MSPs call for greater borrowing powers for Scottish Parliament

Published on 03/03/2011 12:48

MSPs are to call for borrowing powers of up to £5 billion as part of major reforms to devolution.

The Scotland Bill, currently progressing through Westminster, proposes to devolve more tax-raising and borrowing powers to the Scottish Parliament.

But a specially convened Holyrood committee has published a report today calling for proposed borrowing of 2.2 billion to be doubled to 5 billion.

It said the Scottish Parliament should also have the power to borrow directly from the markets by issuing bonds.

The report said Scottish ministers should have "complete discretion" over what the money is spent on without seeking agreement from the Treasury.

In addition, it calls for Holyrood to be given the power to vary higher rates of income tax independently in the future.

The Scotland Bill Committee was set up to scrutinise the legislation, and report its views and recommendations to the UK Government.

Its 239-page report outlines a series of amendments aimed at strengthening the new laws.

Committee convener Wendy Alexander said the Scotland Bill represented the most significant transfer of financial powers to Scotland from London since the creation of the United Kingdom.

She said: "This report is about delivering a much stronger financial settlement for Scotland and the next phase of devolution.

"I am proud of the work that my committee has done to improve the Scotland Bill. What we are now recommending is 'Calman plus'.

"Our report recommends a series of amendments that would give the Scottish Parliament new powers to raise up to 5 billion for major infrastructure projects by borrowing or issuing bonds - double the amount proposed by the UK Government.

"I believe that these powers could help the next Scottish Government pay for the new Forth Road Bridge or fund a major housing programme.

"The committee also makes a series of recommendations to strengthen the powers of the Scottish Parliament over a whole range of areas including council tax benefit, the Crown Estate and Gaelic broadcasting.

"It is more than 10 years since the Scottish Parliament was created. We are now taking the next steps on a journey with new financial powers and responsibilities, which will provide ministers with the tools to invest in our future and make life better for people in Scotland."

The committee has also suggested doubling the proposed short-term annual borrowing limit, which would see it increased from 500 million to 1 billion.

Other recommendations set out in the report include devolving the aggregates levy, and air passenger duty - once the UK Government has completed its current review.

The committee has recommended that corporation tax should not be devolved in the Scotland Bill.

A debate based on the committee's recommendations will be held in the Scottish Parliament next Thursday. The Bill will then proceed at Westminster.