Scotland politics

MSPs approve fiscal commission tax forecast powers

John Swinney
Image caption Mr Swinney announced the fiscal commission would be able to make independent forecasts just two weeks after saying he opposed the move

Plans to give Scotland's new financial watchdog the power to make independent forecasts of the country's tax revenues and GDP have been passed by Holyrood.

The changes were agreed by Finance Secretary John Swinney as part of his negotiations with the Treasury over Scotland's future finances.

The Scottish Fiscal Commission already scrutinises the Scottish government's forecasts for devolved tax receipts.

MSPs passed a bill laying out its full role and responsibilities.

Holyrood's finance committee had initially called for the independent body to be allowed to produce official forecasts.

But it later voted down its own proposals under pressure from Mr Swinney, who had proposed that the Scottish government would put together the forecasts.

'Poor day'

Mr Swinney had questioned whether the fiscal commission would be able to make "robust and reliable" tax forecasts.

And he said allowing the commission to make forecasts would increase its operating costs and could "give rise to significant duplication" or even threaten its independence.

His comments led to SNP MSPs Kenneth Gibson, Mark McDonald and John Mason and independent Jean Urquhart voting to reject the committee's original recommendations.

The move was described by Conservative MSP Gavin Brown as "a poor day for parliament, a disastrous day for the finance committee and bad news for the scrutiny of Scotland's finances".

Image caption The finance committee voted by four to three to reverse its own recommendations on increasing the powers of the Scottish fiscal commission

Mr Brown added: "Several committee members reversed their position from an agreed finance committee report just a few weeks ago.

"The stark contrast between what the finance committee agreed in its report and what certain members argued today is staggering. We are left with a bill that creates an advisory body instead of an independent scrutiny body."

Just a fortnight later, Mr Swinney confirmed that the commission would be able to make forecasts after all.

This was as a result of the deal he had struck with the Treasury over the fiscal framework that will underpin the devolution of new tax and welfare powers to Holyrood under the Scotland Bill.

Mr Swinney told the finance committee: "The key issue I've agreed with the Treasury is that forecasts of tax revenues and GDP must be undertaken by an independent body, and that will be the focus of my attention in drafting the amendments.

"I'm not at all keen to reconstruct the fiscal commission, as it is operating independently, but the very precise agreement we've arrived at is in relation to the issue of forecasting."