THE SNP has backed landmark legislation that will hand sweeping new powers to the Scottish Parliament, despite five out of the party’s six key demands being rejected.
The Scotland Bill has been described as the biggest transfer of fiscal powers in 300 years and will double the amount of tax raised in Scotland.
Nationalists have branded the bill “dangerous” and a “dog’s breakfast” in recent months and were demanding six additional powers be added before agreeing to support it in Holyrood.
But they have now agreed to pass the legislation later this year, after securing key assurances that the financial changes will not adversely affect Scotland’s Budget – although they still insist it is a missed opportunity for Scotland.
Yesterday, Scottish Secretary Michael Moore said the agreement was a “major step forward” for devolution.
Alex Salmond had made six key demands for control over corporation tax, broadcasting, Crown estate revenues, alcohol and cigarette excise duty, and Scottish representation in Europe to be added to the bill’s provisions.
All have been dropped and only a call for more borrowing powers, which had already had cross-party support, was endorsed by the coalition government at Westminster.
Mr Moore said: “I am glad Scotland’s two governments have reached agreement over the Scotland Bill.
“The UK government has been clear from the outset that we believe it is the right package of new powers for Scotland.”
He added: “There has been a great deal of debate around the bill and we have worked closely and flexibly with the Scottish Government to make the changes required to secure an agreement.”
The key measure in the new legislation will double the amount of tax raised directly in Scotland to about £9 billion. This will be done by effectively cutting income tax by 10p, with MSPs then responsible for raising the remainder in line with need.
However, this means Scotland’s block grant from Westminster will be slashed, prompting concerns from the SNP government of a “deflationary bias”, which could see could see billions of pounds wiped off future budgets in Scotland.
The SNP says it has secured assurances that the new tax raising powers will not be introduced until both parliaments are satisfied the measures will not be damaging. Although the legislation will be passed in the next few months, these measures are not expected to come into force until 2015.
MSPs will also be given control over stamp duty and landfill tax, with Holyrood given further powers over national speed limits, drink-driving limits and the control of air guns.
The SNP also says it has secured assurances over the independence of the Scottish legal system, amid concern some of its judgments could be over-ruled by the UK Supreme Court.
Government strategy secretary Bruce Crawford said yesterday that although the Scottish Government was backing the bill, it would effectively be out of date before it reached the statute book – as Scotland prepares to vote in the independence referendum in 2014.
“We fought hard to get more powers in the Scotland Bill, and succeeded in removing the harmful elements, but the UK government resisted more significant changes,” he said.
“We know the people of Scotland want significantly more powers for the Scottish Parliament – debate around the independence referendum has shown that – and I believe the Scotland Bill will be out of date before reaching the statute book.”
An SNP-dominated committee of MSPs at Holyrood published a report earlier this year in which it recommended that Holyrood reject the measures amid concerns over the impact on Scotland.
But Scottish Liberal Democrat leader Willie Rennie, who also sat on the committee, insisted the deal was an “embarrassment” for the SNP.
“The SNP will be red-faced after their demands for rushed extra powers crumbled under scrutiny,” he said.
“Just months ago they described the Scotland Bill as a poison pill, dog’s breakfast and dangerous. They also insisted on the rushed delivery of full fiscal autonomy and the grandly titled six demands. But after all their hot air they have ditched their demands and concerns and now support the Scotland Bill.
“The SNP are either the worst negotiators in the northern hemisphere, or were embarrassed that their extra power plans crumbled.”
The Scotland Bill is the based on the recommendations of the 2009 Calman Commission, a wide-ranging review of Scottish devolution a decade on and how it could be made more accountable.
The bill is UK-wide piece of legislation and will need to be passed at Westminster, but MSPs will also play a key role in its implementation.
Labour leader Johann Lamont welcomed the agreement.
“This is an important development of devolution and I am glad that the SNP government has dropped its opposition to this progressive move,” she said.
Scottish Conservative leader Ruth Davidson said the agreement heralded a “new era of devolution in Scotland.”