The term “another week” does not seem appropriate as the title to this blog.

I do not remember all that much about the 1979 referendum and I was living in Chicago during the 1997 referendum.  Odd to think how much I do still remember about Argentina 78.  This week’s announcement ensures that 2014 will now be added to Scotland’s constitutional dateline.  A yes vote in the Autumn of 2014 leads to an independent Scotland by May 2016.  That is why this is not just another week.

What does a yes vote mean?  A yes vote means a Scottish Exchequer.  I have written about a Scottish Exchequer regularly over the last few years including in these blogs and the fiscal powers papers I co-authored with Reform Scotland.  Creating a Scottish Exchequer is not going to happen overnight.  We do though need to start somewhere.  Let’s start with the question: do we need separate HMRC and HM Treasury type bodes?  No.

We also need to look at what other institutions an independent or even a fiscally autonomous Scotland might need.  For example a one stop shop for all Scottish Government legal, registration and tax services.

We also now have to thinking about practicalities.  Would I copy en masse the UK tax legislation as exists in 2014 and declare that no changes will be made for two years?  Yes. This will ensure a degree of certainty for the general public and the business community.  Another advantage is that it would take some pressure off the new Scottish Exchequer.

I am sure I will come back to these and many other issues in the coming weeks and months.

I read with interest that Jeremy Paxman compared Scotland with Zimbabwe in an interview with the First Minister earlier this week.  I remember a similar point being put when I was giving evidence to the Calman Commission.  The transcript for this, page 478, can be found here.

Now to a question I was asked earlier this week.   How would I explain “devo max”.  Two areas need to be looked at.   Government spending and control over taxation.  The percentage that the Scottish Parliament has over each of these areas gives a good idea of how much autonomy it has.   Presently the Scottish Parliament has control over 60% of all government spending but only 7% of taxation.   The Scotland Bill increases taxation control to around 30%.   The latest Reform Scotland proposal, “devolution plus”, moves this closer to 70% for both government spending and control over taxation.  Fiscal autonomy or “devo max” would be around 90% for both government spending and control over taxation.  Fiscal autonomy does not reach 100% because control of VAT cannot be devolved with European Union states and foreign affairs, defence and some economic matters would still be controlled by Westminster.

The Liberal Democrats concerted campaign to dominate the news coverage in the run up to the March UK Budget  continued apace this week.   This week it was the UK Business Secretary, Vince Cable, calling for a mansion tax to be introduced on properties worth over £2 million.  It is estimated that a mansion tax could raise as much as £1.7 billion a year.  Nick Clegg, it is reported, also wants to speed up plans plans to increase the level at which income tax becomes payable, from its current £7,475 to £10,000.   This is presently scheduled for 2015.

Now to Europe.  I have previously blogged on how hard Ireland has had to fight to retain its low rate of corporation tax as a result of its bailout.  What is less well known is how the bailout might impact the Irish legal system.  Excellent article on this in the Law Society Gazette which can be found here.

Now to England and Eric Pickles, UK Communities Secretary, saying that councillors have a “moral duty” to sign up to the UK Government’s council tax freeze.  A moral duty to sign up to government policy.  A tax policy no less.  Interesting tactic.  Not surprisingly this has not gone down well with many English councillors.

More on business rates this week and the debate, for debate read spat, between the STUC and the FSB on the “Small Business Bonus Scheme”.  More on this can be found here.   Good to see that neither side used “morality” in their arguments.

Scottish Water has announced that its charges are to be frozen for the fourth year in a row.  The move means the average annual household charge from April in Scotland will remain at £324.  This is the same level it was in 2009-10.

Some more good news.   The UK Government has agreed to an income tax exemption for non UK competitors at the 2014 Glasgow Commonwealth Games.   This is something I have blogged about before and takes away another point of potential conflict between the Scottish and UK Governments.   Now that agreement has been reached on this and the fossil fuel levy fund I wonder which other niggly issue could be dealt with next?  How about adding aggregates duty, air passenger duty, corporation tax and alcohol duty to the Scotland Bill?  Likely to happen?  No.

One last point.  If you have still not dealt with your tax return please do so as soon as possible even though HMRC have effectively put back the deadline for two days due to possible strike action.  HMRC’s new penalty regime is not something you want to have to deal with.

Have a good weekend.