Scotland Bill (Publication)

Tuesday 30th November 2010 Written Statements

[The Secretary of State for Scotland (Michael Moore)]

Today the Scotland Bill has been introduced in the UK Parliament. This Bill delivers the commitment in the coalition Government’s programme for government to strengthen and deepen the Scottish devolution settlement. Our proposals, based on the recommendations of the Commission on Scottish Devolution, will extend and develop the arrangements set out in the Scotland Act 1998, which established the first democratically elected Parliament for Scotland.

The Commission was set up by the Scottish Parliament and supported by the UK Government. The Commission’s remit was:

“To review the provisions of the Scotland Act 1998 in the light of experience and to recommend any changes to the present constitutional arrangements that would enable the Scottish Parliament to serve the people of Scotland better, improve the financial accountability of the Scottish Parliament, and continue to secure the position of Scotland within the United Kingdom”.

The Commission, under the chairmanship of Professor Sir Kenneth Caiman, produced a detailed report that was founded on a robust evidence base, sound analysis and extensive engagement with people in Scotland. The consensus arrived at by the Commission was clear: the devolution settlement in Scotland has been “a remarkable and substantial success”. The Commission’s key conclusion was that devolution has brought clear benefits for Scotland, ensuring that Scottish solutions can be developed for Scottish problems. The Scottish Parliament has established itself firmly in public life, bringing greater accountability to the people of Scotland, and innovation in both policy and working methods.

But crucially, the Commission also highlighted a number of areas for reform within the devolution settlement to ensure that it continues to deliver for people in Scotland. The key area of reform related to financial accountability. The Scotland Bill will ensure that from now on the Scottish Parliament and Government can be held to account not just for how they spend money, but also for how they raise it. This imbalance between power and responsibility within the existing Scotland Act will be addressed in the Bill introduced today.

The Scotland Bill creates a new Scottish rate of income tax. The current block grant funding from the UK Government to Scotland will be adjusted in exchange for power for the Scottish Parliament to raise its own taxes. This new tax-raising power will apply alongside the existing UK-wide income tax. In Scotland, the UK rates of income tax will be reduced by 10p from the lower, higher and top rates of income tax. The Scottish Parliament will then make a tax decision to levy a single additional rate, which can either match UK rates, or go higher, or lower. This will replace the Scottish Parliament’s existing power to vary income tax in Scotland by up to 3p, up or down.

In line with the Commission recommendations, the finance changes will be introduced carefully with transitional arrangements in place to ensure there is no windfall gain or adverse shock to the Scottish budget. This new tax-raising power will be in place for the Scottish Parliament elected in 2015. The Scotland Bill also devolves responsibility for two smaller taxes to the Scottish Government: stamp duty land tax and landfill tax. In addition, the Bill will provide the Scottish Government with a substantial power to borrow to finance capital expenditure and a power to borrow to finance current expenditure when tax receipts are less than expected.

The Scotland Bill also sets out a number of adjustments to the distribution of reserved and devolved responsibilities. The Scottish Parliament and Government will take on power to regulate air weapons, set the drink-drive limit and set national speed limits. The Commission, on the basis of the evidence, concluded that some areas would be better administered at the UK level and so in two areas—the regulation of health professions and the administration of corporate insolvency—the Scotland Bill will transfer power back to the UK Parliament and Ministers.

The Scotland Bill is just part of the Government’s response to the Commission’s recommendations. The Bill is accompanied by a Command Paper which sets out how the Government are responding to all the recommendations from the Commission, not only improving the legal framework that established devolution in Scotland, but also supporting the relationships between officials, Ministers and Parliaments to ensure its continuing success.

The Scotland Bill demonstrates the determination of the coalition Government to ensure that the Scottish Parliament is empowered to meet the needs of the Scottish people. Both the Bill and the accompanying Command Paper set out the bold reforms the Government are taking to strengthen the Scottish Parliament and the Scottish Government. Once the measures included in the Scotland Bill and this paper are fully implemented, a historic shift in power will have been accomplished. The Scottish Parliament and Scottish Ministers will have more powers, be more accountable, and be able to be more responsive to Scotland’s needs within the framework of a strong and stable United Kingdom.

Copies of the Command Paper which accompanies the Bill have been placed in the Libraries of both Houses and the Vote Office.