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Response to Calman Commission
05/06/2009
The Calman Commission, appointed by the UK Government to review 10 years of devolution, today published reports by its Expert Group on borrowing powers and North Sea taxation.
In response Cabinet Secretary for Finance and Sustainable Growth John Swinney said:
"Today the dam has been breached on oil revenues and borrowing. The UK government's years of saying 'no' is clearly no longer credible. Things are moving in Scotland's direction.
"We welcome the long overdue recognition - after more than 30 years in which around £270 billion in North Sea revenues have flowed to the Treasury - that Scotland is entitled to a fair share of its own oil revenues. We are also pleased that at last there is a clear acknowledgement that our fair share stands at 90 per cent of the UK Continental Shelf resources.
"That 90 per cent share is worth around £30 billion over the next five years, at a time when the UK Government is planning to cut £500 million a year from Scotland's budget.
"The recognition of the benefits of a Scottish oil fund, similar to the Norwegian fund which is now worth more than £200 billion, is also significant. Such a fund has been suggested for years.
"However, giving Scotland responsibility for our own oil resources only makes sense if the country now moves on to raise all the money it spends, with full fiscal autonomy.
"It would make no sense at all to adopt a system that was little more than giving with one hand whilst taking away with the other.
"Unfortunately, that appears to be what the proposal envisages, as it also does with regard to much-needed borrowing powers. Certainly, we welcome the acknowledgement that there is benefit in the Scottish Government being able to borrow to fund investment. But such borrowing would be of little use if it merely resulted in the Scottish budget being cut elsewhere.
"Suggesting replacing the Barnett Formula by giving Scotland assigned tax revenues would be the worst of all possible worlds, in that it would expose the country to fluctuations in tax revenues without having any control over those taxes."
Minister for Culture, External Affairs and the Constitution Michael Russell added:
"It is now clear that the Calman Commission will not be recommending the status quo. Change is happening, so we must now determine what is the best solution for the people of Scotland.
"If the current funding arrangements are to be changed, then the only acceptable alternative is full fiscal autonomy for Scotland, allowing this country the ability to raise all the money it spends.
"Any other system - such as assigned tax revenues - may well end up leaving Scotland worse off. That is something Sir Kenneth Calman maintains he would never do. He must be held to such a commitment.
"The simplest way to resolve the debate about reforming the current funding arrangements is for an independent Scotland to take charge of its own resources, with full fiscal autonomy. The Scottish Government will offer that choice in the free and fair referendum that we propose next year."