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Financing regional government in the UK: some issues


  • Laura Blow

    () (Institute for Fiscal Studies)

  • John Hall
  • Stephen Smith

    () (Institute for Fiscal Studies and University College London)


Over the last decade there has been a resurgence of interest in the possibility of some measure of devolution to regional governments for at least parts of the United Kingdom. In Scotland, the debate has been particularly advanced, and three of the four main political parties in Scotland are committed to substantial devolution. As in the unsuccessful devolution proposals of 1979, the proposals for Scotland are echoed by similar, though less unequivocal, devolution proposals for Wales. Devolution in England has attracted less enthusiasm, and much less vigorous debate, except in a few regions, notably the North East. Regional government raises a number of finance questions, which are the subject of this paper. The issue of finance has been most prominent in the debate over devolution in Scotland, with intense interest focusing on, at one extreme, the fiscal position of Scotland if it were wholly dependent on Scottish tax revenues to finance Scottish expenditures, and, at the other extreme, on the adequacy and/or effects of giving a Scottish Parliament power to vary income tax rates within a three percentage point band. There has been much less discussion of other finance issues.

Suggested Citation

  • Laura Blow & John Hall & Stephen Smith, 1996. "Financing regional government in the UK: some issues," Fiscal Studies, Institute for Fiscal Studies, vol. 17(4), pages 99-120, November.
  • Handle: RePEc:ifs:fistud:v:17:y:1996:i:4:p:99-120

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    References listed on IDEAS

    1. Robert Bennett, 1986. "The impact of non-domestic rates on profitability and investment," Fiscal Studies, Institute for Fiscal Studies, vol. 7(1), pages 34-50, February.
    2. Helm, Dieter & Smith, Stephen, 1987. "The Assessment: Decentralisation and the Economics of Local Government," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 1-1, Summer.
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    Cited by:

    1. Patrizio Lecca & Peter McGregor & Kim Swales & Ya Ping Yin, 2010. "Inverted Haavelmo Effects in a General Equilibrium Analysis of the Impact of Implementing the Scottish Variable Rate of Income Tax," Working Papers 1013, University of Strathclyde Business School, Department of Economics.
    2. Julia Darby & Anton Muscatelli & Graeme Roy, 2002. "Fiscal federalism and Fiscal Autonomy: Lessons for the UK from other Industrialised Countries," Working Papers 2002_12, Business School - Economics, University of Glasgow.
    3. David Heald & John Short, 2002. "The Regional Dimension of Public Expenditure in England," Regional Studies, Taylor & Francis Journals, vol. 36(7), pages 743-755.
    4. James Gallagher & Daniel Hinze, "undated". "Financing Options for Devolved Government in the UK," Working Papers 2005_24, Business School - Economics, University of Glasgow.

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