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Commons green-lights Scotland Bill

28 January 2011

New devolved powers for the Scottish Parliament have moved one step closer to becoming law, having been approved by the Commons and passed to the detailed committee stage. If passed, the Scotland Bill would give Scotland far-reaching new fiscal freedom, including the ability to vary its own tax rates and even borrow, in exchange for a reduction in its block grant. Scottish Secretary Michael Moore described it as the most significant transfer of fiscal powers from central Government since the creation of the Union.

He said: "The Scotland Bill addresses that imbalance by providing a package of taxation and borrowing powers that will see the Scottish Parliament become accountable for over a third of the money it spends. It is a radical but responsible step."

The Bill has also drawn criticism from the SNP, which argued it was not sufficiently far-reaching to “meet the ambitions of the Scottish Government for the people of Scotland,” though a motion to this effect was comprehensively defeated.

It would cut 10p off the basic higher 50p rate for Scottish taxpayers, with a proportional reduction in the block grant, and allow Holyrood to set tax at any level above that baseline. The bill would also provide £2.2bn capital borrowing power, to fund major infrastructure projects, for example.

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