Beware of Greeks bearing gifts

Money matters are key to the Scotland Bill

Is it conceivable that the SNP could exercise a veto over the transfer of new tax powers to Holyrood? The short answer is: Yes.

Conceivable - but politically and strategically challenging.

Would the public understand a decision to resist more powers from a party whose funding objective is not just independence but to advance the interests of Scotland?

Aha, say Nationalists, but what if it can be demonstrated that the Scotland Bill as it stands - and particularly its tax powers - do not advance the interests of Scotland? Again, one returns to perception.

Unless carefully explained, that message might be lost amid the strident condemnations which would undoubtedly come from those advocating the Bill.

Hence the potential dilemma for Scottish Government Ministers - who are in talks today with the UK government in the shape of the Treasury and the Scotland Office.

A few basics. The Scotland Bill, presently before Westminster, transfers new powers to Holyrood such as control over national speed limits and air weapons.

More crucially, it enhances Holyrood's tax power. Under the Bill, MSPs would be directly responsible for 10p worth of income tax revenue - with a consequential reduction in the block grant from the Treasury.

Advocates say it would give much more fiscal - and thus political - responsibility to the Scottish Parliament, with MSPs obliged to set an annual tax rate. Raise the tax rate, get more cash.

Lower the tax rate….you get the concept.

Critics say that it could leave Scotland short of funds - depending upon how the consequential reduction in block grant is calculated - and who does the sums.

In these days of mutual respect, the UK Government has promised that the Scotland Bill will not finally pass Westminster until it has been endorsed by Holyrood in a further Legislative Consent Motion, due to be tabled before the end of the year.

That is, in effect, a veto.

'To be blunt'

Throughout the process, SNP leaders have denounced the Bill - which emerged from the Calman Commission - as inadequate and insufficient to meet Scotland's needs.

They have sought to add to the scope of the Bill by, for example, advocating the transfer of corporation tax to Scotland.

A specially convened committee of MSPs has been scrutinising the Bill afresh.

To be blunt, the SNP members have been decidedly less than impressed by the evidence given to them by, among others, the Scottish Secretary Michael Moore.

In response, Mr Moore's supporters and others say that the Nationalists have been obsessed with pursuing their own agenda rather than discussing the practical detail of the Bill.

All of which provides a tense backdrop to today's talks - and the committee's continuing evidence sessions.

Which brings us back to the opening question - could there be a Holyrood veto?

The plan is that the tax power would be phased in. Initially, the projected revenue for Scotland - and hence the cut in block grant - would be calculated by the Treasury with an initial guarantee of financial stability.

Over time, as information was gathered, it is envisaged that it would be possible to calculate more precisely just what 1p of income tax actually raises in Scotland - and thus to expose the Scottish budget to the ups and downs of tax revenue.

Tax powers

UK Ministers say the Scottish Government should stop grand-standing - and get down to the hard work of implementing this plan.

But Scottish Government Ministers - and others - say they do not trust the process.

They say the figures presented to the committee appear to be guess work rather than robust calculation.

So what do they want? Independence, of course. As an interim, full tax powers.

But what do they want now, with the Bill as it stands before them?

As a minimum, they want control of the commencement orders, the subsequent statutory instruments under which the tax plan would be put into operation.

In short, they want Holyrood to determine when the information is sufficiently well grounded to permit the plan to commence.

Thus far, that suggestion has been resisted with the Treasury keen to keep this as an issue for cross-border Ministerial consultation.

In fundamental terms, I still believe it may be difficult, politically, for the SNP to turn down an offer which, on the face of it, brings enhanced power for Holyrood.

Still, those who have read their Virgil may be found muttering to themselves: "Timeo Danaos et dona ferentes" (rough translation, 'Beware of Greeks bearing gifts').

Those who have not may still be cautious. This issue is far from clear cut.