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Scotland Bill: UK government to reject SNP's full fiscal autonomy plan Scottish devolution: SNP sends more powers letter to UK minister
(about 4 hours later)
The UK government has confirmed it will reject SNP proposals to give Scotland the ability to introduce full fiscal autonomy (FFA). The SNP has sent a letter to the UK's Scottish Secretary David Mundell calling for more powers to be included in the Scotland Bill.
Scottish Deputy First Minster John Swinney said FFA was the best route to fulfilling Scotland's potential. It wants Holyrood to have control of corporation tax, capital gains tax, the minimum wage and National Insurance.
His SNP party has tabled an amendment to the Scotland Bill which would see FFA implemented at a time of Holyrood's choosing. The demand comes as the Scotland Bill, which will give greater tax raising powers to MSPs, is scrutinised by MPs.
But Scottish Secretary David Mundell said the government would reject it. The UK government has already confirmed it would reject an SNP amendment to introduce full fiscal autonomy.
He claimed FFA would cost every family in Scotland £5,000 and described the plan as a "full fiscal shambles". Despite the fresh legislation promising that the Scottish Parliament will have control over 40% of tax and 60% of borrowing, the current SNP administration says that does not go far enough.
However, Mr Swinney told BBC Radio Scotland's Good Morning Scotland programme: "We don't know when full fiscal autonomy would be implemented or the detail of what the financial arrangement would be so I reject the £5,000 figure." A letter from the SNP's Deputy First Minister John Swinney to Mr Mundell formally called for more powers, including;
Mr Swinney also believed that full fiscal autonomy (FFA) was the best route to fulfilling Scotland's potential.
His party has tabled an amendment to the Scotland Bill which would see FFA implemented at a time of Holyrood's choosing.
'Full fiscal shambles'
But Conservative minister Mr Mundell said the government would reject it claiming that move would cost every family in Scotland £5,000 and described the plan as a "full fiscal shambles".
The first day of the committee stage of the Bill begins on Monday afternoon from the floor of the House of Commons when MPs will scrutinise the legislation line by line.The first day of the committee stage of the Bill begins on Monday afternoon from the floor of the House of Commons when MPs will scrutinise the legislation line by line.
Welfare payments The Scotland Bill would give the Scottish Parliament new powers including;
The Scotland Bill will give the Scottish Parliament new powers including control over income tax rates and bands, a proportion of the VAT raised in Scotland and air passenger duty.
It would also allow Holyrood to create new benefits in devolved areas and to make discretionary welfare payments.It would also allow Holyrood to create new benefits in devolved areas and to make discretionary welfare payments.
Its supporters have said it will bring into law many of the new powers agreed by the all-party Smith Commission and make the Scottish Parliament one of the most powerful devolved parliaments in the world.
But the Scottish government has argued it does not go far enough.
The SNP amendment to the Scotland Bill would give the Scottish Parliament the legislative competence to remove the reservation on taxation, borrowing and public expenditure, allowing it to legislate to deliver FFA in the future.
What is full fiscal autonomy (FFA)?What is full fiscal autonomy (FFA)?
Holyrood would have control over all of taxation in Scotland, including oil and gas revenues.Holyrood would have control over all of taxation in Scotland, including oil and gas revenues.
It would pay Whitehall a portion of the takings for defence, the Foreign Office, the Treasury and shared regulators such as Ofcom and Ofgem.It would pay Whitehall a portion of the takings for defence, the Foreign Office, the Treasury and shared regulators such as Ofcom and Ofgem.
Those in favour say it would provide real power to grow the economy faster.Those in favour say it would provide real power to grow the economy faster.
Those against say it would leave a large gap in the nation's finances - a £7.6bn shortfall in the next financial year, over and above a share of the deficit that the UK is already running.Those against say it would leave a large gap in the nation's finances - a £7.6bn shortfall in the next financial year, over and above a share of the deficit that the UK is already running.
To find out more read Douglas Fraser's FFA explainer written during the election campaign.To find out more read Douglas Fraser's FFA explainer written during the election campaign.
The Scotland Bill was the first government bill to be introduced after the general election, and is now the first to reach the committee stage, with MPs to begin line-by-line scrutiny of it in the House of Commons on Monday.The Scotland Bill was the first government bill to be introduced after the general election, and is now the first to reach the committee stage, with MPs to begin line-by-line scrutiny of it in the House of Commons on Monday.
Mr Mundell said: "The prime minister has made it clear that the government will carefully consider any changes to the bill that are sensible.Mr Mundell said: "The prime minister has made it clear that the government will carefully consider any changes to the bill that are sensible.
"An amendment that kills off the Barnett formula and ends the sharing of resources across the UK is about as far away from sensible as one can get. It would be a full fiscal shambles that would cost every family in Scotland around £5,000."An amendment that kills off the Barnett formula and ends the sharing of resources across the UK is about as far away from sensible as one can get. It would be a full fiscal shambles that would cost every family in Scotland around £5,000.
"The government will not accept amendments that are not good for Scotland. The Institute for Fiscal Studies has estimated that fiscal autonomy would mean Scotland having almost £10bn less to spend by the last year of this parliament.""The government will not accept amendments that are not good for Scotland. The Institute for Fiscal Studies has estimated that fiscal autonomy would mean Scotland having almost £10bn less to spend by the last year of this parliament."
With fiscal autonomy likely to be off the table, Mr Swinney has said the SNP would focus on securing more powers beyond those recommended by the Smith Commission.
These would include the devolution of business taxes, employment law, minimum wage, further welfare power and equality law.
On Sunday the SNP's deputy leader, Stewart Hosie, did not rule out his party supporting a separate amendment to the Scotland Bill proposed by Conservative backbencher Sir Edward Leigh, who has called for Scotland to be given full fiscal autonomy immediately.
Ahead of the House of Commons scrutiny of the Bill, Mr Swinney said: "The Prime Minister said he would 'govern on the basis of respect'.Ahead of the House of Commons scrutiny of the Bill, Mr Swinney said: "The Prime Minister said he would 'govern on the basis of respect'.
"He has to respect the outcome of the election in Scotland where 50% of those who vote, chose a party committed to fiscal autonomy and substantially greater powers than conceived of in the Smith Commission.""He has to respect the outcome of the election in Scotland where 50% of those who vote, chose a party committed to fiscal autonomy and substantially greater powers than conceived of in the Smith Commission."
Scotland's finance secretary explained that if given the correct powers, the Scottish government would introduce business tax credits for research and development to "support innovation within Scotland".Scotland's finance secretary explained that if given the correct powers, the Scottish government would introduce business tax credits for research and development to "support innovation within Scotland".
He added that that would also involve a reduction in corporation tax and National Insurance for companies that were taking forward particular innovations that were "strengthening the research and development base of Scotland".He added that that would also involve a reduction in corporation tax and National Insurance for companies that were taking forward particular innovations that were "strengthening the research and development base of Scotland".
'Utterly confused''Utterly confused'
Labour's only MP in Scotland, Ian Murray, said he was "very clear" that his party would not support Sir Edward's amendment "because it would be a disaster for Scotland's finances". Labour's only MP in Scotland, Ian Murray, said the Office for Budget Responsibility (OBR) "blew a further hole in the SNP's plans" when it cut its forecast for oil revenues in the next 20 years by £34.5bn to just £2.1bn in total.
He claimed the Office for Budget Responsibility (OBR) "blew a further hole in the SNP's plans" when it cut its forecast for oil revenues in the next 20 years by £34.5bn to just £2.1bn in total.
Mr Murray added: "The SNP were once all for full fiscal autonomy, then they weren't so keen and now they say they want it but just not for a wee while yet.Mr Murray added: "The SNP were once all for full fiscal autonomy, then they weren't so keen and now they say they want it but just not for a wee while yet.
"It's an utterly confused position. It's now make your mind up time for the SNP on whether they really want to deliver their manifesto commitment to full fiscal autonomy.""It's an utterly confused position. It's now make your mind up time for the SNP on whether they really want to deliver their manifesto commitment to full fiscal autonomy."
Labour has tabled its own amendments to the Scotland Bill which would prevent any UK-wide election or EU referendum being held on the same day as the Scottish Parliament elections.Labour has tabled its own amendments to the Scotland Bill which would prevent any UK-wide election or EU referendum being held on the same day as the Scottish Parliament elections.
The amendments would also see the establishment of a Constitutional Convention to examine greater devolution to all parts of the UK.The amendments would also see the establishment of a Constitutional Convention to examine greater devolution to all parts of the UK.