Laws that will implement devolution for Scotland recommended by the post-independence referendum Smith Commission have cleared their first Commons hurdle.
MPs gave the Scotland Bill its second reading unopposed, with Scottish Secretary David Mundell saying it would put Holyrood on course to be a “powerhouse parliament”, accountable for raising more of the money it spends.
Scotland’s only Tory MP said the “missing link” between spending powers and accountability that had been a “flaw” in the devolution settlement from the outset had to be fixed.
But he insisted there was no case for full fiscal autonomy in light of the Institute of Fiscal Studies (IFS) projection that it would leave the country with a £7 billion to £10 billion gap in its finances.
Mr Mundell said: “The central aim of the Smith Commission was to address the flaw which had existed within the devolution settlement right from the outset and make the Scottish Parliament more accountable for raising the taxpayer’s money which it spends.
“The significance of this point should not be overlooked. Prior to fully implementing the Scotland Act 2012, the Scottish Parliament controlled almost 60% of public expenditure in Scotland yet it was only responsible for raising around 10% of the funding.
“I didn’t believe that was sustainable and nor did the people of Scotland.
“For Holyrood to be a powerhouse parliament that it rightly aspires to be – and that this Government wants it to be – it must be accountable to the people of Scotland for raising more of the money it spends.
“The Bill before us today is about ensuring that that missing link is fixed.”
The SNP had tabled an amendment arguing the measures outlined in the Bill are not an “adequate response” to the election result in Scotland or fulfilment of the Smith Commission agreement.
It also criticised an “effective veto” retained by the UK Government in key areas and called for the inclusion of additional devolved powers over job creation, tax, welfare and wages.
The amendment was not accepted for debate by Speaker John Bercow, but this did not stop the SNP calling for further powers, insisting that a cross-party devolution committee of Holyrood MPs found that the Bill does not live up to the Smith proposals.
But SNP Westminster leader Angus Robertson came under sustained attack from Labour and Tory MPs about whether the party remained committed to full fiscal autonomy.
Mr Robertson said he “looked forward” to seeing amendments on full fiscal responsibility.
He said: “Of course I look forward to amendments that will be made on full financial autonomy, which SNP members will be voting for.”
But MPs argued that Mr Robertson’s comments fell short of a commitment to full fiscal autonomy, with Labour former frontbencher Emily Thornberry insisting that “autonomy” would mean more powers than “responsibility”.
In response, Mr Robertson said: “I opened my contributions at the start of this by saying that I look forward to the SNP amendments on full fiscal autonomy.
“I will see how members of the Labour Party will troop through the lobbies and vote with the Tories yet again when it comes to government in Scotland.
“And I would suggest if they want to retain their only seat they should think twice about pursuing that course of action.”
Mr Robertson also criticised the Bill for not living up to the Smith Commission or “the vow” made by the three main party leaders during the referendum campaign.
He said: “They promised the earth, or more accurately, they promised ‘Home Rule’ and ‘as close to federalism as possible’.
“At least I suppose they had the nous not to carve those particular promises on an eight feet block of stone.
“There is no doubt whatsoever that the Bill before us does not match the pledges of the campaign or the spirit and the letter of the Smith deal.”
Tory Bernard Jenkin (Harwich and North Essex) said many MPs from his party could vote in favour of full fiscal autonomy and accused the SNP of being dishonest.
He said: “Let them put down that amendment in favour of full fiscal autonomy.
“He may oppose it, but he may find quite a number on this side of the House actually voting for it, it might actually go through.”
Shadow Scottish secretary Ian Murray said the Bill would give the Scottish Parliament the “immense power to change society for the better” to create a fairer Scotland.
He questioned if the SNP would prioritise using the new powers as a responsible government or if they will “continue a politics of grievance and blame”.
The Labour frontbencher also called into question the SNP’s commitment to full fiscal autonomy, saying the party’s position was now unclear.
He said it would be the “worst case scenario” for Scotland if the SNP asked for full fiscal autonomy and a Tory government delivered it for them.
He added: “In short it would mean an end to the social solidarity that makes Britain what it is today.
“That’s not left of centre, or even a progressive case, it’s a recipe for disaster.”
The Bill will proceed to committee stage where MPs are likely to table amendments.