Holyrood should be stripped of its power to impose national council tax freeze, say Lib Dems

THE Scottish Government would lose its power to effectively impose a council tax freeze across the country, under a blueprint for a federal UK unveiled yesterday by former Liberal Democrat leader Sir Menzies Campbell.

• Lessening of Scottish Government control over council tax key to Lib Dem findings

• Liberals want to see Home Rule Commission findings implemented in case of ‘No’ vote in 2014 independence referendum

• Commission recommends scrapping of Act of Union 1707 and replaced by a federal union

• Scottish Parliament should raise two thirds of the money it spends, according to Commission

The SNP has held councils to the freeze since coming to power in 2007, by threatening to withhold a £70 million funding pot if authorities didn’t hold their rates.

The Lib Dems released the findings of their Home Rule Commission yesterday, which they want to see adopted if Scots reject independence in 2014. It says councils should be free to set their own local tax rates – with new laws passed preventing the government in Edinburgh from linking this with any funding they give local authorities.

“Councillors should have responsibility for the decisions that affect their communities,” the report states.

The current funding set-up often “confuses questions of local accountability”, it adds.

The commission report also proposes that the historic Act of Union between Scotland and England should be scrapped and replaced by a declaration of federal union.

Scotland would also raise about two-thirds of the money it spends, under the plans.

Defence, foreign affairs and welfare would remain with a federal UK government.

Sir Menzies said: “I don’t believe the present settlement is sustainable [with] greater powers in Wales, greater powers in Northern Ireland and England beginning to take the view that some greater control over English affairs is appropriate as well. We need a settlement which will deal with all of these aspirations.

“There’s no doubt that the present arrangements are not sustainable. Federalism is the answer to many of the anxieties which people have.”

Asked why he did not favour allowing the Scottish Parliament to raise all the money it spends, while remaining in the UK, he said: “That’s fiscal autonomy rather than fiscal federalism. Fiscal federalism is what we believe is in the best interests of Scotland.

“If you believe, as I do, that Scotland is better off having a much greater degree of responsibility for its own affairs, but remaining within the UK, then our proposals represent a very substantial contribution to that debate.”