The economic advisers to the Calman Commission on devolution have refused to make any clear recommendations on how to give Scotland greater fiscal autonomy.
The economic advisers to the Calman Commission on devolution have refused to make any clear recommendations on how to give Scotland greater fiscal autonomy.
The publication of the report this afternoon, on the 10th anniversary of the Scotland Act, was expected to give fresh impetus to the debate about issues such as the Barnett formula and greater financial powers for the Scottish Parliament.
But contrary to reports over the weekend, the group chaired by Professor Anton Muscatelli, principal of Heriot-Watt University, has decided not to make specific recommendations on Holyrood's powers of tax and spend.
One source within the group said: "It has been claimed by some that we are recommending major new taxation powers, by others that we have ruled out full fiscal autonomy.
"In fact this report is a thorough look at all the options, rather than a report that comes to full conclusions. It is therefore a challenge to the Calman Commission to reach agreement on the new constitutional order first, before coming up with financial conclusions to fit it."
Their report will look at the existing Barnett system of the block grant, the requirement for a needs assessment if that is to be replaced, the possibility of Scotland retaining more of the taxes raised here and how other countries with devolved or federal areas have handled similar issues.
But the Muscatelli group has decided not to recommend any particular course to Calman and instead has simply laid out the arguments for and against the various possibilities, although the tenor through is believed to be that change is inevitable.
The expert economic group will continue in existence after today, and The Herald understands that more reports are expected to follow, possibly including a closer look at the complex issue of North Sea oil and gas revenues.
Although UK ministers have made clear that they do not envisage major changes to the devolution settlement arising out of the Calman process, there have been indications that a new scheme of assigned revenues, in which some taxes raised in Scotland are retained by Holyrood, could replace or augment the Barnett system.
But over the weekend former Scotland Office Minister David Cairns voiced concerns about this approach because of what would happen during any downturn, insisting that the block grant had served Scotland well by more than doubling from £14bn in 1999 to £30bn.
He said: "You can bet your bottom dollar that the first year there is a dip, the Scottish government is going to be demanding an extra £1bn. Let's have a reality check. The current system is delivering and has delivered unparalleled levels of increased investment in Scotland and you go about chucking that deal out with the bath water at your peril."
The Calman Commission. chaired by Sir Kenneth Calman and including former deputy first minister Jim Wallace and ex-Lord Advocate Lord Boyd in its 15-strong panel, has the support of Labour, the Conservatives and Liberal Democrats and is specifically charged with enhancing devolution and improving the financial accountability of Holyrood, while continuing "to secure the position of Scotland within the UK."
The SNP remained outside the process for this reason.
A spokesman for First Minister Alex Salmond said yesterday: "We know that the UK Government is opposed to any real financial powers for Scotland, and now it seems that the Calman Commission is falling short of what is required and does not meet the challenges of the times.
"What the Scottish Parliament needs is control over Scotland's resources as well as borrowing powers to allow it to respond to economic circumstances, which it can't do within a fixed budget."
