The UK coalition government has introduced the Scotland Bill that implements most of the Calman Commission recommendations on extending the powers of the Scottish Parliament.
The Bill will give new powers to allow the Scottish Parliament to set a new Scottish income tax from 2015, plus borrowing powers, worth £2.7bn, are to be devolved. Parliament will gain control over speed limit and drink-drive laws and control of air guns. There will also be Increased powers to run Holyrood elections.
The new legislative powers are welcome although much less than UNISON argued for in our evidence to the Calman Commission. There remain a number of anomalies in the Scotland Act such as the Council Tax being devolved but Council Tax Benefit remaining reserved that the new Bill should have addressed. The principle of subsidiarity should apply to all powers that remain reserved to the UK Parliament.
The big transfer of powers in this Bill is the tax raising provisions. It is of course right that the Scottish Parliament should be responsible for raising revenue as well as spending it. The 10p provisions are in principle right, although there are significant risks in devolving a variable yield tax without other revenue raising powers. The transitional provisions will be very important in this regard.
The new borrowing powers are also important. It is very disappointing that these are to be devolved so slowly. It is entirely illogical that local government in Scotland can have prudential borrowing powers but that the Parliament itself does not. Borrowing powers would mean that the Scottish Parliament would have much greater scope in planning and funding efficient investment in Scottish public services. This would avoid having to rely on the discredited PFI methods which have been expensively used in the past and are now to be reinvented by the Scottish Government. The Bill also places limitations on the new powers and doesn't allow the Scottish Government to issue bonds. Something I believe would be particular appropriate for Scottish Water.
Overall, whilst the Scotland Bill is to be welcomed, it is something of a missed opportunity. The product of a political compromise, when something more radical was required.