Scotland Bill: Parties split as SNP threatens to block transfer of powers

A report published by a committee of MSPs yesterday into the legislation provoked a bitter split, with unionist members accusing the Nationalists of hijacking the Bill to lever in widespread new powers for Holyrood.

The Scotland Bill has been described as the “biggest transfer of financial powers for 300 years”. It would see controls over income tax and borrowing powers being devolved to Edinburgh.

But the SNP-dominated Scotland Bill committee said it would not be recommending Holyrood backing the bill in its current form, and the coalition government is now being urged to make changes to address concerns before it comes back to Holyrood.

SNP committee convener Linda Fabiani said: “Overall, we believe that the bill does not go far enough and its provisions, if enacted, represent a significant risk to public finances in Scotland.

“Our report concludes that, whilst the bill delivers a very limited amount of financial accountability, it does not deliver what Scotland needs, which is full fiscal autonomy.”

The SNP’s majority at Holyrood means that it has the voting muscle to reject the bill. Although, the coalition could push it through at Westminster, Scottish Secretary Michael Moore has pledged it will not be passed without the support of Holyrood.

Mr Moore said yesterday: “The report introduces new issues which are being presented for the first time as potential amendments to the Scotland Bill and for which we have not seen or been given supporting evidence.

“It is evident that not even the committee has been able to reach consensus on them. The impact these measures would have on Scotland is not clear.”

He added: “I will consider the committee’s report carefully and will pay particular attention to the comments made about the measures that are actually at the heart of the bill.”

Of the 44 recommendations in the committee’s report, 27 met with dissent from opposition MSPs. The SNP came forward with a series of late demands in the aftermath of their landslide election victory in May, calling for powers over corporation tax, the Crown Estate and broadcasting, among others to be devolved to Scotland.

Their main concern is over proposals to transfer about £4.5 billion of income tax revenues to Scotland, more than doubling the current total. These would be cut 10p, with MSPs responsible for raising the remainder in line with need.

Nationalists say this would damage the budget through the knock-on fall in Edinburgh’s block grant from Westminster.

Finance secretary John Swinney has already warned that Holyrood must have an effective veto over the introduction of the new tax-raising powers, through a joint commencement order.

But the SNP threats prompted an angry response from Labour, Liberal Democrats and Tory members of the committee, who published their own “minority report” yesterday, rejecting the main report findings.

They accused Nationalists of using the bill to transfer “as many powers as possible” to Holyrood in line with their pro-independence agenda.

The Scottish Parliament would be given responsibility for airgun regulations, drink-driving limits and the national speed limit under the Scotland Bill’s provisions.

MSPs would be handed more than £2bn in borrowing powers for building projects such as roads and hospitals, although the Nationalists are calling for this to be doubled.

As well the income tax powers, Scotland will also get control over landfill and stamp duty tax, which currently amounts to about £500 million in revenue.

But the SNP have demanded a range of new powers added, including full fiscal autonomy for Scotland, as well as devolution of welfare and benefits.

They also want control over the Crown Estate commissioners north of the Border. The unionist parties back this in a “wider context”, but not in the legislation.

The Liberal Democrat leader Willie Rennie, said: “The SNP made last-minute demands for additional powers, but failed to provide evidence in time.

“The Scotland Bill was made in Scotland, and it should not be killed in Scotland. We support the changes which will make members at the Scottish Parliament responsible for the taxes they raise, as well as the money they spend.

“The Scotland Bill was made in Scotland and delivers major new powers for the Scottish Parliament. Yet, the SNP threaten to block these new powers that will give the Scottish Parliament more powers to determine Scotland’s future.”

Labour’s James Kelly added “If the SNP throw the baby out with the bathwater and block this powerful package of additional powers, the SNP will be turning down crucial job-creating powers and will be guilty of putting party politics before the interests of the people of Scotland.”

The bill is the culmination of work by the Calman Commission, launched by the Labour, Liberal Democrat and Tory parties in 2008 to look at the devolution settlement ten years on.

Tory David McLetchie accused the SNP was using the bill as a platform for independence.

He said: “I’m afraid the majority position is not based on evidence, and is based simply on assertion. For them, the bill is a platform to advocate their case for independence.”

The bill should be about improving devolution within the UK, he added.

SNP committee member Stewart Maxwell said: “The Scotland Bill, as it stands, simply tweaks the edges of devolution. The people of Scotland and this parliament have moved on… and it is time for the UK government to catch up.

“The priority now for the UK government must be considering this committee’s report and bringing their bill up to the aspirations of the people and parliament of Scotland.”

• The committee consists of six SNP MSPs and five from the oppositions parties. The Nationalists are convener Linda Fabiani, North East MSP Nigel Don, former minister Adam Ingram, Glasgow MSP John Mason, West of Scotland MSP Stewart Maxwell and former journalist Joan McAlpine.

There are two Labour MSPs, including vice-convener James Kelly and party finance spokesman Richard Baker. Liberal Democrat leader Willie Rennie is also a member, along with former Conservative leader David McLetchie and Lothians MSP Alison Johnstone on behalf of the Green party.