Scotland Bill: A step into the future with new tax raising powers

SWEEPING new powers are to be handed to the Scottish Parliament after MSPs last night backed legislation described as the biggest transfer of controls since the Act of Union in 1707.

The Scotland Bill will see Holyrood given new powers over the level of income tax raised north of the Border, as well as new borrowing powers which could help pay for milestone projects like High Speed Rail.

Opposition parties at Holyrood hope it will show that devolution is working and could help save the union when Scots come to vote in the independence referendum. But the SNP Government says the Bill is a “missed opportunity” which does not provide the measures to revive Scotland’s recovery.

MSPs at Holyrood last night endorsed a legislative consent motion (LCM) which effectively allows the UK government to pass the Bill at Westminster next week.

Scottish Secretary Michael Moore said: “The Scotland Bill is the largest ever transfer of financial powers to Scotland since the creation of the United Kingdom.”

He added: “The resounding vote by the Scottish Parliament takes us a major step towards providing Holyrood with radical new financial powers that will enable MSPs to bring real change to Scotland in the years ahead.

“There were times when it sounded like the Scottish Government would not support this transfer of powers.

“However, I am glad that the Scottish Government and Parliament have now chosen to come on board and support a Bill that will further empower the Scottish people and make the Parliament more accountable to them.”

The Bill has had turbulent journey through Holyrood, with the SNP threatening to vote down the legislation. In the aftermath of the Nationalists landslide victory in the Holyrood election last May, Alex Salmond make six key demands that he wanted included in the Bill. These covered control of corporation tax, broadcasting, excise duties, Scottish representation in Europe, devolution of the Crown Estate and extra borrowing powers. Apart from some partial movement on the latter, there was no concessions to the SNP Government.

And Mr Salmond said yesterday: “What we need is the full range of economic powers.

“The Westminster parties have set their face against that – they’ve set their face against the Scottish people.

“I think the answer is for the Scottish people to give a resounding yes vote in the referendum.”

Income tax would effectively be cut in Scotland by 10p under the Bill’s provisions, with Scottish ministers then free to raise this back up to the level required in line with need.

Scotland’s block grant of £30 billion from Westminster would be cut by about 35 per cent to even this up.

The Scottish Government will also get borrowing powers for the first time worth about £2.7bn in total. Stamp duty tax, landfill tax and the power to create new taxes will also be devolved to Scotland. In all, the amount of tax raised directly in Scotland will double to about £9bn under the legislation, although this is still only about 16 per cent of all Scottish taxes.

The Bill will also include new powers over air weapons, responsibility for drink-driving and the national speed limit on Scottish roads and a role in appointments to broadcasting and the Crown Estate.

Cabinet secretary for Government strategy Bruce Crawford told MSPs last night the Bill has already been “bypassed by history and events” with the pending independence referendum and most parties examining plans for further devolution.