War of words breaks out over extra devolution

Income tax, VAT, Air Passenger Duty and welfare are all set to be partly devolved to the Scottish Government

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Ministers in Edinburgh and London became embroiled in an angry war of words this morning just as soon as the draft legislation on extra devolution for Holyrood was published.

Scotland’s First Minister Nicola Sturgeon claimed the UK Government’s plans represented a “significant watering down” of the promise made to Scots by the UK parties.

Ms Sturgeon argued that, under the plans unveiled by UK ministers, the Westminster Government would still retain a veto over key aspects of Scottish policy, including tax and welfare.

But Alistair Carmichael, the Scottish Secretary, hit back, telling Ms Sturgeon she was “wrong” and denying that UK ministers would have a veto over Scottish Government policy.

He said any disputes would be settled by arbitration, not veto and he called on the SNP to stop “kicking up dust” over more devolution and actually explain how they would use the new powers to help Scots.

The row overshadowed the launch of what was supposed to be the latest step in what UK ministers have claimed is one of the biggest transfers of power to any devolved legislature anywhere in the world.

The blueprint for more powers, published today, outlines the transfer of responsibilities from Westminster to Holyrood, how those responsibilities are going to be handed over and how both administrations – north and south of the border – will work once the changes have taken effect.

Among the changes announced by the UK Government, were:

The constitution: the Scottish Parliament will be entrenched in law as a permanent institution and it will have control over its own elections, the number of MSPs elected and the franchise – which is to be lowered to 16.

Income tax: the Scottish Parliament will get power over income tax rates and thresholds. The rate of the personal allowance and the taxation of savings and dividend income will remain reserved to Westminster.

VAT: the Scottish Parliament will be assigned the revenue raised in Scotland by the first ten points of VAT.

Air Passenger Duty: the Scottish Parliament will get control over air passenger duty in Scotland, which will allow Scottish minister to reduce APD for passengers flying from Scottish airports, if they so wish.

Welfare: for the first time, limited aspects of welfare are to be devolved to Scotland, this will allow Scottish ministers to change or abolish the so-called bedroom tax and alter other payments round the edges, but not change the overall welfare policy.

Benefits: the Scottish Parliament will be given control over carers’ benefits, attendance allowance, benefits for the disabled, industrial injuries allowance as well as cold-weather payments.

The BBC: the Scottish Government will be given a formal, consultative role over the BBC’s Charter and Scottish Parliament committees will be able to question BBC executives about BBC matters in Scotland.

The Crown Estate: all the money raised by the Crown Estate in Scotland will be transferred to the Scottish Parliament.

Consumer issues: the Scottish Parliament will have the ability to legislate against payday loan shops and against fixed-odds betting terminals.

Transport: public sector bodies in Scotland will be able to bid for rail franchises in Scotland, the Scottish Parliament will be given almost complete control over road speed limits and road signs.

Fracking: the Scottish Parliament is to get control over onshore oil and gas extraction in Scotland.

Scottish First Minister Alex Salmond, front center, meets with Scots and other European citizens to celebrate European citizenship and "Scotland's continued EU membership with a Yes vote" at Parliament Square in Edinburgh, Scotland.

Mr Carmichael insisted this morning that the package of measures unveiled by the UK Government represented the full implementation of the Smith Commission’s proposals for extra devolution for Scotland.

“It is Home Rule,” he declared. “It is a long-standing liberal vision, it has been a long road but we are on the home straight and today we can see that it is within our grasp.”

Mr Carmichael said he expected the Bill to implement the changes to be put before Westminster shortly after the General Election this year, with every chance that it could be on the statute books within a year.

The powers themselves may take a little longer to implement but ministers expect them to be under the control of the Scottish Parliament between 2016 and 2018.

Ms Sturgeon, however, was dismissive of the UK Government’s blueprint, particularly over the UK ministerial “veto” which, she claimed, had been included in the plans.

She said: “Too much of what the Prime Minister has set out imposes restrictions on the recommended devolved powers and would hand a veto to UK ministers in key areas.

“For example, the proposals on welfare do not allow us to vary Universal Credit without the permission of the UK Government. That means – under the current proposals – we will not have the independence to take action to abolish the bedroom tax.”

And she added: “In these crucial areas the clauses set out today appear to be a significant watering down of what was promised by the Smith Commission and need an urgent rethink by the UK Government.”

But Mr Carmichael retorted: “It would be refreshing that if, rather than kicking up dust like this, the Nationalists told us what they would do with the powers of the third most powerful devolved institution in the world.”