Nicola Sturgeon: Tax powers must be ‘priority’

Ms Sturgeon signalled her intent to move towards an agreement on full fiscal autonomy yesterday as she insisted the SNP is not “changing its tune” on the prospect of holding a second referendum, while Mr Cameron stressed that he would not countenance such a move.

The SNP leader made it clear she expected quick action on handing over more powers on welfare and economic growth and that her party’s 56 MPs would be able to exert influence at Westminster despite the Conservatives holding a majority in the House of Commons.

She said: “Scotland clearly doesn’t want austerity to continue, and there are discussions we will require to have about the Scottish Parliament and Scottish Government’s budget – discussions that I will want to have about £12 billion of welfare cuts that David Cameron didn’t specify in the election, that will hit disabled people.

“The will of the Scottish people has to be listened to. I think it’s likely, given that Labour are entering a period of introspection and questioning their very purpose in life, the SNP is going to be the principal opposition to the Conservatives.” Ms Sturgeon said Mr Cameron had not indicated to her that he was willing to move to offer Scotland full fiscal autonomy.

She said: “Our manifesto set out very clearly that we would want to move to full fiscal responsibility. Clearly that will take a number of years to implement.

“What we will argue for is priority devolution of powers over business taxes, employment, the minimum wage, welfare – because these are the levers we need to grow our economy faster, to get more people into work paying taxes and lifting people out of poverty.

“David Cameron didn’t give me any indication that he wanted to move beyond the current Smith Commission proposals. I think he has to, and that clearly is one of the things we are going to have to discuss.”

In a sign of the momentum building for constitutional upheaval in the wake of last week’s election result, a cross-party group of peers and MPs has stepped up the pressure on Mr Cameron to ditch the Smith Commission proposals and seek a federal solution for the whole of the UK.

The Scotsman has learned a group set up by Scottish Labour peer Lord Foulkes and Liberal Democrat Lord Purvis will invite London mayor and newly elected Tory MP Boris Johnson, along with new East Lothian SNP MP George Kerevan, to draw up plans for a federal UK.

Meanwhile, former Labour first minister Lord McConnell, who is part of the group, called for a “pause” and suggested the Smith proposals were “a shambles”. Former Scottish Conservative MP Sir Malcolm Rifkind demanded a Royal Commission on the UK’s constitutional future.

In his acceptance speech on Friday, Mr Cameron indicated that he intended to go ahead with the Smith Commission proposals, which include handing over control of much of welfare, air passenger duty and income tax. However, Downing Street sources said at the weekend that the Prime Minister was “very concerned” about the election result, which has left just three pro-Union MPs out of 59 from Scotland.

Mr Cameron insisted yesterday: “There isn’t going to be another referendum.”

Asked whether he was confident he would not be the last prime minister of the UK, he said: “Very confident. The United Kingdom voted to stay together in that referendum.

“We had a referendum. Respect and trust should be at the heart of our system, and that’s what we did and Scotland voted emphatically to stay in the United Kingdom, which I think was an affirmation of what a great country this is.”

He repeated: “There isn’t going to be another referendum. We had the referendum and the SNP aren’t pushing for another referendum, actually – Nicola Sturgeon said that vote in the general election was not about another referendum.

“Now what we need to do is bring the United Kingdom together. We are going to do that by delivering the devolution settlement in Wales, delivering the devolution settlement in Scotland, keeping all the pledges that were made.”

Speaking after taking part in commemorations of the 70th anniversary of VE Day, Mr Cameron said: “That’s one of the things this government should be about: the idea of renewing and refreshing the United Kingdom.

“And today is a good day to remember just what the United Kingdom stands for and what it has done. The United Kingdom stood alone against Hitler. That’s what these people did.”

However, Lord Foulkes told The Scotsman the cross-party group, which already has the support of the Local Government Association in England, will try to bring in senior Conservative and SNP figures to push for a better settlement.

He said: “We need a solution that is going to work for the whole of the UK, and that needs to be a radical federal solution.

“I’m delighted that people like Boris Johnson agree with us and there have been interesting contributions from George Kerevan, so we hope they can lend us their support.”

He added: “The Smith proposals were far too rushed and now need to be looked at again.”

Lord McConnell labelled the Smith Commission proposals for further devolution shambolic and called instead for a constitutional convention to include all parts of the UK.

He said: “I have to say the Smith Commission proposals are a shambles, and the idea that the response to what happened last Thursday is to plough ahead with what will become a shambles – it cannot be the solution.

“For the Prime Minister talking about a one-nation country when clearly we’re a multi-national United Kingdom, and there needs to be a modern approach to governing that . . .

“He needs to take a pause rather than plough ahead with appointing a secretary of state for Scotland, going ahead with the Smith Commission proposals that will fall apart in due course and talking about one nation as if everybody is the same. He needs as Prime Minister to lead a proper debate.”

Lord McConnell added: “I think you need to have something like a Royal Commission reporting in the next year on how we can draw these threads together, and the test should be what is fair for all the countries of the United Kingdom.

“You can never have a truly federal system like the United States or Germany because England is too large.

“England is 85 per cent of the United Kingdom. You can’t have an English Parliament and England does not want to be sub-divided into regions, each with their own parliament.

“But you could go some way in that direction. You can have a quasi-federal system. Because you don’t need uniformity.”

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