Wednesday, 25 November 2009

Scotland and More Powers

Scotland to be given new tax powers

Avril Ormsby

Scotland will be given greater tax-raising powers under the biggest shake-up in the nation's finances for 30 years, the government said on Wednesday. But some critics have accused Labour of adopting spoiler tactics ahead of the pro-independence Scottish National Party's (SNP) publication of its White Paper on its Referendum Bill on independence next week.

The proposals, contained in the government's White Paper "Scotland's Future in the United Kingdom," would also not be introduced until early in the next parliament, after an election Labour is tipped to lose. Under the proposals, Westminster would cut basic and higher rates of income tax by 10 pence in Scotland, leaving the devolved parliament to decide on the overall tax level.

As a result, 4.5 billion pounds would be cut from the annual block grant from London, which finances Holyrood's yearly budget of 30 billion pounds. "Since the first day of devolution, the Scottish government has been accountable for how it spends taxpayers' money," Secretary of State for Scotland, Jim Murphy, told the House of Commons. "Under today's proposals, they will also be held to account for how they raise it. We will give the Scottish Parliament greater freedom -- but also the responsibility -- to set the level of income tax in Scotland."

The transfer in tax powers would also cover stamp duty, landfill tax and aggregates levy. The Scottish Parliament would also be given new borrowing powers. The government's White Paper was in response to the Calman Commission, headed by Glasgow University's Chancellor Kenneth Calman. Labour, which said it still supported the Union, accepted 39 of its 42 recommendations, including transferring powers to Scotland for air guns, drink drive limits and national speed limits.

The SNP quoted Calman as saying these last three proposals could be implemented quickly and easily, and accused the government of cynically delaying for political advantage. The Conservatives said they would produce their own White Paper, if, as seems likely, they win the general election, due before June. "We accept that the Scottish Parliament needs to have more financial accountability through greater powers over raising and spending taxes and over borrowing," Conservative leader David Cameron said in a statement. "However, we will not be bound by any White Paper produced by the present government in the short time that remains before the election."

Scotland's nationalist First Minister Alex Salmond has criticised the Calman proposals, introduced in June, for failing to transfer fiscal control over areas such as corporation tax and North Sea oil and gas. Under the original devolution act the Scottish government has the power to vary income tax three pence above or below the basic rate -- the so-called "Tartan Tax" -- but this has never been used during 10 years of devolution. Salmond is due to publish the White Paper on his Referendum Bill next Monday, despite a lack of support from other parties in Holyrood and a YouGov poll for the Daily Telegraph this week, which showed 57 per cent of those who responded would say no to independence.

Comment: it appears that devolution is about devolving powers without giving up control. Legislative powers on airguns, drink drive and speed limits, stamp duty and landfill tax are a far cry from the powers that Scotland needs - jurisdiction over its oil reserves, defence policy, taxation and other areas which are important to a government that represents and executes the will of the nation.

Now read this: the decline of Labour in Wales......

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