Mundell confident of ‘fair’ deal over new powers

David Mundell said talks with the SNP government had been 'very constructive so far'. Picture: Lisa Ferguson
David Mundell said talks with the SNP government had been 'very constructive so far'. Picture: Lisa Ferguson
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DAVID Mundell is confident a deal can be reached on a “fair and sustainable” new funding arrangement for Scotland in time to allow Holyrood to get new powers over income tax and welfare in less than two years’ time.

The Scottish Secretary said talks with the SNP government had been “very constructive so far” as he insisted he is “sure we will be able to reach a constructive settlement”.

The UK Government minister made the comments after Deputy First Minister John Swinney told MSPs getting the fiscal framework right was more important than reaching a deal before the winter.

The Conservatives are keen for the new powers in the Scotland Bill to be in place quickly, with talks taking place between the two administrations over how Scotland’s block grant from Westminster will be adjusted when MSPs get new tax and welfare powers.

Mr Swinney said the aim is for the discussions to be completed by the end of autumn but stressed: ‘’The determining factor for me is getting the framework correct rather than observing a particular timescale on that process.’’

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Mr Mundell has already announced he wants Holyrood’s new income tax powers to be in place from April 2017 - earlier than had been expected.

The Scottish Parliament should also start taking some responsibility for benefit spending at the same time, he said.

The Tory MP stated: “My target is to ensure that the Bill is law for next spring, ahead of the Scottish Parliament elections, so the Scottish Parliament election campaign can be based around the tax and welfare powers.

“The parties can set out how they would use the powers, what their plans are and who would pay for them.

“It’s very important that people in Scotland know ahead of next year’s elections what the plans are.

“We’ve been able to offer the tax powers to be available from April 2017, that’s likely to be linked to most of the welfare powers as well.

“So, within a year of the Scottish Parliament elections, Scotland will have its own income tax and welfare arrangements, and I think people need to know what is being proposed.”

The Scotland Bill, currently going through Westminster, will give MSPs control over income tax rates and bands, and will hand Holyrood half of the cash raised from VAT in Scotland while at the same time making it responsible for about £2.5 billion worth of welfare spending.

Mr Mundell said that “obviously there has to be a way of adjusting the block grant” to reflect those changes.

“You’ve got to get the adjustment formula right for that but discussions have been very constructive so far and I’m confident that they will be able to be concluded,” he said.

“I think everyone in Scotland, even people who voted Yes, wants to see Scotland having tax and spending powers, why wouldn’t you?

“Obviously they want to get a fair settlement, we want to get a fair settlement and I’m absolutely sure that that can be achieved.”

He said he would be bringing forward “substantive amendments” to the Scotland Bill within the next two to three weeks.

Mr Mundell said: “There will be a series of other amendments coming forward, I’m committed to that. I want to make sure that anybody who is objective will sign off the Bill as meeting the Smith Commission in full, in word and spirit.

“I don’t actually expect the First Minister to say that, but our pitch is to people who are not part of the political establishment, it’s to the wider public and to people who will look at it objectively, and I’m confident they will be able to say the Bill meets the Smith criteria in full.”