bill – due to receive Royal Assent shortly – will enshrine these powers in law.

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Latest blogs

  • 18th May 2018

    Different political actors have responded to the decision by the Scottish Parliament to withhold its consent for the UK Government’s showpiece EU (Withdrawal) Bill in very different ways. Prof Nicola McEwen sifts the facts from the hyperbole and explains where we are and where we go from here.

  • 15th May 2018

    On 8 May the UK’s House of Lords passed an amendment to require the House of Commons to vote on remaining in the European Economic Area (EEA), the possibility of Britain adopting the so-called ‘Norway model’ is back on the agenda of British politics. Here the authors of Squaring the Circle on Brexit: Could the Norway Model Work?, John Erik Fossum and Hans Petter Graver, give some background to Norway’s relationship with the European Union and reveal the truth behind some common myths about the Norway model.

  • 4th May 2018

    The Sewel Convention has historically worked well, says Michael Keating, but Brexit will put it to the test.

  • 3rd May 2018

    Amendments to controversial Clause 11 of the European Union (Withdrawal) Bill were agreed in the House of Lords yesterday evening, following a deal between the UK and Welsh governments last week. Jack Sheldon and Mike Kenny explain the significance of this agreement for the UK as a whole and outline a number of unresolved issues it raises.

  • 2nd May 2018

    The hesitant progress of Brexit legislation through Westminster has provided parliament with an opportunity to show its teeth and, says Tobias Lock, it demonstrates that the legislature has bite as well as bark.

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