Today’s IFS report has inevitably produced a superficial twitter debate about who pays/ spends more in the UK and whose ‘fiscal black hole’ is the biggest. It’s all about hard choices and the suggestion that the choices in Scotland would be the hardest or choiciest. The IFS helps the debate along by giving something to both sides: to the Yes side, it gives a table suggesting that Scotland contributes more than it spends. To the BT side, it provides some highly quotable figures that could be used to foresee doom. Indeed, I have already seen at least one tweet which distils the message into this: Scotland must raise its income tax by 9%.
Ironically, the part missing, so far, is about the politics of these future spending decisions. What we know, from experience of governments past, is that they are not always keen on telling the public that we need to raise taxes or reduce spending on an unprecedented scale. Or, they make that case in a particular way, to identify who should gain or lose most from reform plans. The big question now, if we assume that any devolved or independent Scotland will be part of a major financial reform, is: how will they deal with these deficits?
- Can a smaller government make social compromises in a more meaningful way, by consulting more widely, encouraging greater participation, and bringing together major business, social and labour groups?
- Would it become a smaller version of the UK, reducing public services rather than raising taxes (visibly), and reducing the welfare state/ social security?
- What effect might these differences have on public finances in the future?
If we are looking 50 years ahead, anything seems possible. Why focus so much on the end of North Sea Oil in 50 years when we could focus on the widespread use of jet packs?
See also David Comerford The White Paper vs the IFS
Expect a rash of people wondering how well we have done in predicting 50 years into the future. Here is my favourite mix of very sensible analysis and silly-looking predictions http://www.bbc.co.uk/archive/tomorrowsworld/8005.shtml