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This paper poses the question: if the UK were to introduce a net wealth tax, to what extent would there be a case for that tax, or elements of that tax, to be devolved to the UK's three devolved legislatures? The notion of a tax being devolved in this sense can include anything on the spectrum from full devolution, through some form of tax sharing arrangement where devolved government can vary specific aspects of the tax within their territories, to revenue assignment. To analyse this question, the paper draws on economic theory, the practical experience of recent tax devolution in the UK, and lessons from other countries that operate a wealth tax at devolved level.

This paper examines the background to calls for further fiscal decentralisation in Scotland in the light of theories of fiscal federalism. In particular, it examines whether spatial differences in preferences, which are central to 'first generation' theories of fiscal federalism can be argued to play a central role in the case for granting Scotland further tax and spending powers. 'Second generation' theories of fiscal federalism draw attention to the political economy of allocating tax powers to different levels of government. Some of the authors in this strand of theory argue that the case for allocating tax powers to subnational governments can be made in terms of 'accountability' – the notion that local politicians can be better held to account for the outcomes of policy actions. Our empirical analysis suggests that there is no clear difference in preferences between Scotland and the rest of the UK along a number of key political dimensions. However, the Scottish parliament enjoys substantially higher levels of trust among the Scottish electorate than does the UK parliament.

AbstractThe part of the UK fiscal framework which determines how UK government funding is allocated across the four home nations has undergone profound change since 2012, given tax and social security devolution. The UK government's post-Brexit plans for regional development funding, state aid, regulation and trade negotiations have led to significant disagreements about the nature of the devolved fiscal and constitutional settlement. And the COVID-19 pandemic provided a major shock to a fiscal system with limited flexibility for the Scottish, Welsh and Northern Irish devolved governments. This paper reviews the changes and challenges faced during these reforms and policy shocks. We find that: tensions about reforms to funding arrangements reflect the inconsistency of principles guiding the reforms; that the UK government's post-Brexit plans do reduce the policy autonomy of the devolved governments, but reflect powers central governments often have in even highly decentralised countries; and that temporary changes to rules and the nature of the COVID-19 pandemic prevented a subnational fiscal crisis, but that more systematic change may make the system more robust to future shocks. This suggests that a review of the principles underpinning the UK's subnational fiscal and economic policies would be highly worthwhile.

Abstract
This paper examines the extent to which the UK's three devolved governments have sought and achieved influence on the UK Government's evolving post-Brexit international trade policy, distinguishing their influence at key stages of the trade policy cycle (mandate, negotiations and implementation). Despite carrying the legal responsibility to implement those aspects of trade deals that fall within areas of devolved competence, the devolved governments' attempts to secure meaningful influence on the UK's trade agreements have largely been frustrated. This reflects a lack of trust between the devolved and UK governments, weaknesses in the framework for and operation of intergovernmental relations, and a strong desire of the UK government to retain control centrally wherever possible. The resulting tensions have exacerbated devolved governments' concerns over the authority of the devolved institutions post-Brexit.

This paper examines the extent to which the UK's three devolved governments have sought and achieved influence on the UK Government's evolving post-Brexit international trade policy, distinguishing their influence at key stages of the trade policy cycle (mandate, negotiations and implementation). Despite carrying the legal responsibility to implement those aspects of trade deals that fall within areas of devolved competence, the devolved governments' attempts to secure meaningful influence on the UK's trade agreements have largely been frustrated. This reflects a lack of trust between the devolved and UK governments, weaknesses in the framework for and operation of intergovernmental relations, and a strong desire of the UK government to retain control centrally wherever possible. The resulting tensions exacerbate more devolved governments' concerns over the authority of the devolved institutions following Brexit.

The COVID-19 pandemic has been a significant challenge for all tiers of government across the world. In the UK, the devolved governments of Northern Ireland, Scotland and Wales are responsible for most of the public services significantly impacted by the pandemic, and have designed and implemented large parts of the public health response to it. They have also been responsible for designing and administering grants and property tax reliefs for businesses. They have had to discharge these responsibilities and manage their budgets in the context of fiscal frameworks agreed before the pandemic – although the UK government made modest, but important, temporary changes to funding arrangements in 2020–21. These changes, in combination with the enormous increases in funding made available by the UK government, and the fairly symmetric impact of the pandemic across the four nations of the UK, meant the risk of a major funding crisis for the devolved governments was averted. But this 'success' does not mean there is not room for improvement to the existing fiscal frameworks in order to make them more robust to future shocks, or that the same ad hoc changes would necessarily be appropriate if another extreme adverse shock occurred. This report considers a range of options to reform the existing fiscal frameworks, with two main objectives in mind: first, to make them more robust to future crises, including a potential reintensification of the COVID-19 pandemic during Winter 2021–22; and second, to help the devolved governments support economic and social recovery from the pandemic.

This paper examines the extent to which the UK's three devolved governments have sought and achieved influence on the UK Government's evolving post-Brexit international trade policy, distinguishing their influence at key stages of the trade policy cycle (mandate, negotiations and implementation). Despite carrying the legal responsibility to implement those aspects of trade deals that fall within areas of devolved competence, the devolved governments' attempts to secure meaningful influence on the UK's trade agreements have largely been frustrated. This reflects a lack of trust between the devolved and UK governments, weaknesses in the framework for and operation of intergovernmental relations, and a strong desire of the UK government to retain control centrally wherever possible. The resulting tensions have exacerbated devolved governments' concerns over the authority of the devolved institutions post-Brexit.

Economic issues will be key determinants of the outcome of the Scottish referendum on independence. Pensions are a key element of the economic case for or against independence. The costs of funding pensions in an independent Scotland would be influenced by mortality risks, the costs of borrowing and the segmentation of costs and risks (i.e. pricing to Scotland's experience rather than pooled across UK experience). We compare the overall costs of providing pensions in an independent Scotland against the resources that are available to cover these costs. Scotland has worse mortality experience than the UK as a whole, and Scottish government debt is likely to attract a liquidity premium relative to UK government debt. An independent Scottish government would have to create a bond market for public debt. The liquidity premium would make pensions cheaper to buy, but taxpayers or the consumers of public services would have to pay the cost.

This paper applies Scotland's health allocation formula to Primary Care Trusts (PCTs) in England, Health Boards in Wales, and Health and Social Care Trusts in Northern Ireland in order to assess the relative health care expenditure needs of the countries. According to the Scottish formula, England's per capita health care expenditure need is around 10% lower than Scotland's, while Wales' per capita expenditure need is around 2% lower than Scotland's, and Northern Ireland's is around 7% lower than Scotland's. Scotland's relative expenditure need over England is largely a function of higher rates of mortality and long-term illness, rather than its relative sparsity. Northern Ireland's relatively lower need is largely due to it having a relatively young population. We also compare the results of Scotland's allocation formula with the equivalent English formula and find that the two approaches differ in their view of what constitutes an equitable distribution of resources between PCTs.