It is a pleasure to serve under your chairmanship, Sir David, and to speak to amendment 89, tabled in my name and the names of my hon. Friends.
If amendment 89 is passed, it will deliver full fiscal autonomy for Scotland. That means that Scotland will collect all her own taxes, fund all her own spending—all the spending that is the responsibility of the Scottish Parliament—and pay a subvention for shared spending on Scotland’s behalf, primarily on defence and foreign affairs, by the UK Government. This is not simply about responsibility for taxation; it is about responsibility for all spending outwith limited and agreed areas.
On the question of why we need this, the answer is clear. We need and deserve important decisions to be taken as close to the people as possible and, more importantly, we need those decisions to be taken in line with the aspirations and democratic choices of the Scottish people.
The next question is what we would do with the powers. The answer depends very much on the view of the Scottish Government of the day, the prevailing economic conditions, and the most up-to-date economic forecasts. I will describe what an SNP Government might do with the powers of full fiscal autonomy to grow the economy, improve conditions for business investment and job creation, and start to make society fairer—all of which are vital for Scotland’s economy and future.
We believe in the transfer of more powers to Scotland not as an end in itself but because through it the Scottish Government can exercise those powers to the
benefit of Scotland’s economy and society. For example, we would not merely have control over income tax rates and bands for earned income but have responsibility for all tax on income, including definition, the basic rate starting threshold, and tax rates on dividend and investment income. That would allow for every possible policy choice, delivering to future Scottish Governments the flexibility to craft an income tax system. Likewise, the devolution of corporation tax would allow for a comprehensive tax regime, including an intelligent use of allowances to assist business in investing for the future.