Today the Government published its Scotland Bill. When this becomes law, a second and exciting phase in Scottish devolution will begin. We are strengthening Scotland’s future based on three principles: empowerment, accountability and stability.
This Bill starts its parliamentary process with the support of the Conservatives, Labour and the Liberal Democrats. Each of our parties - plus business and civil society - contributed to the Calman Commission, which drew up the blueprint for it. It is right that change of this sort should be built on a broad consensus. But now it is this government that is turning those principles into practice.
We believe in devolution. By nature, we are mistrustful of centralised government and welcoming of the flow of power from Westminster to our nation states, our communities and to individuals too. When the Scottish Constitutional Convention drafted the plan for a Scottish Parliament, we were at the table. When the referendum campaign was raging, we were on the streets campaigning. And in 1999, when the first democratically elected Scottish Parliament was elected, we joined the coalition government that heralded a new era of Scottish politics.And let's be clear: this plan is steeped in Liberal Democrat values.
But its centrepiece is the devolution of tax and borrowing powers. This is the greatest transfer of fiscal power from London since the creation of the UK. Today, the Scottish Parliament only has revenue powers over council tax and business rates and raises only 15% of its own revenue. The Scotland Bill transforms that. The most significant change we will make is to create a Scottish Income Tax. We'll do this by cutting 10 pence off every band of income tax. We will proportionately adjust the block grant that Scotland receives, and then allow the Scottish Parliament to reset the tax rates. We will also give the Parliament nearly £3 billion in borrowing powers.The Bill is diverse in content, and gives the Scottish Parliament a range of new powers: regulating air weapons; setting drink-drive limits; establishing a Scottish national speed limit.
This will empower the Scottish Parliament and Scottish Government to make tax and spend choices that will determine future revenues and help shape Scotland's future economy.
It will also make both more accountable to the Scottish people. It is an incomplete construct to have a Parliament that spends money but is responsible for raising little of it. By giving these tax powers to Holyrood, MSPs will have to answer to voters for the money that they spend. And by moving those spending decisions closer to Scottish society and to Scottish business, both will be better placed to influence the decisions that impact on their lives and livelihoods.
And for all their bluster, the SNP has no alternative. Their plans for full fiscal autonomy are a non-starter: light on detail, high on cost and fraught with risk. No industrialised country has ever gone down that road. This is independence masquerading as reform. It won’t wash.By empowering Holyrood, we are also ensuring its stability. Our plans will be phased to ensure no sudden shock or windfall to the Scottish budget. By giving the Parliament – which has been a success over the past decade – room to innovate safely, we will strengthen Scotland within the UK.
But for our party, the victory here is not a tactical one. It is principled one. We are working with others to devolve power from the centre to the communities that need it and know how to use it.
This is good for Scotland, and we should be proud of it.
Secretary of State for Scotland