An interesting little essay from BBC Scotland's Business and Economy Editor, Douglas Fraser:
Holyrood tax: the devil's in the data
Quote:
To plug looming gaps, the Scottish government has borrowing powers, but these are constrained within the terms of the new devolution arrangements. Even if they were not, they would be constrained by the operations of the bond markets - as the SNP's Sustainable Growth Commission sought to explain to gung-ho enthusiasts for winning independence and going on a borrowing spree.
The current borrowing powers are being deployed, for capital projects. They can't cover the scale of the gap in spending that results from these block grant adjustments, or consolidations.
So tough decisions lie ahead - tax increases, spending cuts, spending postponements, or a firmer push on public sector efficiency through reform.
Is this a special problem for Scotland? It's clearly new, and within the UK's financial set-up, it's got unusual dimensions. But it's more about Scotland joining the world in which governments have to make choices about taxation and to live with the consequences.
At 20 years of age, the Scottish Parliament may not have reached the independence some wish for it, but it is reaching the age of far greater maturity.
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More of his recent reports:
LINK.
He's actually quite good when it comes to these sorts of analyses and he makes them easy to understand from a laymans perspective.
The biggest impression I've had is that when it comes to determining how much revenue each region of the UK
actually generates, the Treasury seems to rely on an awful lot of informed guesswork rather than solid data......
Mike.