New welfare legislation will bring about big changes for Scotland that can make a difference to the lives of people in Scotland, Scottish secretary David Mundell said yesterday.

As he laid amendments to the Scotland Bill legislation, Mr Mundell said that Holyrood was about to become one of the most powerful devolved parliaments in the world and that Scotland will be the winner if these new powers are used well.

But deputy first minister John Swinney claimed the changes to the legislation to devolve more power to the Scottish Parliament “still fails to deliver” on Smith Commission and UK Government promises.

The amendments to the Scotland Bill which will be debated at Report Stage next week include a new clause on the power to create new benefits in devolved areas and a clause which makes clear the UK government has no veto when it comes to any new welfare policies that are devolved to Holyrood.

David Mundell said: “These changes put beyond reasonable doubt that the Government has delivered the Smith Agreement. The Scotland Bill means big changes for Scotland that can make a real difference to the lives of people in Scotland. Control over billions of pounds of tax and benefit powers is a huge responsibility that will affect everyone.

“If these powers are used well then Scotland will be the winner. The debate now is about how these powers will be used. It is time for the Scottish Government to set out what benefits they want to top up, what new benefits they want to create and how they intend to pay for it.”

The Scottish Government said it continues to have concerns that the UK government can still effectively veto the exercise of devolved powers over Universal Credit and there are constraints in the devolution of social security discretionary payments. It also believes there is not yet an amendment to give the Scottish Parliament new powers to create benefits in devolved areas.

Deputy first minister John Swinney said: “The sole purpose of the Scotland Bill is to implement the Smith Commission in full. In June, I proposed amendments to do that.

“(The) amendments are a welcome admission that the Bill, as published, did not deliver Smith, despite UK government claims to the contrary. Unfortunately the set of amendments the UK government have promised today still fail to deliver Smith, and still fail Scotland.

“In areas such as social security, employment support and the Crown Estate, the Scotland Bill does not fully devolve new powers and restricts the ability of future Scottish Governments to exercise power without interference.

“The Scotland Bill must also be accompanied by a revised funding settlement that is fair and workable. Work between both governments continues to reach an agreement, which is now likely to be after the UK Spending Review and the draft Scottish Budget.

“(The) amendments need to be closely scrutinised by all parties. Further progress towards implementing Smith in full and agreement on a fair fiscal framework are needed before the Scottish Government can back this Bill.”