North of England

IPPR North have published a report, Borderland, on the implications of constitutional change for the North of England. While they accept that these are matters for the people of Scotland, they identify the threats and opportunities for their region.

In the first Red Paper (April 2012) we made the case for regional government in England and in this paper the authors say:

“We also briefly explore whether political and constitutional change in Scotland provides an opportunity for the north of England itself to argue for greater autonomy from the Westminster government. Following the recent failure of directly elected mayors – almost a decade on from the failure of elected regional government – the north of England will need to champion a feasible, deliverable form of decentralised government if it is to seize the opportunity presented by developments in Scotland.”

From a Scottish perspective there is a very good chapter on the fiscal implications of constitutional change with a particular focus on tax competition.

The report says the Scots economy would have to grow by 3.9% to offset the cost of a 20% cut in corporation tax, as pledged by the SNP. Cutting the main business tax to 12.5%, on the Celtic Tiger model would require a 7.8% rise in gross domestic product to maintain public spending. The report says such growth would be a “tall order” and Scotland’s ability to sharply cut taxes would be constrained.

I reached a very similar conclusion in my article on the fiscal implications of constitutional change (Red Paper Sept 2012). However, the authors also argue that the small fiscal changes, such as capital allowances or air passenger duty, could prove to be more significant for them. 

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