By Keith Aitken in Edinburgh | 18 April 2012
MSPs will this afternoon vote through the Scotland Bill, described by Scottish Secretary Michael Moore as ‘the largest ever transfer of financial powers to Scotland since the creation of the United Kingdom… a momentous vote for Holyrood’.
The Bill, based on the recommendations of Sir Kenneth Calman’s cross-party Commission on Scottish Devolution, gives Holyrood authority to vary a significant swathe of UK taxes. It also gives the Parliament limited borrowing powers for the first time, devolves some areas of road traffic and firearms laws, and tidies up processes for taking Scottish cases to the UK Supreme Court.
Chief among the fiscal powers is a right to vary the rate of income tax above the first 10p, offset by a consequent reduction in Holyrood’s block grant from Westminster. Edinburgh will also take control of stamp duty and landfill tax and will be able to introduce new taxes with Westminster’s agreement.
This means the Scottish Government will have to set a Scottish income tax rate, but many doubt that it will use the right to differ the rate from the rest of the UK, which could create administrative nightmares for employers. Holyrood has never found it politically viable to use its existing power to vary the basic rate by up to 3p.
Although the fate of the Bill this afternoon is not in doubt, with all parties committed to vote in favour of the Legislative Consent (or ‘Sewel’) motion that allows Westminster to process the measure into law, there is little likelihood of the occasion living up to Moore’s ‘momentous’ tag.
The Calman Commission, supported by Labour, the Tories and the Liberal Democrats, set out to review the devolution settlement in the wake of the Scottish National Party’s success in forming a minority government at Holyrood in 2007.
But it was overtaken by the unexpected SNP landslide a year ago, which both guaranteed an independence referendum and completely changed the terms of constitutional debate, leaving the Scotland Bill looking rather anachronistic.
Since then, the Bill has been discussed mostly in terms of what should follow it, with various internal party reviews and external groupings working away to come up with further extensions to devolution, while the SNP refines its independence proposition in readiness for the referendum, likely to be held in 2014.
