The Scottish Government “will not hesitate” to block the post-referendum deal on more powers for Holyrood amid growing concerns Scotland could lose out financially, John Swinney has warned.
On the one-year anniversary of “the Vow” to give the Scottish Parliament more powers, the finance secretary received cross-party support for his demand to “strengthen” the measures in the Scotland Bill to reflect the original Smith Commission plans.
But, at Westminster, Prime Minister David Cameron challenged the SNP to set out how the plans for enhanced devolution fall short of the Vow and accused the Nationalists of “bluster” over the issue.
The Scottish Government fears the proposed cut to Scotland’s £30 billion block grant – believed to be around £17.7bn – is to too harsh and will prevent ministers from being able to use effectively new fiscal powers to boost the economy.
And a report published today by entrepreneur Sir Tom Hunter warns the latest devolution plans will only offer limited new powers for the Scottish Parliament. Mr Swinney told MSPs: “Without a framework that is fair to Scotland, the Scottish Government will not recommend that Parliament approves the Scotland Bill.
“I would have no hesitation to refuse to recommend a bill that did not properly allow us to address our own priorities.”
The plans for more devolution hand Holyrood control of income tax rates and bands, as well as some welfare. Control over air passenger duty and Crown Estate will also be devolved.
Mr Swinney said: “The Scotland Bill is a series of missed opportunities. It could have given the Scottish Parliament powers over employment law and trade unions, or all of social security – protecting Scotland from the policies of the UK government.
“As it stands, the bill constrains our ability to use its limited new powers and retains vetoes for UK ministers if they don’t like our plans. That’s not devolution, and flies in the face of the spirit and letter of the Smith Commission. It must be rectified.”
The concerns over the proposed new tranche of devolution were echoed by opposition MSPs, except the Conservatives. Labour, the Liberal Democrats and Greens backed a government motion by 105 to 13 at Holyrood last night calling for a fairer financial package.
Labour MSP Malcolm Chisholm, a former health minister, said: “I do agree that the fiscal framework is absolutely fundamental and I agree that we should not consent to the bill if we don’t have a fair fiscal framework.”
The Hunter Foundation published a new report today by Professor David Bell of Stirling University on changes to devolution in the wake of the vote on 18 September last year against independence.
Prof Bell’s report warned that “overall the transfer of the new powers will be at best a zero sum game”.
And there is little “flexibility” in the new financial powers because governments tend not to alter income taxes over fear of a public backlash.
The report said: “Because Smith’s proposals cover a narrow range of highly visible taxes, the Scottish Government will not have access to the more subtle ways that recent chancellors of the exchequer have used to raise cash.”
These include “stealth” taxes, such as those on insurance premiums. Additional welfare powers will add around £2.7bn a year to the amount the Scottish Government needs to spend, the report said.
But it added the Scotland Bill differs from the Smith Commission recommendations in “two important ways”, saying: “The power to create new benefits only applies to those areas where responsibility is to be devolved.
“This implies the Scottish Government could create a new benefit for carers but not for the unemployed.
“The transfer of individuals from disability living allowance to personal independence payments is to continue even though these benefits are to be devolved. This is highly unpopular because the tests for PIP eligibility are widely thought to be unfair.”
With no agreement in place over the amount Scotland receives in its block grant from Westminster, Sir Tom, founder of Sports Division, added: “We sit in a bit of a beggars muddle where the Scottish Government is negotiating with HM Treasury over settlements; a negotiation that will undoubtedly fuel consistent sniping that Scotland is not getting enough of its share.
“For me, personally, it’s time to move on, move forward and use the powers we have. The population decided, politicians are democratically elected and should and must respect the decision of the voters.”
The SNP’s Westminster leader Angus Robertson accused Mr Cameron of failing to deliver on the Vow in a clash during Prime Minister’s Questions yesterday.
Mr Cameron insisted: “We have delivered on all the promises we made to the people of Scotland.”
The Prime Minister claimed that Mr Robertson had failed to provide “one single example” of where the Vow was not delivered.
“If he can point to a tax we have promised to devolve but haven’t devolved I would accept it,” Mr Cameron added. “If he can point to a welfare change we promised to devolve that we haven’t devolved I would accept it.
“He hasn’t done those things. All he is doing is continuing an argument about process because he doesn’t want to talk about the substance.
“He should give me a list on the things that were promised and weren’t delivered then we could have a reasonable conversation.
“Until then it is all bluster from the SNP.”