Devolution White Paper: What a `yes' vote will mean for Scots

A Scottish parliament with tax-raising powers, ministers and a leader appointed by the Queen will begin sitting on the first day of the new millennium if a September referendum yields a "yes" vote, the Government announced yesterday.

The parliament, which will cost between pounds 10 million and pounds 40 million to set up and which will sit in a building yet to be chosen in Edinburgh, will be responsible for health, education, economic development, the law, the environment, agriculture, sport and the arts.

However MSPs, as they will be known, will not be able to vote on the constitution of the United Kingdom and therefore will not be able to vote for independence. Donald Dewar, the Scottish Secretary, said yesterday that while Scotland had always had the option of breaking away from the Union, it had never shown any desire to do so. The Scottish parliament could hold a referendum on independence but Westminster would still have to decide whether to grant it.

The parliament would be able to levy a tax of three pence above the basic rate, though Labour has promised not to use this. Each penny raised in tax would levy about pounds 150 million in extra revenue, so the maximum extra tax would be pounds 450 million. If the UK tax system were changed - for example by cutting the basic rate of income tax - the Scottish parliament would still be able to raise an extra pounds 450 million in tax.

The White Paper says it would cost pounds 10 million to set up the new Scottish tax system plus pounds 8 million to collect the money. If PAYE were used, this would cost employers pounds 50 million to set up and up to pounds 15 million to administer. Westminster will retain control over a number of other key areas. They include foreign policy, including relations with Europe, defence and national security, though the Scottish parliament will have its own office in Brussels.

Jack Straw, the Home Secretary, won a cabinet battle over who should legislate on abortion and that power will stay at Westminster along with human fertilisation, genetics and vivisection. The licensing of theatres, gambling, the National Lottery and equal opportunities legislation will also be reserved.

Employment legislation, social security, transport safety, common markets for UK goods and services and the stability of the UK's fiscal, economic and monetary system will all be London-based. The Queen will still be head of state of the UK, and the Westminster parliament will have the power to remove any of the Scottish parliament's functions at any time. However, it is believed that a constitutional crisis would be sparked if, for example, a future Conservative government tried to close it altogether.

Elections will take place every four years or sooner if the parliament chooses. Of 129 members, 73 will be elected on a first past the post basis in each constituency, and a further 56 will be allocated proportionally from party lists.

The number of parliamentary seats in Scotland will be reviewed by a boundary commission appointed in 1999, but a special provision which prevents them from being cut will be removed, the White Paper says. Relations with local authorities will be crucial, the paper acknowledges, and the Government plans to set up an independent committee to study how this can be done most effectively.