Scotland politics

Queen's Speech 2015: Scotland to control 40% of tax and 60% of public spending

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Media captionThe Queen delivered her speech in the House of Lords

The Scottish Parliament will receive new powers to raise 40% of taxes and decide about 60% of public spending, the Queen's Speech has confirmed.

The Scotland Bill will allow Holyrood to set the thresholds and rates of income tax.

A portion of VAT and the whole of Air Passenger Duty will also be under the Edinburgh parliament's control.

The Barnett Formula, which determines the money the devolved Scottish government receives, will be reduced.

The UK government said the new Scotland Bill would embody the Smith Commission agreement which was signed by the SNP, the Conservatives, Labour, the Liberal Democrats and the Scottish Greens in November last year.

The promise of more powers to Holyrood followed voters rejecting Scottish independence by 55% to 45% in September's referendum.

The key elements of the Scotland Bill include:

  • allowing Holyrood to set thresholds and rates of income tax on earnings in Scotland and keeping all the money raised in Scotland
  • giving the Edinburgh parliament control over the first 10 percentage points of standard rate VAT revenue raised in Scotland [and 2.5% reduced rate]
  • new welfare powers worth £2.5bn
  • enabling the Scottish government to vary the frequency of Universal Credit payments in Scotland
  • providing power to set the rules over a range of benefits which affect carers, disabled people and the elderly
  • and giving control over programmes which help people find work.

Before the Queen's Speech, SNP leader and Scotland's First Minister Nicola Sturgeon said she wanted the Scotland Bill to go much further than the Smith proposals.

She had been keen to see Holyrood given full control over National Insurance; the minimum wage; Corporation Tax; full control of welfare and employment and trade union law.

However, the Bill does not contain any of those demands.

What next for Scotland?

Image copyright PA

A new Scotland Bill will be based on recommendations made by the Smith Commission - the cross-party group formed after the independence referendum to look at what additional powers might be handed to Scotland.

But how were its foundations laid? Find out more...

In the Queen's Speech debate, the prime minister said he wanted to modernise and strengthen "our United Kingdom".

He told the House of Commons: "It [the Queen's Speech] includes bills on devolution for Scotland, Wales and Northern Ireland. These Bills will deliver on all of the promises given to people in each of the countries in our United Kingdom and will also ensure fairness for English voters."

In her address to peers and MPs, the Queen outlined that changes would be made to the rules of the House of Commons, which would ensure that only MPs representing English constituencies could vote on legislation affecting England alone.

And in a direct message to the SNP benches, Mr Cameron said: "If you want more taxes, more spending and more borrowing you can now introduce those measures in Scotland. It is time for you to stop talking and start acting."

He added that he was clear about what "full fiscal autonomy" would mean for Scotland: "Raising 100% of what you spend means asking Scottish people to pay almost an extra £10bn in taxes or make an almost extra £10bn in additional cuts by the end of this parliament. That is £5,000 of higher taxes or additional cuts for every single family in Scotland. That is the true price of the SNP."

Image caption In a message to the SNP, David Cameron said "stop talking and start acting"
Image caption The SNP's Angus Robertson said his party would stand firm against the "relentless drive of Tory austerity"
Image caption Acting Labour leader Harriet Harman warned Mr Cameron against pitting the English against the Scottish

The SNP's Westminster leader Angus Robertson responded to the prime minister's address by saying that his party would stand firm against the "relentless drive of Tory austerity".

He added: "Scotland did not vote for these cuts and we will work with others across parliament to prevent them.

"With Labour all over the place and each of their leadership candidates seemingly getting ready to race even further to the right, the SNP is the only real opposition to unfair Tory cuts in the House of Commons.

"At the general election, people in Scotland gave the SNP an unprecedented democratic mandate to put an end to the cuts agenda which is hurting people across our communities - and we will use this mandate to work with other progressive forces in parliament in Scotland's best interests."

On the government's devolution plans, acting Labour leader Harriet Harman warned Mr Cameron against pitting the English against the Scottish as she said he "shamefully" did in the general election campaign.

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Media captionMr Bercow told SNP members not to clap

She added: "To get change which is fair and lasting, it must be done in a way which builds the broadest possible consensus.

"The prime minister must seek agreement and he must break his habit of divisiveness.

"Of course the SNP want to break up the union, they want people to have to choose between being Scottish and being British, but it would be utterly irresponsible to continue what he did so shamefully in the general election which was to set the English against the Scottish.

"No party, especially one that claims to be 'One Nation', should set the interests of a family in Gloucester against the interests of a family in Glasgow or Glamorgan."

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