Holyrood has the key economic powers say experts

The key economic policy powers have now been devolved to the Scottish Parliament, according to a survey of policy experts conducted by Scotland in Union.

The survey asked policy experts from across Europe to rank policy areas in terms of their impact on economic performance.

The results show that the most important political powers impacting on economic performance have now either been devolved wholly, are partially devolved, or would not be available even in the event of Scottish independence.

Of the top 15 most important economic powers, seven are now devolved and largely controlled by the Scottish Parliament: the overall level of taxation, commercial and property law, higher education and skills, schools education, planning and development policy, public sector reform and transport policy.

Two more are shared between the UK and Scottish Parliaments: setting individual tax rates and bands, and public borrowing.

Others, including business regulation, monetary policy and trade policy are not devolved, but would remain under EU or UK jurisdiction even in the event of independence, under current nationalist plans.

Of the top 15 most important economic powers, only labour market policy, some tax powers and some commercial regulation is currently reserved to the UK Parliament but would be passed to Holyrood if Scotland were independent.

The full list is as follows:

Policy Area (ranked by aggregated score from survey)

Constitutional status

Tax - overall level

Devolved[1]

Tax - individual rates and bands

UK / Devolved

Business regulation

EU competence

Commercial and property law

Mostly devolved

Higher education and skills

Devolved

Labour market rules

UK - reserved

Education - schools

Devolved

Monetary Policy

would be outsourced[2]

External trade  / tariffs policy

EU competence

Competition policy

UK / EU shared

Planning and development rules for industry and housing

Devolved

Financial regulation

would be outsourced[3]

Public sector reform

Devolved

Transport policy and infrastructure

Devolved

Public borrowing

UK / Devolved[4]

Welfare policy / social insurance

UK - reserved

Defence / foreign policy

UK - reserved

Energy  & utilities infrastructure

Devolved

Health policy

Devolved

Energy & utilities markets / pricing

UK - reserved[5]

Criminal justice

Devolved

Pensions policy

UK - reserved

Enterprise policy / regional development

Devolved

Social Housing

Devolved

Agriculture and rural affairs

EU / devolved

Social care

Devolved

 

The clear message is that, with the new powers being devolved to Holyrood, the Scottish Parliament and government now holds most of the powers it needs to promote economic growth, jobs and prosperity in Scotland. It is no longer plausible to blame Scotland’s poor economic record on the UK government.

Alastair Cameron, director of Scotland in Union, said: “The performance of the Scottish economy is key to creating jobs and opportunities for people and we know many in the business community are desperate to see a full debate about how we can make things better.

 

 “This research shows that with the new powers coming to Holyrood, the next Scottish Government will have real responsibility over our country’s economy because they will be in control of the key policy levers, according to the experts.

 

“We hope this will help move the debate beyond who is responsible for economic growth and on to what we do at Holyrood to achieve it, working in partnership with the UK Government.

 

 

“Increasingly, Scottish politics is moving into a different phase - from where powers should lie to getting on with the real work of using them to make Scotland a better place. Rather than looking over our shoulder to Westminster or Brussels for the answers or blame, the people of Scotland should be expecting our next First Minister to map a course for a flourishing and thriving economy that benefits us all.”

 

 

Survey Note: A range of institutes, think tanks and specialist publications in the UK and elsewhere in Europe responded to the survey. Respondents were not asked for their views on devolution or Scottish politics, nor were required to have specialised knowledge of Scotland. Instead they were asked the questions “Which policy areas are most important for the economy?‏” based on their general expertise on policy making and economics in economically developed democracies. The following institutions responded to the survey: Adam Smith Institute, Austrian Economic Centre, Bertelsmann Stiftung, Centre for the Advancement of Free Enterprise, Centre for Policy Studies, Centre for Innovation and Economic Growth, Contrepoint, European Policy Centre, Institute of Directors, Institute of Economic Affairs, Konrad Adenauer Stiftung, Libera, Moneyweek, MR Stefanik Institute, Open Europe, Public Partners, Quid Novi Foundation, ScottBuzz, Taxpayers’ Alliance.



[1] The Scottish Parliament controls enough taxes to be able to set the overall level of taxation in Scotland, and also can, or will shortly be able to, adjust rates and bands in several taxes including income tax, council tax and business rates.

[2] Monetary policy would not be the responsibility even of an independent Scotland. Current nationalist plans involved outsourcing control of the currency to the rest of the UK. An independent Scotland in the EU would be obliged to join the euro at some stage in the future.

[3] Most financial regulation would be undertaken by the monetary authorities (see footnote two).

[4] The overall borrowing framework is reserved to the UK, but the Scottish Parliament has considerable discretion within that, through its own borrowing powers, those of local authorities, as well as private /public partnerships.

[5] Energy market policy would need to be agreed with the UK in the event of independence if Scotland wished to benefit from the UK energy market

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