Scotland

No evidence for tax power plan, says Sir Kenneth Calman

Proposals to increase Scotland's tax-raising powers were not devised with any "magic formula", the man behind a major review of devolution has said.

Sir Kenneth Calman told MSPs there was no evidential basis behind a recommendation it should take charge of half the standard income tax rate.

He said the 10p figure was a simple one which would spark debate.

Sir Kenneth's 2009 report led to Westminster's Scotland Bill to deliver new financial powers to Scotland.

The main recommendation of what became known as the Calman Commission called for a new Scottish-set tax, which would still be collected by HMRC.

It said the Treasury could deduct 10p from standard and upper rates of income tax in Scotland, accompanied by a cut in the block grant Holyrood gets from the UK government.

Giving evidence to a special Scottish Parliament committee looking at the Scotland Bill, Sir Kenneth was asked why the rate was not set at another level.

He responded: "It was a relatively straightforward figure which allowed, rather than 7.5% or 7.5p or whatever it might be, which gave a significant drop in the block grant which the Scottish parliament would have to raise.

"That's why we chose it. There was no, I don't think, magic formula that said it had to be 10p."

SNP MSP Stewart Maxwell asked Sir Kenneth: "It doesn't seem to be there's any deep solid, evidential reason why it should be 10p as opposed to any other figure."

Sir Kenneth said: "What we were anxious to do was to find a figure which would allow reasonable amounts of the Scottish block grant to be replaced by income tax, and 10p is a good figure to choose.

"There's no evidential basis that it is better than 11.5p, that I know of."

The Scottish Parliament has always had the power to vary the standard rate of income tax - the so-called Tartan Tax - by 3p, but this has never been used.

The Scotland Bill, currently going trough Westminster, will devolve £12bn of new tax and borrowing powers under plans which will see Scotland control a third of its budget, the UK government has said.

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