Tories throw down gauntlet on new Scottish powers

David Mundell MP. Picture: Andrew O'Brien
David Mundell MP. Picture: Andrew O'Brien
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THE SNP has been warned the Scotland Bill is its only opportunity in this parliament to achieve its aim of giving Holyrood total control of tax and spending and that there will be no negotiations afterwards.

The warning from Downing Street came as deputy SNP leader Stewart Hosie and Deputy First Minister John Swinney both suggested the UK and Scottish governments could enter negotiations over full fiscal autonomy after the Scotland Bill was passed.

The row broke out as MPs passed the second reading of the bill, which will eventually see the powers agreed by the all-party Smith Commission over areas such as income tax and £2.5 billion of welfare spending devolved to Holyrood.

Despite fighting the election on a call for full fiscal autonomy – which would mean Holyrood controlling all taxation and spending and paying Westminster a supplement for defence and foreign affairs – the Nationalists made it clear they would not put an amendment to achieve this.

The Institute for Fiscal Studies think tank had warned full fiscal autonomy could see a cut in income for Scotland of about £10bn and Edinburgh East MP Tommy Sheppard, who is on the SNP’s Scotland Bill team, had warned it would be a “silly thing to do” to immediately remove the Barnett Formula, which underpins funding for Scotland.

This was denied by First Minister Nicola Sturgeon in America, who said Scotland “could shoulder the burden”.

But in an interview ahead of yesterday’s second reading debate, Mr Hosie said: “We need to get the bill up to the Smith Commission. We have priority powers, as you laid out at the beginning over welfare, business taxes and minimum wage and then, as quickly as we can, given that proper negotiations have to happen, we want the rest of those powers.”

Later, Mr Swinney told journalists: “The timescale will be a product of the negotiation and the parliamentary process that is undertaken. We have acknowledged in our manifesto that change of that nature take time.”

A Downing Street source said there “will be no negotiations” on more powers after the bill.

He said: “The SNP want to have their cake and eat it. They will have umpteen opportunities with this bill to bring forward full fiscal autonomy.

“It is time for them to put up or shut up.”

During the debate, Scottish Secretary David Mundell called on the SNP to bring forward an amendment for full fiscal autonomy “so we can see what it means”.

He told MPs that for all the SNP’s “bluff and bluster”, there was substantial agreement on the “most significant” aspect of the bill – the devolution of income tax, representing £11bn in revenue, as well as on the principle, if not the detail, of devolving £2.5bn in welfare.

However, he faced challenges from among the ranks of the SNP’s 56 MPs about alleged vetoes in the bill over being able to introduce new powers, which Mr Mundell insisted were “only consultations”.

Ian Blackford, the new SNP MP for Ross, Skye and Lochaber, demanded that the Tories “deliver what the people of Scotland voted for”.