Scottish Deputy First Minister John Swinney has said that fiscal autonomy is the best route to fulfil Scotland’s potential - but Scottish Secretary David Mundell said it will cost every family in Scotland £5,000.
Mr Mundell described the plan as a “full fiscal shambles” and confirmed the UK Government will reject an SNP amendment to hand MSPs the power to move to full fiscal autonomy at a time of Holyrood’s choosing.
The first day of the committee stage of the Scotland Bill begins today on the floor of the House of Commons when MPs will scrutinise the legislation line by line.
The Scotland Bill will bring into law many of the new powers agreed by the all-party Smith Commission and make the Scottish Parliament one of the most powerful devolved parliaments in the world.
The Scotland Bill was the first Government Bill to be introduced after the general election and is now the first Bill to reach the committee stage.
Speaking ahead of the committee stage, Mr Mundell said: “The Prime Minister has made it clear that the Government will carefully consider any changes to the Bill that are sensible.
“An amendment that kills off the Barnett formula and ends the sharing of resources across the UK is about as far away from sensible as one can get. It would be a full fiscal shambles that would cost every family in Scotland around £5,000.
“The Government will not accept amendments that are not good for Scotland. The Institute for Fiscal Studies has estimated that fiscal autonomy would mean Scotland having almost £10 billion less to spend by the last year of this Parliament. That is not good for Scotland. That is why the Government will stand up for Scotland and resist the amendment.”
With fiscal autonomy expected to be off the table, Mr Swinney has said that the SNP will focus on securing more limited additional powers beyond those recommended by the Smith Commission, including business taxes, employment law, minimum wage, further welfare power and equality law.
SNP depute leader and treasury spokesman Stewart Hosie said: “The Tories must stop playing games with Scotland, and clarify whether or not David Cameron’s assurance that further changes to the Scotland Bill will be considered still stands.”
He added: “With only one MP in Scotland and no democratic mandate, the Tories cannot ignore the wishes of half of the Scottish electorate who voted SNP last month.
“Full fiscal autonomy means prising control over the economic and financial levers of government from the Tories, and placing it in the hands of the parliament and people of Scotland. David Mundell’s rejection of our amendment shows that he wants George Osborne to be able to impose austerity cuts that will hit families across Scotland hard.
“Scotland needs significant new powers over our economy, job creation, welfare, wages and living standards if we are to make the most of our nation’s potential. Giving the Scottish Parliament the ability to introduce full fiscal autonomy would put the power to grow our economy and end austerity in Scotland’s hands, where it belongs.”