Scotland wins further powers as Scotland Bill is passed

The Scottish Parliament voted unanimously to give parliamentary consent for the UK Government’s ‘Scotland Bill’ last week, which stands to enact “the largest transfer of fiscal power from London since the creation of the United Kingdom”.

The bill aims to fulfil the Calman Commission’s 2009 recommendations for Scottish Devolution, and is set to give Scotland its own borrowing powers, greater control over income tax and a number of new devolved powers in areas such as misuse of drugs and national speed limits.

Some powers will be returned to Westminster under the bill, although the decision to re-reserve the regulation of health professionals to the UK government was abandoned and will remain a devolved matter.

The SNP government initially criticized what they called a “botched” bill, claiming “it would have left Scotland £8 billion worse off had it been implemented in the last decade”.

However, despite the rejection of several of their demands for amendments, the SNP changed tack to allow parliamentary consent for the bill, which will now be considered one final time by the two houses at Westminster on 24 April, before passing into law.

The new fiscal powers will mean that the Scottish Parliament will move from raising approximately 15 per cent of its own budget to approximately 35 per cent, which the Scotland Office, the UK government department that liaises with the Scottish Parliament, says will increase the Scottish Parliament’s accountability to the Scottish people.

The existing rates of income tax in Scotland will be reduced by 10p in the pound across the board, allowing the Scottish Parliament to set its own additional rate and giving it greater control over its spending.

The new borrowing powers will make it possible for the Scottish Parliament to borrow to finance capital expenditure and current expenditure when receipts from taxation are less than expected.

However the ‘block grant’ of £30 billion from Westminster will be reduced to compensate for the increased taxation and borrowing capabilities, and Her Majesty’s Revenues and Customs will still administer the taxes levied.

While the bill may go into law as soon as next week, many of the changes it entails will be phased-in over time, with the Scottish government elected in 2015 being the first allowed to make major decisions about taxation in Scotland.

Meanwhile, the SNP government intend to hold a referendum on Scottish independence as early as the autumn of 2014, which could see the implementation of the bill being overtaken by more significant events.