Treasury attacks SNP over bill’s slow progress

Powers already in the Scotland Bill going through Holyrood will see income tax cut in Scotland by 10p, before being raised back up to the level required by MSPs in line with need.

“The UK government has some concerns about the Scottish Government’s ability to implement the powers already in the bill,” the Treasury said in a statement yesterday. “It has been nearly a year since the bill was introduced and the Scottish Government has made little progress. Raising taxes is complex and difficult.

“The Scottish Government should already be thinking about implementation and operation, especially for the fully devolved taxes. Instead, Scottish ministers are focusing their energies on asking for additional powers.”

The SNP has warned that the tax overhaul would damage Scotland financially and see a massive fall in the country’s revenues. A spokesman for First Minister Alex Salmond yesterday hit out at Westminster’s own record.

“The lack of basic detail from the UK government about the income tax measures – the central financial aspect of the Scotland Bill – is extraordinary,” he said.

“It is in stark contrast to the volume of information the Scottish Government has provided about the benefits of devolving corporation tax, which, as things stand, is not even in the Scotland Bill.”

The Scottish Government wants control over corporation tax and excise duties added to the Scotland Bill. But the absence of any “robust analysis” behind these requests was criticised by the Treasury yesterday.

“The Scottish Government has not provided sufficiently detailed proposals behind its additional requests, nor have Scottish ministers shown evidence of having considered the proposals’ impact on the rest of the UK,” the Treasury said.

MSPs on the Scotland Bill committee will hear from expert witnesses, including professors Andrew Hughes Hallett and Drew Scott, as well as Jim McColl, who recently sold Clyde Union Pumps for £750 million. They all back the devolution of corporation tax to Scotland as a means of boosting economic activity.

In their written evidence, the professors said: “The opposition to devolving corporation tax to the Scottish Parliament and government is, insofar as the economic evidence is concerned, very ill-informed.

“Critics seem prepared to ignore both the predictions from economic theory and the wide range of empirical evidence from the many other economies where corporation tax is already devolved.”

They also say the funding mechanism proposed to devolve income tax could force a future Scottish Government to implement “unexpected and damaging public spending cuts”, while the proposals had not been subject to any “rigorous analysis” by the UK government.

The professors’ visits to Holyrood follow their attendance at a previous session in January, when Prof Scott clashed with former committee convener and Labour MSP Wendy Alexander and threatened to walk out.

Mr Salmond’s spokesman said: “Calling for the devolution of corporation tax was in the SNP manifesto and, therefore, we have a strong mandate to achieve it – the people have spoken.”

Meanwhile, Mr Gauke, Chief Secretary to the Treasury Danny Alexander and Secretary of State for Scotland Michael Moore will attend the first meeting of the Joint Exchequer Committee this morning.

This will be the first stage in implementing the powers in the Scotland Bill and its associated package of measures. The key priority will be to agree the principles for the final adjustment to Scotland’s block grant from the Treasury. This will be cut when MSPs are handed responsibility for the 10p tax power. Mr Alexander said yesterday: “The UK government is committed to moving forward with implementation of the Scotland Bill constructively and transparently.

“The adjustment to the block grant is a cornerstone of the package of powers in the Scotland Bill and will give the Scottish Government both fiscal responsibility and accountability for the tax decisions they take. As part of the implementation process, I will propose principles for the block grant adjustment, many of which are based on recommendations previously endorsed by the Scottish Parliament.”