As a brief sidetrack – what would actually happen in the absence of a rates resolution?
In theory there just wouldn’t be a Scottish rate of income tax, leaving a £20bn gap in devolved finances.
But realistically some kind of agreement would need to be made, probably with the UK government stepping in to help.
There could be a move to void that year’s block grant adjustment and just use UK-wide tax rates, but that would still leave a big shortfall.
Or a deal could potentially be done to amend the Scotland Act to allow existing rates to continue until a rates resolution was agreed.
The only certainty is that it would be a horrible mess, which all concerned would far rather avoid.
There is technically a path to avoiding the tax deadline – MSPs could agree to pass the first two stages of the budget, then pass a tax rates resolution, and then vote the budget itself down at stage three.
It would require quite a lot of coordination and cooperation between parties apparently incapable of doing a deal.
But there’s actually another deadline in terms of local authority budgets – councils need to set their own tax and spending plans by mid-March, ahead of the new financial year. It’s not hugely clear how they could do that in the absence of a Scottish government budget outlining how much funding they are getting.
There’s a reason why elections aren’t usually held in the middle of the budget process, on the eve of a new financial year – it throws up all kinds of monstrous complications, and the kind of uncertainty that citizens and businesses could really do without.
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