The UK Government will only proceed with their radical plans to strengthen Scottish devolution “with the formal and explicit consent of the Scottish Parliament”, Scottish Secretary Michael Moore confirmed in the House of Commons today.
Opening the debate on the 2nd Reading of the Scotland Bill, Mr Moore told MPs that the Coalition Government’s legislation amounted to the largest transfer of fiscal powers from London since the creation of the UK. He said it would fundamentally change the powers and responsibilities of the Scottish Parliament and, for that reason, could only happen with the agreement of the Holyrood.
The 2nd Reading debate in the House of Commons is the start of the UK Parliament’s scrutiny of the Scotland Bill. The Scottish Parliament established a Scotland Bill Committee in December to study the Bill in detail. The Scottish Parliament is expected to vote on a Legislative Consent Motion for the Scotland Bill in March.
The Scotland Bill is the UK Government’s legislation to implement the recommendations of the Calman Commission which examined ways to strengthen devolution in Scotland.
If supported by the UK and Scottish Parliaments, the Scotland Bill will mean that:
- MSPs at Holyrood will have to set a Scottish rate of income tax each year and will be responsible for raising a much greater proportion (around 35%) of the revenue they spend.
- The Scottish Parliament with get borrowing powers of £2.7bn
- The Scottish Parliament will have responsibility for stamp duty, landfill tax and the ability to propose new taxes.
- Policy responsibility in areas such as air weapons, drink drive limits and speed limits will be devolved to the Scottish Parliament and Scottish Government.
- A Scottish Cash Reserve will be created to bank and save money where tax receipts exceed those expected.
Opening the 2nd Reading debate in the House of Commons, Scottish Secretary Michael Moore said:
“We have a Parliament in Scotland that can determine policy on a wide range of subjects. It can determine how and where money is spent. But at present it cannot be held effectively to account for raising the money it spends
“The Scotland Bill addresses that imbalance by providing a package of taxation and borrowing powers that will see the Scottish Parliament become accountable for over a third of the money it spends. In doing so, the Bill represents the largest transfer of fiscal powers from central government since the creation of the United Kingdom.
“It is a radical but responsible step. Most significantly, we will create a Scottish income tax. We will create that tax by cutting 10 pence off the basic, higher and 50 pence tax rates for Scottish taxpayers, adjusting the block grant in proportion, and allowing the Scottish Parliament - indeed, obliging it - to reset those rates at a level of their choosing.
“This will give Scottish Ministers and the Scottish Parliament a much more significant stake in the performance of the Scottish economy. The level of the Scottish rate will be Scotland’s to decide. And those who set the rates will answer directly to those affected by them. Power will rest with the Scottish people.
“Mr Speaker, this is the first time since the creation of devolution that a Government has brought forward legislation with such wide-ranging effect on the current settlement. Indeed, this Bill will fundamentally change the powers and responsibilities of the Scottish Parliament.
“For that reason, this Government will only proceed with this Bill with the formal and explicit consent of the Scottish Parliament.
“It is right and proper that the Scottish Parliament should examine the measures that we set out in the Scotland Bill. I welcome the thorough way in which it is going about its business. And I look forward to returning to discuss the provisions with the Bill committee in the Scottish Parliament next week.”
Read the Secretary of State’s speech to Parliament