Sturgeon sets out new deal ambitions

Nicola Sturgeon
By Michael McGlinchey, CA Today

24 February 2016

The first minister vows changes to income tax, local taxation and welfare as her government reaches a deal with Westminster on a new fiscal framework.

Scotland’s first minister has set out her government’s commitment to new proposals on income tax, local taxation and welfare following the announcement of a deal on a new fiscal framework.

Speaking at an ICAS-sponsored event shortly after the announcement at Holyrood, Nicola Sturgeon said her government would seek to strike a balance between effective public services, “strong social protections”, and a positive business climate using the new powers.

The first minister and Deputy First Minister John Swinney had been in protracted talks with Chancellor George Osborne and the Treasury to agree a new financial settlement, and it was announced on Tuesday that agreement had been reached ‘in principle’.

This followed Lord Smith’s cross-party commission which established agreement on further devolution for Scotland in light of the independence referendum in 2013.

Ms Sturgeon told the audience, which included ICAS members that the final negotiating point was on the principle of “no detriment” which meant that neither government should be disadvantaged in negotiating Scotland’s block grant.

She said: “Thankfully we have managed to reach an agreement and, what I’ve just announced to the Scottish Parliament, is that we’ve reached an agreement that delivers no detriment.

“That will be done firstly through a six-year transitional period, where the block grant adjustment will be done in a way that guarantees this no detriment.”

Ms Sturgeon said this would then be followed by a review and it would be for a future Scottish Government to decide the way forward.

The first minister had earlier said new powers would provide her government with more flexibility on income tax, providing an ability to adjust income tax rates and change thresholds, with proposals to be announced in the coming weeks.

She said proposals for changes to the system on local taxation would be announced next week. This follows the recommendations of a Commission on Local Taxation, which ICAS contributed to.

The government would also set out how it intends to use new powers on welfare during a debate in the parliament next week, the first minister said.

The theme for Ms Sturgeon’s address had been “Transforming Scotland – opportunities for the next Parliament” and she said the task now would be “how to use the powers, albeit the powers with limitations, to continue to build on our work to make Scotland a better place to work and live”.

Ms Sturgeon’s speech was the last in the recent series of Politicians and the Professionals events at the David Hume Institute. These also featured the leaders of the other main political parties in Scotland.

Labour Leader Kezia Dugdale, Willie Rennie of the Liberal Democrats, Conservative Leader Ruth Davidson and Scottish Greens co-convener Patrick Harvie set out their visions for Scotland in the run-up to the Holyrood elections in May.

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