Devolution of powers to Holyrood 'will have as profound an impact as creation of Scottish Parliament'

The range of new powers being devolved from Westminster to Holyrood in the coming months will have as profound an impact on the lives of Scots as the creation of the Scottish Parliament did 17 years ago, the Scotland Secretary will say on Monday.

Handing the Scottish Government control over income tax and welfare will effectively create a “new” Scottish Parliament with far more power to change people’s lives than the existing one, David Mundell will say in a major speech in Edinburgh.

With the Scotland Bill set to receive Royal Assent within a few months, 2016 will see the dawn of a new era in Scottish politics with a transformation in the powers of the Scottish Parliament and its relationship with the Scottish people, he will suggest.

Dubbing the new-look parliament “Holyrood 2.0”, he will argue that most Scots – and even many of the country’s politicians – have not yet grasped the significance of the new powers and their potential to fundamentally change people’s lives.

“If you actually look at the scale and scope of the transfer of powers coming with the Scotland Bill, it’s going to be the biggest shift in the history of devolution in the UK,” said a UK Government source. “It will see a transformation in the way Scotland is governed as big as the inception of the Scottish Parliament itself back in 1999.”

Mr Mundell will also use his speech – which has been playfully entitled “The Year Of A New Scottish Parliament” – to throw down the gauntlet to Scotland’s political parties, insisting that they must set out how they plan to use the powers well in advance of the Holyrood election in May.

Rather than singling out the SNP, which has claimed that the powers contained in the Scotland Bill fall “far short” of what was promised in the wake of 2014’s referendum on independence, Mr Mundell will tell all parties to be “explicit” with their plans so the electorate can make an informed decision.

“The parties people in Scotland will be voting for in May will be the ones who decide how much income tax they pay – or how little, for that matter,” the source added. “They’ve got this panoply of powers, they can do whatever they want, but they’ve got to start levelling with people about what they’re going to do, and how they’re going to fund it as well.”

Under the terms of the Scotland Bill, which is currently passing through the House of Lords, the Scottish Parliament will be given control over income rates and bands from April next year, as well as being handed the power to spend VAT revenues and alter some aspects of welfare expenditure.