ABSTRACT
This chapter explains that 2014 Smith Commission Report was agreed between the main Scottish political parties, immediately becoming the basis for further fiscal reform in Scotland. This followed from the independence referendum and a vow promised by the unionist parties to increase powers to the Scottish Parliament should Scotland vote no. Smith recommended in 2014 that the Scottish Parliament should have the power to set the rates of income tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers. This chapter examines that continuity of thinking is also evident in macroeconomic management, with the centrality of the UK government emphasized. It also discusses that fiscal proposals made by the leading Scottish political parties immediately prior to the September 2014 referendum and assess each of them against the standard of a hard budget constraint (HBC) a constraint that would force the Scottish Government to compare the benefits and costs of its spending decisions.
