Liberal Democrats Home Rule Commission calls for federal union

THE Scottish Government should be stripped of its power to effectively impose the council tax freeze across the country, under a blueprint for a federal UK unveiled today by former Liberal Democrat leader Sir Menzies Campbell.

• Lessening of Scottish Government control over council tax key to Lib Dem findings

• Call for councils to be able to set own council tax rates

• Liberals want to see Home Rule Commission findings implemented in case of ‘No’ vote in 2014 independence referendum

• Commission recommends scrapping of Act of Union 1707 and replaced by a federal union

• Scottish Parliament should raise two thirds of the money it spends, according to Commission

The SNP has held councils to the freeze since coming to power in 2007 by threatening to withhold a £70 million funding pot if authorities didn’t hold their rates.

The Lib Dems released the findings of their Home Rule Commission today which the party wants to see adopted if Scots reject independence in 2014.

And it says that councils should be free set their own local tax rates – with new laws passed preventing the Government in Edinburgh from linking this with any funding they give local authorities.

“Councillors should have responsibility for the decisions that affect their communities,” the report states.

The current funding set-up often “confuses questions of local accountability”, it adds.

The commission report today also proposes that the historic Act of Union between Scotland and England should be scrapped and replaced by a declaration of federal union.

Scotland would also raise about two-thirds of the money it spends under the plans.

Defence, foreign affairs and welfare would remain with a federal UK Government at Westminster.

“I don’t believe the present settlement is sustainable (with) greater powers in Wales, greater powers in Northern Ireland and England beginning, rather slowly but eventually, to take the view that some greater control over English affairs is appropriate as well.

“We need a settlement which will deal with all of these aspirations.

“There’s no doubt that the present arrangements are not sustainable. Federalism is the answer to many of the anxieties which people have, in particular the anxiety people have about independence.”

Asked why he did not favour allowing the Scottish Parliament to raise all of the money it spends, whilst remaining in the UK, Sir Menzies said: “That’s fiscal autonomy rather than fiscal federalism. Fiscal federalism is what we believe is in the best interests of Scotland because - putting it bluntly - it allows Scotland to get the best of two worlds.