Leader: Alex Salmond's grand ideas are short on the fine detail

ALEX Salmond's campaign to achieve a substantial enhancement of the fiscal powers devolved to the Scottish Parliament has been given a significant fillip by the endorsement by the House of Commons Northern Ireland affairs committee of the idea of devolving corporation tax to the Province's assembly.

Although the committee, chaired by a Conservative MP, pointed out Northern Ireland is not Scotland as it has a border with Ireland where corporation tax is 12.5 per cent, the support for the principle of devolving the tax and the conclusion it can be done under European rules is a major boost for the First Minister.

Mr Salmond was quick to claim that a similar move for Scotland was now "inevitable". This is a typical piece of Salmond overstatement. For a start the Treasury, which is consistent in its reluctance to give away tax powers, will have to agree the policy for Northern Ireland. It has not yet done so. Second, there appears to be a considerable reticence within the UK coalition to cede more powers to Scotland beyond income tax.

This report moves the debate in Mr Salmond's favour but there now needs to be detailed discussion of the consequences of a similar policy for Scotland, not least the fact that it would mean Holyrood forgoing 2.8 billion raised here in corporation tax (the latest figure available for 2008/9) and then deciding what level to set north of the Border to replace that income. A first test, perhaps, for the First Minister's assertion that the Laffer curve effect would pertain: dropping the level of tax and expecting a rise in overall revenue.

This policy development and the questions it raises demonstrate a more general point. We have heard the demands by Mr Salmond of for more financial powers for Holyrood but we have not yet seen the detail of what exactly he would do with the new powers. For example, if, as he would have it, excise duty came to Holyrood as a policy tool to curb alcohol abuse, what would he do with his newly-acquired ability to vary the prices of tobacco or petrol?

What of other proposals for further devolution? How would Holyrood use borrowing powers for infrastructure projects, and where would that leave Scottish public sector debt? His and other nationalists' critique of the BBC in Scotland may be justified, but could a Scottish licence fee sustain a proper public service broadcaster north of the Border?

After meeting Mr Salmond earlier this week, Liberal Democrat Scottish Secretary Michael Moore promised to listen, but laid the onus on the Scottish Government to explain its plans in detail. Mr Moore has been on the back foot in his relations with Mr Salmond, but on this issue he has been prescient. Greater fiscal power for Holyrood is right in principle - with it should come greater responsibility - but the real test for Mr Salmond is not winning the powers but using them effectively.