Scotland's changing fiscal framework through the prism of Understanding Society

Presenter: Professor David Bell, University of Stirling

Author: Professor David Bell

This presentation will use Understanding Society to examine the radical changes in Scotland’s taxation and welfare system that are planned for the near future.

These have been precipitated firstly by the independence referendum and most recently by the election of 56 SNP MPs to the Westminster Parliament. The tax and welfare changes involve Scotland taking control of a large proportion of personal taxation including all of income tax and half of VAT revenues. Scotland will also gain control of a significant share of welfare benefits. Understanding Society will be used firstly to contrast key characteristics of the Scottish and rest of UK populations.

Then the implications of the tax and welfare changes will be explored through the medium of microsimulation, again using Understanding Society. The analysis will show that increased tax powers could result in a better fiscal outcome for Scotland, but that there are risks associated with devolving control over tax and welfare budgets to the Scottish Parliament. Finally, the presentation will analyse the implications of extending greater control over tax and welfare to other parts of the United Kingdom.