Of course Westminster should have shared socially-generated wealth with all parts of the UK from the start (1707). Instead it sacrificed peripheral UK prosperity so that vast public value could continue to be directed into London site owner pockets.
However, devolved tax raising powers now provide Holyrood with the opportunity to start changing damaging taxes to benign AGR. Any missed opportunities to enact AGR reforms would transfer responsibility for Scottish inequality from Westminster to Holyrood.
Instead of repressing jobs and enterprise by taxing them, Holyrood should collect Scotland’s socially produced surplus to properly fund public services.
The mechanism that would redistribute our socially produced surplus (much of it today unjustly awarded to site owners) is Adam Smith’s Annual Ground Rent. Replacing taxes on wages and trade with AGR (aka Land Value Tax) would not only share that surplus fairly – tackling embedded inequality – but also boost and share prosperity, reversing the age-old flow of people and resources out of our country.
Devolved tax powers allow Holyrood to cancel at least £12bn of annual Scottish Deadweight Losses immediately. That’s about one third of the total avoidable damage automatically inflicted on the Scottish economy each year by Westminster taxes on wages and trade.
Our report, Scotland’s Path to Prosperity (submitted to the Scottish Land Commission in 2018) is a fully costed and highly detailed proposal demonstrating how Holyrood should use devolved powers to replace a proportion of Income Tax with AGR/LVT. Adopting our proposals would boost the Scottish economy by over 9% a year without raising any extra revenue.
Holyrood should undermine the central pillar on which Westminster is built. And confront the reason why the UK Idea, as currently packaged, could never work in Scotland’s interests: the menace of Rent-seeking.