London will decide Scotland’s tax powers insists UK Treasury Minister


By a Newsnet reporter
UK Treasury Minister David Gauke has refused to accept that the Scottish Parliament should have an equal say on the tax powers planned for Scotland by the Tory government.
The Tory MP for South West Hertfordshire was giving evidence to the Holyrood committee that has been set up to scrutinise the Scotland Bill which contains tax plans based on proposals made by the Calman Commission.

Mr Gauke was repeatedly pressed on ‘joint commencement powers’ that would ensure changes could only be implemented with the agreement of Holyrood and Westminster.

However the Oxford University graduate refused to budge on Westminster’s right to impose the new fiscal arrangements regardless of how the Scottish Parliament votes.

Asked what evidence there was to back the proposed 10p tax rate the Tory MP admitted that there was no evidence to support it nor was there any methodology behind it.  Mr Gauke’s admission echoes evidence given by Sir Kenneth Calman who admitted the figure had been based on ‘guesswork’.

Mr Gauke also appeared to gaffe when, in his summary, he admitted that the finals costs of the bill were unknown.

Stewart Maxwell MSP, member of the Scotland Bill Committee said:

“The Treasury have given no evidence for the 10p tax rate, no mechanism for calculating the reduction in the block grant, no final costs for implementing this bill and no confirmation that the UK Government will let the Scottish Parliament have the final say.

“Despite this Scotland is expected to pass a bill that would allow the Treasury to introduce this damaging tax plan at a time of their choosing whilst Scotland picks up the cost.  The Scottish Parliament should not be expected to sign up to this potentially damaging proposal without the full details and agreement over the mechanics.

“The sensible solution for the UK Government and Scottish Parliament is to ensure that the Treasury cannot implement this tax without the explicit approval of the Scottish Parliament.”

The Tory Minister’s appearance coincided with calls from respected economists Professors Andrew Hughes Hallett and Drew Scott who again argued for corporation tax to be devolved to Holyrood saying the move would enable Holyrood ministers to address underlying weaknesses in the Scottish economy.

The academics also claimed that the tax proposals contained in the Scotland Bill could lead to damaging cuts in Scotland’s public services.

Criticising opposition to the move they said: “The opposition to devolving corporation tax to the Scottish Parliament and government is, insofar as the economic evidence is concerned, very ill-informed,” and added “Critics seem prepared to ignore both the predictions from economic theory and the wide range of empirical evidence from the many other economies where corporation tax is already devolved.”

Others who gave evidence in support of more powers included Ben Thomson, chairman of the think-tank Reform Scotland, who told the committee that powers should be devolved and that parties should start planning on how to use them.

Martin Togneri, former chief executive of Scottish Development International, told MSPs there was strong evidence in support of the devolution of powers to smaller nations.

He said: “Smaller economic systems have a strong track record in increasing their competitiveness of inward investment”

The Scottish Government says that by having control over corporation tax and being able to reduce it from 23% to 20% they would be able to create an extra 27,000 jobs over 20 years.