Queen’s Speech – CIH Scotland laments Scotland Bill’s ‘lack of clarity’
CIH Scotland has expressed its concerns over the inclusion of the Scotland Bill in yesterday’s Queen’s Speech.
Under the new plans, the Scottish Parliament is to receive new devolved powers to raise 40 per cent of taxes and decide about 60 per cent of public spending.
The proposed Scotland Bill will allow Holyrood to set thresholds and rates of income tax on earnings in Scotland and is set to give the Scottish Government new welfare powers worth £2.5 billion, enabling it to vary the frequency of Universal Credit payments in Scotland and providing power to set the rules over a range of benefits which affect carers, disabled people and the elderly. Control will also be given over programmes which help people find work.
A portion of VAT and the whole of Air Passenger Duty will also be under the parliament’s control while the Barnett Formula, which determines the money the devolved Scottish Government receives, will be reduced.
The Queen’s Speech explained: “To implement the Smith Commission, a new fiscal framework for Scotland will be negotiated alongside the Bill.
“This should ensure Scotland enjoys the benefits of economic decision making closer to home within a strong and secure UK system and shared UK currency.
“The Barnett formula would be retained but would account for a smaller share of the Scottish Parliament’s revenues because more than half of it would now be raised by tax decisions made at Holyrood.”
However, CIH Scotland warned that the bill could see the Scottish Government making decisions on welfare that it cannot financially undertake.
Ashley Campbell, policy and practice officer at CIH Scotland, said: “We welcome the prospect of extra flexibility to allow the benefit system to be tailored to local needs and to underpin wider political ambitions to increase equality and reduce poverty in Scotland.
“However, the draft clauses published in January have been the subject of much debate and interpretation across the housing sector, leading to questions about whether they actually reflect the intention of the Smith Commission and highlighting the lack of detail on how the clauses would work in practice.
“We have particular concerns about the devolution of powers relating to taxation and the lack of clarity on how the use of such powers would affect Scotland’s block grant. There is a risk that the Scottish Government could be left in a position where it has the power to make policy decisions on to welfare but lacks the financial capacity to be able act on these powers.
“We will not know if these issues have been addressed until the Bill has been published.”
Scottish secretary David Mundell said the legislative programme laid out in the speech “means positive change for people across Scotland”.
The Scotland Bill will be introduced shortly and will deliver the recommendations of the Smith Commission on further devolution.
Other measures affecting Scotland include a focus on energy security and support for the North Sea oil and gas sector and moves to tackle extremism and strengthen counter-terrorism. The legislative programme also includes measures on immigration controls and an EU Referendum.
The National Insurance Contributions Bill/ Finance Bill also includes a commitment to ensure there are no rises in income tax rates, VAT or National Insurance contributions for the next five years.
Mr Mundell said: “Scotland’s future is on a better footing thanks to the government’s ambitious programme with measures to create jobs and support working people at the heart of our plan.
“We are delivering quickly on further devolution by giving the Scottish Parliament wide-ranging new powers. That means Scotland will have a huge amount of flexibility to make its own decisions while keeping the many advantages of being part of the UK. The Scottish Government must now be clear on how it intends to use both these and its existing powers in the interests of Scotland.”