The Scotland Act gives Scotland the best of both worlds – an integral place within the UK family, together with a strong Scottish Parliament with the power to take decisions for Scotland and to raise the funds needed to put these decisions into practice.
That was the message from Scottish Secretary Alistair Carmichael as he published the second annual report on the progress of implementing the financial provisions of the Scotland Act 2012.
The Act, granted Royal Assent in May 2012, represents the largest ever transfer of fiscal powers from Westminster to the devolved Scottish Parliament. These include:
- a Scottish rate of income tax
- borrowing powers and a cash reserve for Scottish ministers
- the power to create new devolved taxes
- enabling the replacement of UK Stamp Duty land tax and UK landfill tax with new Scottish taxes
Substantial progress has now been made towards implementing these powers, as the report details.
The UK and Scottish governments have been working together to ensure a smooth transition from UK stamp duty land tax and landfill tax to Scottish replacement taxes in April next year. Enhanced borrowing powers by Scottish ministers will also come into effect in April 2015, including the ability for the Scottish Government to issue bonds, and access to a Scottish cash reserve for managing the revenues from the new devolved taxes.
The UK and Scottish governments have also made progress on the implementation of a new Scottish rate of income tax, working to identify Scottish taxpayers and ensure the systems are in place for its introduction in April 2016. Powers for creating new devolved taxes are already in force, but not yet used.
Mr Carmichael said:
While the referendum is capturing people’s attention, the Scotland Act 2012 is delivering a real step change in the devolution settlement for Scotland.
From April next year, new Scottish taxes will be collected by a Scottish tax authority with the revenues being available to spend in areas devolved to Scotland.
Through the Scotland Act 2012, Scotland is benefiting from the best of both worlds: an integral place within the UK family, together with a strong Scottish Parliament with the power to take decisions for Scotland, and to raise the funds needed to put these decisions into practice.
Both of Scotland’s governments, working together, are making good progress in preparing the financial powers. I am proud to be part of delivering these for the people of Scotland.
The Scottish government has also published its own report on the transfer of powers.