'I wasn't looking for an academic fight on tax-raising powers,' says Salmond

Salmond: "7 million is a lot of money, especially at this time Picture: TSPL

First Minister Alex Salmond tried to play down the controversy, claiming it was an "academic" issue. The Conservatives and Labour have called on finance secretary John Swinney to make a full statement to MSPs to answer questions on what happened to the Scottish 3p variable tax rate.

This week, Scottish Secretary Michael Moore wrote to party leaders in Holyrood explaining that the tax-varying powers, which were voted for in a referendum in 1997 by the Scottish people, would not be available until at least 2013, because the SNP had decided in 2007 not to renew them.

The Scottish Government said the final decision was made in the summer, and yesterday Mr Salmond claimed that he had considered it an "academic issue" so did not think it needed to be made public.

"I wasn't looking for an unnecessary academic fight," he said.

He said that had changed after Michael Moore's letter yesterday, which showed the UK government was using this issue as a "Trojan horse" - with the aim of ensuring Scotland paid for the cost of the soon-to-be-introduced Calman powers to bring in the larger variable rate of 10p.

Mr Salmond said: "The reality of the old system was that you could use it at ten months' notice. Under the new system, we were presented in July of this year that we pay 7 million which would allow us to activate the power in 2013-14." This was due to a computer system change at the HMRC.

Explaining the decision not to pay, he said: "Firstly, 7 million is a lot of money, especially at this time. Secondly, the tax-raising power is about to be overtaken by new legislation. And thirdly, there's an extraordinary precedent being created here, where the Scottish Government could pay for changes."

But Labour's finance spokesman, Andy Kerr, said: "The SNP's decision to surrender the Scottish Parliament's tax-raising powers without telling MSPs is absolutely disgraceful. John Swinney needs to make an emergency statement explaining this debacle. We need to know when the decision was taken, which specific minister was responsible, whether it was discussed by the SNP cabinet and why they chose to keep it a secret."

Scottish Conservative leader Annabel Goldie added her voice to calls for a statement, describing the move by the SNP as "a slap in the face for democracy". She said: "It was the settled will of the Scottish people that Holyrood should have tax-varying powers."

A Scotland Office spokesman said Mr Salmond had written back to them outlining his position. He added: "The SVR power is now not available for the Scottish Parliament to use as a result of a decision taken by the Scottish Government.

"The purpose of the Secretary of State's letter was that he believed it to be important that this information was conveyed to the political parties in Scotland. It was the case that SVR was being referred to during the Budget statement and the Scottish Secretary wanted all parties to be absolutely clear on the current position with SVR."

Public services commission

Alex Salmond yesterday said his government was "still ambitious" for public services, as he launched a new commission to examine how these could be reformed in the wake of spending cuts.

Campbell Christie, below, the former general secretary of the Scottish Trades Union Congress, is to chair the group, which has been tasked with ensuring the sustainability of public services at a time of "the most serious budget reductions for a generation".

The commission includes Pat Watters, the president of the local government organisation Cosla, journalist and broadcaster Ruth Wishart and Jim McColl, from the Scottish Government's council of economic advisers.

Also signed up are Dr Alison Elliot, the convener of the Scottish Council for Voluntary Organisations and a former Church of Scotland Moderator, and Kaliani Lyle, Scotland commissioner of the Equality and Human Rights Commission.