Holyrood to get more devolved powers ‘year early’

THE UK government plans to introduce the extensive Smith Commission powers a year earlier than planned to ensure that next year’s Holyrood election is focused on what parties will do with them.

Smith Commission powers could be delivered a year earlier to coincide with the 2016 Holyrood elections. Picture: Ian Rutherford

The revelation comes as Scottish Secretary David Mundell is understood to be preparing to make concessions in the Scotland Bill over areas such as control of welfare.

The original plan had been to have them in place by 2018 but now the Scotland Office is confident it can “get the hard work done” a year earlier which means the first budget of the new Scottish Parliament will have to be about the new powers including income tax and welfare spending.

The timetable means that the spending review, announced by George Osborne last week, which will impose £20 billion of cuts on UK government departments, including an estimated £1 billion from Scotland’s budget, will coincide with the new powers being delivered to Scotland.

Earlier this week the Tories said that if the SNP wanted a different policy, the new powers will enable them to push through an alternative agenda.

The current Scotland Bill includes new powers for Holyrood, such as control of £2.5 billion of current welfare spending in Scotland, responsibility for all income tax on wages with the ability to vary the bands differently, and control of air passenger duty.

The Scottish Government will also be able to create new benefits or top up existing benefits and will not be limited by the £20,000 household benefit cap imposed by the Treasury.

Half of VAT receipts in Scotland will also be assigned to Holyrood, although MSPs will not have the power to vary the rate because of EU rules.

The aim of bringing in the powers quickly is part of a strategy to force the SNP to explain what they will do with the new powers.

The Scottish Tories have said they would not raise taxes and are thought to be considering putting an income tax cut in their manifesto.

However, the SNP have still not said what they intend to do with the new powers while they have been pressing for full fiscal autonomy.

A senior UK government source said: “We want these powers to be in as quickly as possible because the political debate in Scotland needs to focus on what the Scottish parties want to do in terms of tax and spend.”

“If the SNP want to do something differently and spend more they can do it but need to explain to voters how they will pay for it whether that is through tax or borrowing.”

In terms of changes to the bill, the source said: “Obviously we will not bring in full fiscal autonomy or measures such as the devolution of National Insurance which the SNP did not even bother to argue for.

“But there were sensible amendments on welfare and other sections which were put forward which we are now considering.”