Secretary of State for Scotland: Commission on Devolution, Dynamic Earth, Edinburgh

Good afternoon ladies and gentlemen.

On behalf of the UK Government I warmly welcome the publication today of the final report from the Commission on  Scottish Devolution.

The Commission, under the chairmanship of Sir Kenneth Calman, has independently reviewed the devolution settlement ten years on.

They have produced a substantial and detailed report.  Constructed on a solid framework of sound analysis, a robust evidence base and through extensive engagement.

After a decade of devolution, we are at a watershed moment, a time to take stock. 

The Commission's conclusion that the devolution settlement has been 'a remarkable and substantial success' is borne out by the broad support in Scotland and across the UK for the devolution settlement.

The Scottish Parliament has matured into a firm fixture in public life.  Not only has it brought government closer to the Scottish people but  it is providing Scotland with greater accountability.  And it has embraced innovation in both policy and methods of working, producing landmark and pioneering legislation in the process.

There is much to consider in the report for devolution's next decade and beyond.  I would like to turn to three points, namely, fiscal issues, closer institutional cooperation and the powers of the Scottish Parliament.

Finance

Turning first to the fiscal issues.  The Commission's finance recommendations draw from the work of Professor Anton Muscatelli's group of independent financial experts.  I thank them for their work.  The Commission suggests a new financial model, providing the Scottish Parliament with the flexibility to set the level of income tax.

The proposal to bring forward more financial accountability is about better government and completing the late John Smith's 'unfinished business'.

The UK Government agrees that financial accountability could be achieved by moving to a system where a greater proportion of the Scottish Parliament's budget comes from their own decisions.  We welcome the Commission's model which provides a promising and well evidenced basis on which we can work with the Scottish Parliament and others to bring forward practical proposals. 

The suggested changes are complex, and require detailed and careful consideration.  Along with Her Majesty's Treasury, we will assess, and explore how to implement these proposals.

We agree with the Commission's recommendation that any change must be introduced in a phased way to manage the risks of instability in public finances and of windfall gains or shocks.  We will take this into account in developing proposals.

Working Together

I have emphasised since becoming Secretary of State that the Scottish people have a right to expect cooperation and teamwork from their politicians and institutions, particularly at these difficult economic times.  I have initiated the first joint meetings between Scotland's two governments, the CBI and the STUC.  I am glad that the Scottish Government Cabinet has accepted my request to meet with them next week.

I agree with the Commission's conclusion that in order to serve the Scottish people better we need the institutions of the UK and Scotland to work together more effectively.

The UK Government is moving forward with this - through steps to reinvigorate the Joint Ministerial Committee and by working together with the Scottish Government, particularly on finding ways to mitigate the impact on Scotland of the global recession.  We will consider the Commission's recommendations carefully.

Scottish Parliament's powers

Finally, the Commission has also proposed a number of changes to the powers and functions of the Scottish Parliament, based on the work of Sir David Edward's task group.  I am grateful for their careful consideration of this important area.

In line with the test that we have always applied in extending the settlement, we are willing to make further changes.   In areas where there is benefit to the people of Scotland through either greater accountability or by enabling policy and legislation to be tailored to meet their needs.

Conclusion

With the Commission's report we have the opportunity of a generation to refine the devolution settlement.  It gives us a blueprint for the renewal of the relationship between the people of Scotland and government.

A Labour Government delivered devolution and has been ready to review it.   We are pledged to an open, transparent democracy.  And as we embark upon wide-ranging constitutional renewal across the UK, the Commission's report puts Scotland ahead of the game.

It is the Scottish Parliament transformed and Scotland's place in the Union refreshed.

I will take responsibility for taking this work forward and renewing the constitutional settlement in Scotland.  That is why today I'm announcing the formation of a Steering Group involving all the political parties on the Calman Commission and proposing a first meeting within the next few weeks.  We are at the beginning of a new chapter for devolution in Scotland and I'm determined that we maintain momentum and consensus.

The Government warmly welcomes the report.  I am grateful to Sir Kenneth and the members of his Commission for all their hard work and I am happy to take questions.

Read the full report by the Commission on Scottish Devolution