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Scottish government renews call for extra powers on tax and welfare Scottish government renews call for extra powers on tax and welfare
(35 minutes later)
The Scottish government has again called for billions of pounds of extra tax and welfare powers as it opened up a fresh conflict with the Tories at Westminster. The Scottish government has again called for billions of pounds of extra tax and welfare powers as it opened up a fresh conflict with the Tories at Westminster. Detailed proposals were sent to UK ministers by John Swinney, the Scottish finance secretary and deputy first minister, asking for Holyrood to be handed control of about £8.5bn of national insurance, £3bn of corporation tax, the new universal credit welfare system and the minimum wage in Scotland.
Detailed proposals were sent to UK ministers by John Swinney, the Scottish finance secretary and deputy first minister, asking for Holyrood to be handed control of about £8.5bn of national insurance, £3bn of corporation tax, the new universal credit welfare system and the minimum wage in Scotland.
Swinney’s demands came a few hours before the House of Commons was due to debate proposals for the Scottish government to be given even greater powers to introduce almost complete financial freedom from the UK government, a scheme known as full fiscal autonomy.Swinney’s demands came a few hours before the House of Commons was due to debate proposals for the Scottish government to be given even greater powers to introduce almost complete financial freedom from the UK government, a scheme known as full fiscal autonomy.
The SNP are in utter chaos over their manifesto commitment to full fiscal autonomyThe SNP are in utter chaos over their manifesto commitment to full fiscal autonomy
“We have always said that the [UK government’s] recommendations did not go far enough and fall short of a coherent package of powers to help us grow the economy and lift people out of poverty,” Swinney said.“We have always said that the [UK government’s] recommendations did not go far enough and fall short of a coherent package of powers to help us grow the economy and lift people out of poverty,” Swinney said.
But the Scottish National party’s proposals for full fiscal autonomy, being tabled as an amendment to the Scotland bill, have already been rejected by the UK government. Speaking on Sunday, David Mundell, the Scotland secretary, described the SNP proposals as “full fiscal shambles” which could cost every family some £5000 a year in lost Treasury support. The Scottish National party’s proposals for full fiscal autonomy are being tabled as an amendment to the Scotland bill. The additional tax powers outlined by Swinney – powers closer to a package known as devolution max – have already been ruled out by the cross-party Smith commission on which the new Scotland bill was based. Speaking on Sunday, David Mundell, the Scotland secretary, described the SNP proposals as “full fiscal shambles” that could cost every family £5,000 a year in lost Treasury support.
The additional tax powers outlined by Swinney on Monday – powers closer to a package known as devolution max – have already been ruled out by the cross-party Smith commission on which the new Scotland bill was based. Labour and the Liberal Democrats said pursuing the two parallel sets of demands was a clear attempt by the SNP to “stoke division and grievance” after Stewart Hosie, the SNP deputy leader, suggested that their rejection could lead to further demands for a second independence referendum.
Labour and the Liberal Democrats said pursuing the two parallel sets of demands was a clear attempt by the SNP to “stoke division and grievance” after Stewart Hosie, the SNP deputy leader, suggested that rejecting them could increase demands for a second independence referendum. Ian Murray, the shadow Scottish secretary, accused the SNP of hypocrisy, saying it was pushing for full fiscal autonomy in the knowledge that it could not be implemented: the Institute for Fiscal Studies has forecast that it could increase Scotland’s current debts and deficits by £9.8bn by 2018-19. It would also lead to the scrapping of the Treasury system for subsidising Scottish public spending under the Barnett formula – a formula that Swinney wanted to keep under the parallel plans to control corporation tax, national insurance and capital gains tax.
Ian Murray, the shadow Scottish secretary, accused the SNP of hypocrisy, saying it was pushing for full fiscal autonomy in the knowledge it could not be implemented: the Institute for Fiscal Studies has forecast it could increase Scotland’s current debts and deficits by another £9.8bn by 2018-19. “The SNP are in utter chaos over their manifesto commitment to full fiscal autonomy. The SNP won’t vote for full fiscal autonomy, but say if it isn’t delivered, they’ll call another referendum. People aren’t daft; they can see what the SNP are up to,” Murray said. “We should spend our time making the Scotland bill as good as it can be, not playing to the gallery.”
It would also lead to the scrapping of the Treasury system for subsidising Scottish public spending under the Barnett formula – a formula which Swinney in fact wanted to keep under the parallel plans to control corporation tax, national insurance and capital gains tax. Swinney’s 16-page set of proposals to the UK government said the new powers being pursued by UK ministers under the Scotland bill would only increase Holyrood’s tax powers to about 36% of Holyrood’s expenditure and 29% of overall tax receipts in Scotland. “These clearly fall far short of ‘home rule’, as over 70% of tax receipts remain in the control of Westminster,” the document says.
“The SNP are in utter chaos over their manifesto commitment to full fiscal autonomy. The SNP won’t vote for full fiscal autonomy but say if it isn’t delivered they’ll call another referendum. People aren’t daft; they can see what the SNP are up to,” Murray said. Giving Holyrood greater freedom over the welfare system, particularly on unemployment benefits and in-work tax credits, and the minimum wage, would allow Scotland to introduce more flexible and generous payments, he said. “There is also a real advantage to devolving working-age and child benefits, as it would allow us to design a better, more coherent system that fits with existing Scottish services and our radical approach to preventative spending and early intervention.”
“We should spend our time making the Scotland bill as good as it can be, not playing to the gallery.”
Swinney’s 16-page set of proposals to the UK government said the new powers being pursued by UK ministers under the Scotland bill would only increase Holyrood’s tax powers to about 36% of Holyrood’s expenditure and 29% of overall tax receipts in Scotland.
“These clearly fall far short of ‘home rule’ as over 70% of tax receipts remain in the control of Westminster,” Swinney’s document says.
Giving Holyrood greater freedom over the welfare system, particularly on unemployment benefits and in-work tax credits, and the minimum wage, would allow Scotland to introduce more flexible and generous payments, he said.
“There is also a real advantage to devolving working age and child benefits as it would allow us to design a better, more coherent system that fits with existing Scottish services and our radical approach to preventative spending and early intervention,” Swinney said.
Related: Blow to aim of Scotland fiscal autonomy as North Sea oil tax forecast slashedRelated: Blow to aim of Scotland fiscal autonomy as North Sea oil tax forecast slashed
The SNP is pressing hard for far greater powers after winning a dramatic landslide in the general election, taking 56 of Scotland’s 59 seats in the House of Commons.The SNP is pressing hard for far greater powers after winning a dramatic landslide in the general election, taking 56 of Scotland’s 59 seats in the House of Commons.
Swinney’s document does not, however, set out how much money the package of new tax and welfare powers would be worth, how much borrowing would be needed to fund its new policies, or how and when they would be implemented. Swinney’s document does not, however, set out how much money the package of new tax and welfare powers would be worth, how much borrowing would be needed to fund its new policies, or how and when they would be implemented. It noticeably does not include taxes raised by North Sea oil and gas – the industry the SNP has repeatedly said ought to be controlled by Scotland. North Sea tax revenues have collapsed after world oil prices plummeted late last year, and the Office for Budget Responsibility has now forecast that they will earn only £100m a year from 2021 onwards, a fraction of their £12bn-a-year peak.
It noticeably does not include taxes raised by North Sea oil and gas – the industry the SNP has repeatedly said ought to be controlled by Scotland. North Sea tax revenues have collapsed after world oil prices plummeted late last year, and the Office for Budget Responsibility has now forecast they will earn only £100m a year from 2021 onwards – a fraction of their £12bn-a-year peak.
The Commons library has calculated that national insurance in Scotland is worth £8.5bn, onshore corporation tax (excluding the North Sea) is worth £2.9bn, while capital gains tax is likely to raise a few hundred million pounds.The Commons library has calculated that national insurance in Scotland is worth £8.5bn, onshore corporation tax (excluding the North Sea) is worth £2.9bn, while capital gains tax is likely to raise a few hundred million pounds.