ABSTRACT
This chapter explains about the debate on fiscal decentralization in the UK has got to, following on from the Scottish independence. It was the discovery of North Sea Oil in the 1960s and its subsequent exploitation that gave new life to the Scottish National Party. The Scottish political establishment as an assortment of cranks and misfits, the Scottish National Party (SNP) won a notable by-election victory in 1967 in Hamilton and made further gains at General Elections in 1970 and 1974. The SNP argues that Scotland's fiscal dependency on Westminster is a fetter and the financial settlement is unfair because Scotland is denied the full benefits of oil revenues that it would receive if it were independent. Meanwhile successive governments underplayed the contribution of oil revenues to UK public finances. Certain administrative and political responsibilities were passed over to the Scottish Parliament but core nation-state functions were retained at the Westminster Parliament and are exercised by the UK government.
