Holyrood wins power to go £2.7 bn into debt

Published Date: 01 December 2010

By TOM PETERKIN, DAVID MADDOX and SCOTT MACNAB

THE most radical transfer of financial powers to Scotland for more than 300 years is under way, with new legislation that will hand Holyrood £2.7 billion of new borrowing powers

The UK government's plans to give Holyrood borrowing powers for the first time were published in the Scotland Bill, which also includes a raft of new financial instruments capable of raising about £12bn.

The legislation includes a new Scottish income tax that will force the parliament to raise about a third of the £30bn it spends each year.

Published on St Andrew's Day, the bill will give the parliament borrowing powers, with £2.2bn earmarked for construction projects such as the new Forth Bridge.

The remaining £500 million in borrowing powers is for smoothing discrepancies that may emerge when the new income tax is implemented.
On a day full of symbolism, Scottish Secretary Michael Moore launched the document at the first home of the parliament on the Mound, saying the bill represented the "a new chapter" of devolution.

He hailed the constitutional change as the "largest transfer of fiscal powers" since the 1707 Act of Union, adding that it was a "radical but responsible step".

Mr Moore added: "The level of taxation will be Scotland's to decide and those who set the rates will answer directly to those affected by them. Power will rest with the Scottish people."