Scotland Bill: SNP to push for full fiscal autonomy

Scotland's First Minister Nicola Sturgeon, left, made a pledge to push for it during the general election campaign. Picture: AP

After weeks of debate within the party, Mr Hosie told The Scotsman the SNP will lodge an amendment that would give ministers at Holyrood complete control over tax and spending.

First Minister Nicola Sturgeon made a manifesto pledge during the general election campaign to try to introduce the radical measure, which would see an end to the block grant calculated through the Barnett Formula, paid by Westminster to Holyrood.

The Scottish Government would be responsible for all revenues and spending in Scotland and pay a supplement to the UK government for Scotland’s share of spending on defence and foreign affairs.

Senior SNP figures have recently suggested the party would not put in an amendment for full fiscal autonomy to the Scotland Bill, which aims to transfer to Holyrood powers on welfare, income tax and other areas agreed by the all-party Smith Commission.

The respected economic think-tank the Institute for Fiscal Studies has warned the move would cost Scotland £10 billion a year.

Edinburgh East SNP MP Tommy Sheppard said that it would be “a disaster” and East Lothian SNP MP George Kerevan has described the policy as “economic suicide”.

Earlier this week, Mr Hosie and Deputy First Minister John Swinney suggested the party would seek to make improvements to the bill then try to negotiate for more powers after it was passed.

But last night Mr Hosie revealed that the SNP will now put in the amendment.

He said: “We will be putting in an amendment to achieve it [full fiscal autonomy]. It is just a matter of finding an acceptable form of words. We think we have found that but if not we will come back with a different form.”

Conservative Scottish Secretary David Mundell welcomed the move.

He said: “At last we will be able to have a proper debate on devolution. Hopefully the SNP can also explain what they mean by full fiscal autonomy because there is a lot of confusion around it.”

Mr Mundell also confirmed that he is considering accepting an amendment from Labour to have an independent report on the impact to Scotland and the rest of the UK of fiscal autonomy.

However, he has said that “parties that care about Scotland” will oppose the amendment, with the committee stage of the Scotland Bill starting on Monday.

Labour’s shadow Scottish secretary Ian Murray said that the decision by the SNP to push for a measure which could take billions of pounds of public spending out of Scotland had left their “economic credibility in tatters”.

He said: “It would be a disaster for Scotland’s schools and hospitals as it would mean extra cuts of £7.6bn over and above what the Tories are doing.

“We know the right-wing backbenches of the Tory Party are desperate to scrap the Barnett Formula.

“The real danger for Scotland is an SNP-Tory alliance that would see the end of Barnett and big cuts to our public services. Labour will fight this every step of the way and would urge the SNP to back our amendment calling for a full and independent report on the consequences of full fiscal autonomy before gambling with Scotland’s future.”

Yesterday, the SNP were taunted in the Commons by Mr Mundell and Prime Minister David Cameron for not pushing for the policy.

In Prime Minister’s questions, Mr Cameron said: “The Scottish Government has the advantages of the additional funding it has been getting under this government.

“I do notice that consensus in the SNP has rather broken down over full fiscal autonomy.

“Because, of course, if they got full fiscal autonomy, they probably wouldn’t be able to afford to be a living wage employer.

“I have been following these things closely. The new MP for East Lothian [George Kerevan] has called the policy economic suicide, the new MP for Edinburgh East [Tommy Sheppard[ has called full fiscal autonomy a disaster.

“It seems to be that the SNP’s new approach is to demand something they don’t want and then to complain when they don’t get it.”

In a reference to Western Isles MP Angus MacNeil locking himself in the toilet when he found himself in the wrong voting lobby for the EU Referendum Bill, Mr Mundell suggested “the toilets [in Parliament] will have to be expanded so the SNP MPs can all hide there to avoid having to vote for it”.

• Have you visited our new Scottish food and drink site?