The Scottish government has claimed that the change in powers proposed by the UK government’s Scotland Bill will be harmful to Scotland’s budget and economic growth.
Speaking at the Reform Scotland conference on Monday, External Affairs Minister Fiona Hyslop said that whilst the Bill had useful parts it still needed improving if it was to bring about the extra powers that were needed in order to sustain economic growth.
The SNP Minister argued that an ambitious Scotland requires an improved Bill that provides a proper set of financial powers.
Ms Hyslop said:
“The Scottish Government believes that the Scottish Parliament needs the powers which help deliver sustainable economic growth.
“As it stands, the Scotland Bill has useful parts to it, but also currently contains provisions which would be harmful to Scotland’s budget and the opportunity for economic growth.
“That is why it is important that the process of scrutiny leads to a Scotland Bill which is strengthened and improved.
“Today, we have published a robust analysis and information demonstrating that the deflationary bias built into the Bill’s income tax proposals would have short-changed Scotland to the tune of almost £8 billion since 1999.
“The effect of such a shortfall would be a real and damaging impact on Scotland’s public services, on jobs and on our economy.”
Ms Hyslop welcomed the inclusion of borrowing powers but criticised the delay which would mean they could not be used until 2015.
Ms Hyslop added:
“We certainly welcome the proposed introduction of borrowing powers for the Scottish Parliament. Unfortunately, this facility would not be implemented until 2013 at the earliest, with full implementation in 2015, preventing Scotland from being able to plug the 36 per cent real terms cut to our capital budget over the next four years.
“I raised the limitations of borrowing in the Scotland Bill during the British-Irish Council’s discussion on the economy on Monday in the Isle of Man. Having raised the issue with the Deputy Prime Minister at the meeting I will be writing to him to follow up on that point.
“In last week’s debate in the Scottish Parliament, there was cross-party consensus on the need for thorough scrutiny of the financial proposals in the Scotland Bill.”
The Scotland Bill is the result of recommendations put forward by the Calman Commission, a body that was created by the three Unionist parties at Holyrood following the SNP’s 2007 election victory. The commission made several recommendations facilitated to consolidate Scotland’s position in the Union and rejected full fiscal autonomy saying that it was “incompatible” with the Union.
However a leading Professor of Economics, Andrew Hughes Hallett, has described the Calman recommendations as ‘unworkable and potentially damaging’. Professor Hallett also pointed out that Scotland would be £billions better off with fiscal autonomy and that Scotland had been subsidising London for many years.
A group of leading Scottish businesspeople recently called for more powers to be included in the Bill, however Lib Dem Secretary of State for Scotland Michael Moore has stated that the Tory/Lib Dem coalition have “no intention” of increasing the proposed powers.
The Scotland Bill will be scrutinised by a Holyrood committee to be chaired by former Labour group leader Wendy Alexander.