 | 'Mr Brown's speech came as the SNP is still riding high in opinion polls, and Labour is bracing itself for a difficult by-election in Glenrothes, adjacent to the prime minister's own constituency.' Alan Bolger in the Financial Times, 5 th September 2008. |  |
Scottish Nationalists claimed their popularity had forced Gordon Brown to "cave in" to giving the devolved Holyrood parliament more financial powers.
John Swinney, Scotland's finance secretary, said rising support for the Scottish National party and Labour's defeat in the recent Glasgow East by-election had caused the prime minister to shift his ground.
The claim followed Gordon Brown's speech to the Scottish CBI in which he signalled his support for Holyrood having greater financial accountability.
Mr Brown's speech came as the SNP is still riding high in opinion polls, and Labour is bracing itself for a difficult by-election in Glenrothes, adjacent to the prime minister's own constituency.
The prime minister insisted he would not pre-judge the commission established by the pro-Union parties under Sir Kenneth Calman to study whether the Scottish parliament should have more powers, although independence has been excluded from its remit.
Speaking on Thursday evening, Mr Brown said: "Devolution has worked, but I do see one problem - while there have been good reasons why this is so, the Scottish parliament is wholly accountable for the budget it spends but not for the size of its budget. And that budget is not linked to the success of the Scottish economy.
"That is why we asked the Calman Commission to look carefully at the financial accountability of the Scottish parliament. And this is a critical part of Calman's remit."
Mr Swinney said this was a "massive" change by Mr Brown, who had ruled out more powers for the Scottish parliament during last year's Holyrood election campaign, which saw the SNP oust the ruling Labour and Liberal Democrat coalition to form a minority government.
"Here we are a year later, Gordon Brown has caved in to pressure from the Scottish National party and rising support for the SNP, based on the aspirations of the people of this country," he told BBC Radio Scotland.
"Whether it is the prime minister's option that emerges or the Scottish government's position of believing in Scottish independence that prevails, Scotland and our parliament is going to have more financial powers and that's a great step forward."
The SNP government, like the previous Scottish administrations, has not used the powers granted in the 1998 devolution act to vary income tax by up to 3p in the pound, fearing any such "tartan tax" revenue would be subtracted from the funding received from Westminster. So Holyrood remains entirely dependent on the block grant it is awarded by the Treasury, which will reach £30bn by 2010.
In his speech, Mr Brown launched a fierce attack on the SNP, accusing the Nationalists of a "bleak separatist obsession" and attacking their claim to be a pro-business party.
The prime minister warned of a "real risk" of waking up one day to find the benefits of the union had been too long taken for granted and had been "thoughtlessly thrown away".
He said Clyde naval shipyards and the financial services sector, Scotland's biggest employer, both relied on the UK market.
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