A House of Lords committee has called for the Scotland Bill to be delayed, citing uncertainty over how Holyrood will be funded.
In a report published today, peers claim a lack of scrutiny of financial arrangements in the bill by MPs, could lead to problems in future devolution settlements.
The report by the economic affairs committee states that despite the “unprecedented” nature of devolving income tax revenue as well as giving almost full power to set the rates of tax, the bill has proceeded with “undue haste”.
Scottish and UK ministers are still negotiating terms in relation to funding.
The committee raised concerns in relation to Scotland’s block grant, claiming that given a lack of clarity over the economic risk the Scottish Government should take on, as well as its devolved income tax revenues, reaching a preferred option is currently “impossible”.
They also concluded a need to reform the Barnett Formula, used to calculate Scotland’s share of funding, and to increase transparency and scrutiny of how funding is allocated to the devolved nations.
The report recommends that the UK and Scottish Governments agree “simple and clear borrowing rules and a maximum ceiling on Scottish Government debt”, doubting that the current “no bail out” proposal between the UK and devolved governments would be believed by the markets.
Lord Hollick, Chairman of the House of Lords Economic Affairs Committee, said: “The Scotland Bill has the potential to fundamentally change the UK and impact on us all both politically and economically. It is crucial that what is proposed is stable and sustainable. Parliament is being asked to pass the Bill before we are told full details about the fiscal arrangements that will underpin this new era of devolution. That cannot be right.”
The Scottish Government have previously claimed that Holyrood would reject any fiscal settlement perceived as not benefiting Scotland.
Deputy First Minister John Swinney told BBC Radio Scotland’s Good Morning Scotland programme: “I would be against there being a delay in the House of Lords because I think fundamentally we need to make progress on the Scotland Bill so that the Scottish Parliament can take its final decision on whether the bill is to be adopted before we get to the Scottish Parliament elections next May.”