Scotland Bill 'a tax opportunity missed'

THE head of an influential think tank has told MSPs that a failure to give Holyrood control over more taxes could cause "economic instability and volatility".

Reform Scotland chairman Ben Thomson said Westminster plans for handing more financial powers to the Scottish Parliament would be an "opportunity missed".

Mr Thomson claimed that under the plans outlined in the Scotland Bill, the Holyrood government would still depend on a block grant from Westminster.

During a hearing of the Scotland Bill committee yesterday, he called for the Scottish Parliament to be in charge of spending all funds generated from taxes raised north of the Border.

He also called for "greater control over taxes" such as sales and property tax, as well as extended income tax powers.

Mr Thomson claimed that the powers proposed in the Scotland Bill to let MSPs set the income tax rate did not go far enough.

He said: "We're concerned that this is an opportunity missed. While the debate over what further fiscal powers should be devolved was clearly important, the real challenge was how politicians would use them once transferred to achieve economic growth. Not having control over a range of taxes instead of the limited measures proposed in the Scotland Bill could lead to economic instability and volatility."

Under questioning from convener Wendy Alexander, Mr Thomson said that Reform Scotland had never claimed that greater fiscal responsibility automatically led to increased economic growth.

However, Labour MSP Peter Peacock said that the Scottish Parliament already had "powers on spending on things liked education and transport".