New Scottish powers bill published

22 January 2015 Last updated at 11:30

Proposed legislation to give new powers to the Scottish Parliament has been published by the UK government.

The plans to devolve financial, tax and other powers were set out after the "No" vote in September's independence referendum.

Prime Minister David Cameron said Westminster ministers had kept their promise to strengthen Holyrood.

Scottish First Minister Nicola Sturgeon said it was a "significant watering down" of what had been promised.

The legislation was based on the recommendations of the Smith Commission, set up by Mr Cameron, although the Westminster bill to deliver the new powers will not be enacted until after the UK election in May.

Its publication came ahead of a meeting between the prime minister and Ms Sturgeon, in Edinburgh.

The Conservatives, Labour and the Liberal Democrats have all pledged to ensure the Scotland Bill becomes law, whoever wins the election.

Mr Cameron is expected to say the proposed legislation, contained in a command paper, proves the so-called "vow" on new Holyrood powers made by the pro-Union parties ahead of the referendum has been delivered ahead of schedule.

"We said draft legislation would be published by Burns Night and here we are, three days before the celebrations start, with those clauses before us," he is expected to say.

Describing the new powers as "built to last", the prime minister will insist they will make Holyrood "one of the most powerful devolved parliaments in the world".

The Smith Commission recommended the Scottish Parliament be given the power to set income tax rates and bands, but not to alter the threshold above which tax is paid.

It also proposed a proportion of VAT raised in Scotland should be assigned to Holyrood and air passenger duty fully devolved.

The Smith Commission recommended the devolution of a range of benefits to support older people, carers and disabled people and said the parliament should be able to create new benefits in devolved areas and make discretionary payments in any area of welfare.

But Ms Sturgeon said, under the proposals, the UK government will hold a veto over key devolved powers, including the ability to "abolish the bedroom tax", and called for an urgent rethink of what was on offer.

She said: "The legislation published today does not represent the views of the Scottish government, but it does represent some progress.

"However, 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."

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ANALYSIS By Glenn Campbell, BBC Scotland political correspondent

It was the former prime minister, Gordon Brown, who devised a timetable for further devolution to Holyrood if there was a "No" vote in the independence referendum.

It was endorsed by all three UK party leaders in what became known as their "vow".

It has been the job of Mr Brown's successor in Downing Street, David Cameron, to make sure the deadlines are met.

He put Lord Smith in charge of hammering out a cross-party deal in time for St Andrews Day, which he managed to achieve.

The draft legislation Mr Cameron's publishing today - in advance of Sunday's Burns' Day deadline - would turn the Smith Commission agreement into law.

But it will fall to whoever forms the next UK government to actually deliver the new powers after the election.

The Conservatives, Labour and the Liberal Democrats have all committed to doing so. The SNP say if they hold the balance of power at Westminster, they'll use it to push for even greater devolution.

ANALYSIS By Douglas Fraser, BBC Scotland economy editor

A crucial part of any federal system is the extent to which it shares risks and transfers money from the rich to the poor, from the buoyant to those fallen on relatively harder times.

All of these issues require inter-government bodies to negotiate the share-out of powers, inter-government grants, the application of rules and borrowing quotas.

Both or all sides have to be politically committed to these bodies.

We're yet to see the machinery the UK Treasury sets up which gives devolved administrations some parity of esteem in such negotiations, as the IMF indicate you ought to be able to find in Belgium, Mexico, Argentina and the USA.

That will, or would, be a big challenge to the culture and the sovereign will of Treasury ministers and mandarins.

The Barnett Formula has, for 36 years, been a way of avoiding such discussions.

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