Written Question · S4W-20509 · Session 4
Further to the answer to question S4W-20327 by John Swinney on 1 April 2014, whether it will set out the figures underlying the assertion t…
The question
To ask the Scottish Government, further to the answer to question S4W-20327 by John Swinney on 1 April 2014, whether it will set out the figures underlying the assertion that “the vast majority of any higher tax revenues following any expansion in economic activity flow to Westminster” which was stated in the paper, Childcare and Labour Market Participation – Economic Analysis.
The answer
Under the current constitutional framework the Scottish Government and Scottish Parliament only have limited control over fiscal policy. The Scottish Parliament is only responsible for around 8 per cent of taxes raised in Scotland when including a geographical share of North Sea revenues. With the new tax powers of the Scotland Act 2012 this figure will only increase to around 16 per cent.
Under the Scotland Act, if revenues in Scotland were to increase by 1 per cent across the four main taxes and spending on key benefit to fall by 1 per cent, only 12 per cent of the total net gain in revenues would be retained by the Scottish Government. More detail is available on pages 6 and 7 of Childcare and Labour Market Participation – Economic Analysis paper.
Under the Scotland Act, if revenues in Scotland were to increase by 1 per cent across the four main taxes and spending on key benefit to fall by 1 per cent, only 12 per cent of the total net gain in revenues would be retained by the Scottish Government. More detail is available on pages 6 and 7 of Childcare and Labour Market Participation – Economic Analysis paper.
In the Official Report
No contribution in the Official Report cites S4W-20509 by reference.