'Sorry' Swinney rapped for abuse of his power

JOHN Swinney is facing a parliamentary investigation after he admitted he had been wrong not to tell MSPs that their powers to change income tax in Scotland had been allowed to lapse without their knowledge.

• Repremand: John Swinney yesterday Picture: Jayne Emsley

At the end of a dramatic afternoon at Holyrood, the bloodied SNP finance secretary was forced into an apology following a hour-long ordeal at the hands of opposition MSPs who savaged his handling of the affair, calling on him to consider resigning.

Mr Swinney had misled parliament, they claimed, by failing to tell them that their tax-raising powers would not available until 2013, while giving the impression they were still active.

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It prompted one of the most sustained attacks ever directed at a minister at Holyrood, and saw Mr Swinney being reprimanded by the parliament for an "abuse of power".

The Scottish Variable Rate (SVR) was introduced in 1999 following the 1997 referendum when Scots said they wanted MSPs to have the power to raise or lower income tax by 3p in the pound.

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It only emerged last Thursday that those powers were not available, after UK ministers revealed that Scottish ministers had declined to pay a 7m administration fee to the Inland Revenue.

MSPs recounted numerous examples from the parliamentary record and from public documents where Mr Swinney and the SNP government had allowed the impression to form that the tax-raising powers were still ready for use.

Under intense pressure, the finance secretary backed down, conceding he had been wrong not to explicitly tell MSPs about the behind-the-scenes negotiations that had led to the powers falling into abeyance.

He said: "I should have come to parliament at the very beginning. I have accepted I made a number of wrong judgments. I didn't come before parliament. For that I apologise to parliament in making that error of judgement."

The apology defused growing pressure for a vote of no confidence being raised last night, but opposition MSPs said they would continue to pursue the matter.

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They passed a motion by 76 votes to 46 that declared it was "unacceptable for ministers to mislead the parliament over the existence of these powers".

The leaders of Labour, the Conservatives and the Liberal Democrats issued a joint statement declaring they wanted a full parliamentary inquiry.

Iain Gray, Annabel Goldie and Tavish Scott said: "The essential facts still need to be clarified. We are calling for the matter to be referred for a detailed investigation by the finance committee and for full disclosure of all information and correspondence and not the selection chosen by the Cabinet secretary."

Labour and the Lib Dems are also calling for the two former presiding officers, George Reid and Lord Steel, to consider the affair under the ministerial code.

An explosive day at Holyrood began with the Scottish Government releasing documents on discussions with Her Majesty's Revenue and Customs (HMRC).

In 2007, it informed Mr Swinney that if he wanted to implement the tax-raising power fully he would have to wait until April 2009, and pay 2.9m. He could implement it a year earlier, it added, but some residents who had only recently moved to Scotland would end up not paying the extra tax.

But Mr Swinney chose a third option, instructing officials and HMRC simply to ensure the tax could be properly implemented from 2011 onwards, with a price tag of 1.3m. The finance secretary said he did not tell MSPs at the time because he "had no intention of using" the tax.

Mr Swinney said the situation had then become more complicated as HMRC said delays meant the new tax system would not be ready until 2012. Then it informed Mr Swinney that the cost for the updates would be 7m.

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Mr Swinney told MSPs that he declined to pay the sum because of the cost to the public purse at a time of cuts.

The UK government said last week that the decision means that tax-raising powers are now in abeyance until at least 2013.

Mr Swinney at first conceded "regret" at not having shared the information with parliament. Only after a fierce and sustained attack from his opponents did he offer a full apology - a move which was seen to have saved his political career last night.

Those attacks came from all sides of the chamber, as MSPs declared that the government had ridden roughshod over the will of the Scottish people and the parliament, in acting without any scrutiny.

Lib Dem leader Mr Scott said: "The facts of this disgraceful episode are simple, and what they show is either SNP deceit or incompetence."