By Keith Aitken in Edinburgh
10 May 2011
First Minister Alex Salmond has put greater financial powers for Holyrood at the top of his shopping list from Westminster in the wake of the Scottish National Party’s stunning victory in the Scottish Parliament elections.
In a telephone call to Prime Minister David Cameron within hours of winning an unprecedented overall majority of MSPs, Salmond set out his list of financial demands. They include accelerated transfer of capital borrowing powers under the Scotland Bill, control over the Crown Estate Commission and devolution of corporation tax.
Although Cameron made no immediate response, a concession on corporation tax is unlikely. The UK government is consulting on devolving this power to Northern Ireland to level the inward investment playing field with the Irish Republic, but does not appear sympathetic to extending the principle to Scotland.
There have been hints, however, that new borrowing powers could be in place next year, a year earlier than initially envisaged, and Scottish Ministers are pressing hard on the Crown Estate, which collects revenue from offshore marine resources.
The SNP sees dominance of next-generation renewable energy, much of which is expected to be generated offshore, as vital to Scotland’s economic resurgence.
Finance Secretary John Swinney said: ‘The Scottish Parliament needs to gain responsibility for the Crown Estate and Scotland’s £195 Fossil Fuel Levy surplus must be released now, as additional spending, so that we can reindustrialise Scotland by achieving our green energy potential.’
The SNP is impatient to press home its advantage after last Thursday’s election landslide. But the emphasis on financial powers also shifts attention from pressure on Salmond to specify an early independence referendum – a vote that polls suggest he would currently lose despite last week’s election triumph.
The first minister is committed to holding a referendum within the new five-year parliamentary term, but is thought to be reluctant to do so soon. He also indicated at the weekend that he was willing to offer the other parties a third option on the voting paper, that of fiscal autonomy within the UK.
Meanwhile, the promise of enhanced borrowing powers has brought a plea from a leading public finance academic for the new SNP government to eschew ‘big ticket’ capital projects. Richard Kerley, professor of management at Queen Margaret University, Edinburgh, said more would be gained by dispersing expenditure on less glamorous, but important, local needs.
