News story

Deal or no deal?

New tax powers to be considered as Scotland Bill committee stage continues in House of Commons.

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Scottish Secretary David Mundell said MPs will be faced with a ‘no brainer’ decision in the House of Commons today when they have to choose between giving Holyrood £15 billion worth of new tax and VAT powers or opting for a Full Fiscal Autonomy (FFA) plan that would cost Scotland £10 billion.

The second day of the Committee stage of the Scotland Bill begins today (Monday) on the floor of the House of Commons when MPs will focus line by line on the tax section of the Scotland Bill legislation.

Mr Mundell said it was ‘a deal or no deal moment for the fans of FFA’. They can either vote for a more powerful Scottish Parliament that shares risks and resources with the rest of the UK or they could support a black hole plan that would cost Scotland the same amount as we currently spend on education and justice combined.

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The Scotland Bill was introduced on the first Parliamentary day after the General Election and was the first Bill to reach Committee Stage. It brings into law 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 will ensure the Scottish Parliament will have a wide range of tax powers which are currently worth around £15bn. This includes the power to set rates for income tax (including a 0% rate) and to keep of all the money raised in Scotland. In addition half of VAT raised in Scotland will stay in Scotland and the Scottish Parliament will also have control over Aggregates Levy and Air Passenger Duty.

Speaking ahead of the second day of committee stage, Mr Mundell said

The Scotland Bill will provide the Scottish Parliament with substantial tax and VAT powers worth around £15 bn and I look forward to discussing the tax sections of the Scotland Bill in detail with members across the House of Commons.

This is a ‘deal or no deal’ moment for the fans of FFA. They can either vote for a more powerful Scottish Parliament that share risks and resources with the rest of the UK or they can support a black hole plan that would cost Scotland the same amount as we currently spend on education and justice combined. Most people would consider this a bit of a no brainer.

This Government will not accept amendments that are not good for Scotland. Full Fiscal Autonomy would be bad for Scotland - leaving us with £10 billion less to spend by the end of this Parliament. To put this number into context - last year the Scottish Government spent £10bn on Education and Justice, this is everything from schools and colleges to our police force, prisons and court service.

He also pointed out the Scottish Government’s recent update of its oil and gas bulletin further damaged the case for full fiscal autonomy:

The Scottish Government’s central estimates on oil revenues published recently are over 80% lower than those published before the referendum. This makes their current policy of full fiscal autonomy for Scotland all the more of a full fiscal shambles.

Find out more about the Scotland Bill

The Scottish Government’s revenue and expenditure figures (GERS) for 2013/14 show spending on the following areas:-

Public Order and Safety 2,557m

Education and training 7,599m

Total for both areas equates to - £10.1bn

Published 29 June 2015