Scotland politics

Scotland Bill passes latest Lords stage

House of Lords

The Scotland Bill has passed its latest stage in the House of Lords despite calls from some peers for it to be delayed.

Several peers expressed concern that the financial arrangements that underpin the transfer of new powers to Holyrood had not yet been finalised.

But the UK government said details of the fiscal framework would be available before the bill completes its passage.

The bill will now be examined in greater detail at the committee stage.

The legislation, which has already completed its passage through the House of Commons, will see the Scottish Parliament handed new powers over areas including income tax and VAT.

Most of Scotland's £30bn annual budget is currently funded by the UK Treasury through the block grant, with the amount of money that goes into the pot worked out under the Barnett Formula.

Tax and welfare

But once Holyrood gets the power to raise more of its own tax money, the amount of Barnett money which comes to Scotland will be reduced.

Negotiations are ongoing between the UK and Scottish governments over how the remaining block grant will be calculated in the future, with First Minister Nicola Sturgeon warning that Holyrood could veto the legislation if the final deal was seen to leave Scotland at a disadvantage.

Last week, the Economic Affairs Committee in the Lords called for a halt to the Scotland Bill after warning that problems with it could put the future of the UK "at risk".

Speaking during a seven-hour second reading debate on Tuesday evening, the committee's chairman, Lord Hollick, called for the detailed committee stage debate on key parts of the bill covering tax and welfare to be delayed until the updated fiscal framework had been published.

The Labour peer said that without the fiscal framework it was not known how much the Scottish government could borrow and what would happen if the borrowings could not be paid.

Lord Hollick warned about the framework becoming a recipe for disharmony between the two governments, adding: "Much hangs on the terms and principles of the fiscal framework. It is deserving of very close scrutiny.

"The government's haste to legislate risks adding insult to injury. Not only is this major constitutional change being made on the hoof, it's also being made in the dark."

'Good faith'

Scotland Office minister Lord Dunlop said that if the Lords delayed scrutiny now it would be difficult to to have the bill enacted in time for the Scottish parliamentary elections next May.

Lord Dunlop also said he believed the Scottish government was negotiating on the fiscal framework "in good faith", and pointed out that both governments had agreed not to provide a "running commentary" on the negotiations.

He added: "We are committed to reaching an agreement as soon as we can. We cannot guarantee when the negotiations will end.

"Both governments need time and space to reach an agreement that is right for Scotland, right for the UK as a whole, and built to last."

The debate concluded with Lord Hollick withdrawing his amendment calling for a delay, and the bill passed its second reading.

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