The Treasury has speeded up access to £2.7bn worth of new borrowing powers for the Scottish government in an early concession to Alex Salmond's nationalist government.
Nick Clegg, the deputy prime minister, said allowing the Scottish government to use part of those borrowing powers in advance – helping it finance a new bridge over the Forth and a new hospital in Glasgow – was evidence of the respect agenda being pursued by the Westminster government.
But Clegg gave a clear indication that the UK government was lukewarm about Salmond's demands for the Scottish government to be given powers over corporation tax, which raises £2.8bn a year in Scotland, mirroring similar proposals already being investigated for Northern Ireland.
Speaking after meeting Salmond at the first minister's office in Edinburgh, Clegg said the UK government would study carefully the Scottish government proposals on corporation tax and excise duty but said it was already getting "very considerable" new powers on taxation and borrowing worth £12bn a year.
The full borrowing powers, to borrow £2.2bn for capital spending and £500m for revenue spending, would be in force by 2013. The Treasury would announce how much Salmond could borrow in advance shortly.
Clegg said: "The principle of further tax devolution is something we clearly believe in, otherwise we wouldn't be piloting legislation for the Scottish parliament, but there's a lot of questions [about corporation tax], and I asked the first minister a lot of questions about how would it be funded, how would it work, not least in the context of where we in the British government are bringing it down dramatically, by 5% over coming years.
"What business leaders are telling me is that they're not interested in a patchwork of different corporation taxes across the UK, but just low corporation tax, full stop, and that's exactly what we're concentrating on delivering in the coalition government."
Clegg gently distanced himself from controversial proposals by his Lib Dem cabinet colleague and Scottish secretary Michael Moore this week that the UK government would likely insist on a second referendum on independence, to allow Scottish voters a vote on the precise terms of independence.
Moore's proposal has been ridiculed by the Scottish government and Scottish Tories, and been played down by Willie Rennie, the Scottish Lib Dem leader.
Clegg said Moore "was giving a very fair and accurate description of the legal and constitutional position as it presently is.
"A lot of people in Scotland will be lost in the constitutional and legal detail, quite a lot of it arcane, because what they really want to know is not so much the vehicle for this or that decision, but what is the choice ... What most people are interested in is what's the question, what's the choice?"
After the meeting, Salmond said he was still hopeful that the UK government would add further powers to the Scotland bill, which currently gives Scotland power over income tax rates this autumn.
His ministers would publish much more detailed proposals about devolving corporation tax and excise duty, getting even greater borrowing powers, and taking control over the Crown Estate's marine and land holdings in Scotland and setting up a Scottish digital television channel over the next few months.
Salmond also confirmed he was open to proposals to ask two questions in the independence referendum. The question on independence would be clear and unambiguous but he could add a further option, offering much greater financial autonomy for Scotland but remaining within the UK.
"There's no question of us doing anything other than 'yes' or 'no' [on independence] but the question of us adding another proposition is still open," he said.
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Friday 10 June 2011
The Treasury has speeded up access to £2.7bn worth of new borrowing powers for the Scottish government in an early concession to Alex Salmond's nationalist government.
at 11:24 Friday 10 June 2011Labels: The Treasury has speeded up access to £2.7bn worth of new borrowing powers for the Scottish government in an early concession to Alex Salmond's nationalist government.
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