1. Scotland – Enduring the Scotland Bill
David Cameron and Gordon Brown characterised the debate surrounding Scotland’s referendum as
one between federalism and independence. This was the choice that most people thought they
were making, between a federal UK state with devolution of matters other than Defence and
Foreign Affairs to, in Scotland’s case the Scottish Parliament. David Cameron stated:
"In Scotland our plans are to create the strongest devolved government anywhere in the world, with
important powers over taxation."
http://www.telegraph.co.uk/news/general-election-2015/11593179/David-Cameron-Scotland-will-
be-strongest-devolved-government-in-the-world.html
When we talk about federalism we use the term as meaning fiscal federalism, the control over, most
importantly, taxation with the Scottish Parliament able to alter this to suit the changed
circumstances we find ourselves in over time. Is this what the nation has seen delivered?
A detailed study of the proposals set out in the UK Government’s Command Paper “Scotland in the
United Kingdom – an enduring settlement” follows below looking at what has and has not been
transferred and the limitations placed upon those things which have been transferred:
https://www.gov.uk/government/publications/scotland-in-the-united-kingdom-an-enduring-
settlement
Lord Smith of Kelvin was faced with a short timescale to reach his conclusions. Essentially he had in
front of him a fork in the road. He could head one way and plot out a Devo-Max parliament with full
powers over taxes and spending, the scenario Brown and Cameron were presenting as an alternative
to independence. Such a choice provided an opportunity to reach a settlement which could endure.
That was not the road chosen.
Smith’s chosen route of travel charts a very limited change in the Scottish Parliament’s powers over
taxation. We are given much wider control over the Parliament’s powers to spend. It is a diminutive
version of devolution which I’m happy to Christen “Devo-Dim”. No-one can look at the powers
transferred and conclude that these will endow the Scottish Parliament with the tools it needs to
create a powerhouse economy in an enterprising nation. We can’t even set up an Enterprise Zone.
The choice made has negated our chance of an “Enduring Settlement”.
This update follows the publication of the Scotland Bill 2015 and its Second Reading in the House of
Commons and debate in the House of Lords, during which the following contributions were made:
Lord Forsyth of Drumlean : “All the unionist parties stood on a platform of bringing in the proposals
of the Smith commission and we ended up with three seats out of 59. This is not a credible position; it
has been rejected.”
—[Official Report, House of Lords, 1 June 2015; Vol. 762, c. 194.]
2. Sir Edward Leigh MP: “I say to the Government that there is such a thing as democracy. The Smith
commission has been rejected. We cannot just plough on regardless. We have to listen to what the
people have said.”
http://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm150615/debtext/150615-
0001.htm#15061516000001
The Scotland Bill 2015 can be found at:
http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0003/16003.pdf
The Bill sets out a series of amendments to the Scotland Act 1998 which has rather unfortunately
been updated several times without the amended Act appearing online. Look for it on the website:
http://www.legislation.gov.uk/ukpga/1998/46/contents
The amendments previously introduced have significantly altered the Act. The new Bill proposes
amendments to an Act which bear no relation to what you find when looking at the online version.
Take the first amendment in Part 2 on Taxation:
“(1) Section 80C of the Scotland Act 1998 (power to set a Scottish rate for Scottish
taxpayers) is amended as follows.”
The online Act has a Section 80 which states:
80 Reimbursement of expenses.
“The Scottish Ministers may reimburse any Minister of the Crown or government department for
administrative expenses incurred by virtue of this Part at any time after the passing of this Act by the
Minister or department.”
http://www.legislation.gov.uk/ukpga/1998/46/section/80
Unless the amended Act is available online the public can have no idea what is being proposed nor
can they follow how the Bill will affect the way they live their lives. Surely given the importance of
the subject matter to the future of Scotland and the UK someone might have thought it worth
bringing the online version up-to-date in advance of the Bill?
The original Smith Commission proposals are shown below:
Power over Taxation Power over Spending
Power over Economy Legal & Political Powers
Revisions to the Smith Commission proposals by the Scotland Bill 2015 are shown as follows:
Power over Taxation Power over Spending
Power over Economy Legal & Political Powers
3. Powers over Taxation Proposal Power Transferred Power Reserved
Corporation Tax No transfer of Power None All areas Reserved
Value Added Tax No transfer of Power None All areas Reserved. Cannot adjust
rates. Police/Fire expenses VAT not
recoverable.
64A Assignment of VAT ½ Share of Standard Rate 20% VAT Scotland gets 10 divided by SR (20) Other half retained. Rate setting
retained. Police/Fire VAT retained
64A Assignment of VAT ½ Share of Reduced Rate 5% VAT Scotland gets 2.5 divided by RR (5) Other half retained. Rate setting
retained. Police/Fire VAT retained
Inheritance Tax No transfer of Power None All areas Reserved
Capital Gains Tax No transfer of Power None All areas Reserved
National Insurance No transfer of Power None All areas Reserved
Excise Duty Rates No transfer of Power None All areas Reserved
Crown Estate No transfer of Power over main
assets
T/f of Power over Land & Property in
Scotland (Inc. Shoreline)
Defence, Security, Oil & Gas and
Energy Reserved
31 Crown Estate T/f of Power over Land & Property in
Scotland
Power over management of Crown
Estate land in Scotland
The scheme must include such
provision as the Treasury consider
necessary or expedient —
(a) in the interests of defence or
national security and (b) in
connection with access to land for
the purposes of telecommunications
31 Crown Estate Power to manage Land and Property
in the Crown Estate in Scotland by
Statutory Instrument.
Power over management of Crown
Estate land in Scotland
(14) The power to make a scheme
under this section is exercisable by
Statutory Instrument. Bill doesn’t say
if this is a Scottish Parliament SI or a
UK Parliament SI – needs clarified.
Offshore Oil & Gas Licensing No transfer of Power None All areas Reserved
Offshore Oil & Gas Taxation No transfer of Power None All areas Reserved
Decide which bodies can reclaim VAT No transfer of Power None All areas Reserved
Right to Levy new taxes No transfer of Power None All areas Reserved
Tax Rate on Savings No transfer of Power None All areas Reserved
4. Powers over Taxation Proposal Power Transferred Power Reserved
Tax Rate on Dividends No transfer of Power None All areas Reserved
Tax Reliefs & Allowances No transfer of Power None All areas Reserved
Air Passenger Duty T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change
18 Devolved taxes: further
provision
Power Retained None (2) The Treasury may by regulations
make further provision relating to—
(a) the disapplication of air
passenger duty in relation to flights
beginning at airports in Scotland;
Aggregates Levy can be altered T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change
18 Devolved taxes: further
provision
Power Retained None (2) The Treasury may by regulations
make further provision relating to—
(b) the disapplication of aggregates
levy in relation to commercial
exploitation of aggregate in
Scotland.
18 Devolved taxes: further
provision
Power Retained None (3) The power conferred by
subsection (2) includes power—
(b) to amend, repeal, revoke or
otherwise modify an enactment,
whenever passed or made (including
this Act).
Onshore oil & gas Licensing T/f Power to Scottish Parliament Yes Can’t levy a royalty on production.
40 Onshore petroleum Proposal Watered Down The granting of licences to search
and bore for and get petroleum
within the Scottish onshore area
Can’t levy a royalty on production &
Can’t collect any consideration
payable for such licences.
40 Onshore petroleum Power Retained No control over the format of the
licences issued.
The Petroleum Act 1998 S4 (licences:
further provisions) (1A) In relation to
licences granted by the Scottish
Ministers, regulations
made by the Secretary of State
under subsection (1)(e) may include
model clauses on the consideration
5. payable for a licence and the
following (insofar as they relate to
such consideration)
(a) the measurement of petroleum
obtained from the licensed area
(including the facilitation of such
measurement), and
(b) the keeping of accounts.
(1B) Regulations made by the
Scottish Ministers under subsection
(1)(e) may not include model clauses
on the matters mentioned in
subsection (1A).
(3A) Any regulations made by the
Scottish Ministers shall be subject to
the negative procedure (see section
28 of the Interpretation and
Legislative Reform (Scotland) Act
2010).
42 Onshore petroleum: existing
licences
Power over existing licences retained
by Sec of State. Power over fallow
fields retained by Sec of State.
Power over closed areas might also
be retained if subject to an existing
licence.
None (1) The Secretary of State may make
any amendment that appears to the
Secretary of State to be necessary or
expedient in consequence of S40—
(a) in any model clause, to the extent
that, under Part 1 of the Petroleum
Act 1998, it is incorporated, or has
effect as if incorporated, in an
existing licence, and
(b) in any other provision of an
existing licence.
(2) The power to make amendments
under subsection (1)(a) is exercisable
by regulations made by statutory
6. instrument.
(3) A statutory instrument containing
regulations under this section is
subject to annulment in pursuance
of a resolution of either House of
Parliament.
Set Stamp Duty rates in Scotland T/f Power to Scottish Parliament Yes None
Set Land Tax rates in Scotland T/f Power to Scottish Parliament Yes None
Set Landfill Tax rates in Scotland T/f Power to Scottish Parliament Yes None
Set Income Tax Rate in Scotland T/f Power to Scottish Parliament Power to set Basic Rate +/-3p in £
Power to set Higher Rate +/-3p in £
-cannot vary +/- rate for each band
Power to set zero rate band
Power to set Personal Allowance
Barnett Formula adjusted for change
S14 Scotland Bill 2015
Consequential amendments:
income tax
Power Retained None (8)Treasury may by regulations
make—
(a) such consequential provision as
they consider appropriate in
connection with any provision of
section 12 or 13
S14 Scotland Bill 2015
Consequential amendments:
income tax
Power Retained None (b) such transitional or saving
provision as they consider
appropriate in connection with the
coming into force of any provision of
section 12 or13 or subsections (1) to
(6).
S14 Scotland Bill 2015
Consequential amendments:
income tax
Power Retained None (9) Regulations under this section
may amend, repeal, revoke or
otherwise modify
an enactment, whenever passed or
made (including this Act).
7. Powers over Spending Proposal Power Transferred Power Reserved
Pensions No transfer of Power None All areas Reserved
Scottish Budget No transfer of Power None, Must remain balanced. All areas Reserved
Pensions No transfer of Power None All areas Reserved
Universal Credit Scotland to do Admin of UC here. Right to be Consulted. Right to vary
frequency of payments – not rate.
Right to pay Landlords directly.
Some changes
24 Universal credit: costs of
claimants who rent
accommodation
(1) A function of making regulations
is exercisable by the Scottish
Ministers concurrently with the
Secretary of State
None. Sec of State has to agree
change proposed or it falls.
(4) The Scottish Ministers may not
exercise the function of making
regulations to which this section
applies unless—
(a) they have consulted the
Secretary of State about the
practicability of implementing the
regulations, and
(b) the Secretary of State has given
his or her agreement as to when any
change made by the regulations is to
start to have effect, such agreement
not to be unreasonably withheld.
(4) The Scottish Ministers may not
exercise the function of making
regulations to which this section
applies unless—
(a) they have consulted the
Secretary of State about the
practicability ofimplementing the
regulations, and
(b) the Secretary of State has given
his or her agreement as to when any
change made by the regulations is to
start to have effect, such agreement
not to be unreasonably withheld.
25 Universal credit: persons to
whom, and time when, paid
(4) The Secretary of State may not
exercise the function of making
regulations to which this section
applies in or as regards Scotland
unless he or she has consulted the
None. Sec of State only has to
consult Scottish Ministers then he
can push ahead whatever they say.
All areas Reserved
8. Scottish Ministers.
29 Information-sharing (9) Regulations under this section
must be made by statutory
instrument.
(10) A statutory instrument
containing regulations under this
section may not be made unless a
draft of the instrument has been laid
before and approved by a
resolution of each House of
Parliament.
Lack of Parliamentary time at
Westminster might mean that
proposed changes can’t be laid
before the Houses of Lords and
Commons. Were this the case, any
proposed changes would fall.
Migrant Benefits No transfer of Power None All areas Reserved
Maritime & Coastguard Agency No transfer of Power None. MoU to govern operations of
MCA
All areas Reserved
48 Maritime and Coastguard
Agency
Watered Down – No Mention of an
MoU.
None The Secretary of State must consult
the Scottish Ministers about the
strategic priorities of the Secretary
of State in exercising functions
under subsection (1) in relation to
activities of Her Majesty’s
Coastguard in Scotland.
Oil & Gas Decommissioning No transfer of Liabilities None Westminster got Tax receipts & must
carry the costs.
Borrowing from National Loan Fund Grant Power to Scottish Parliament Yes Limit set by UK Parliament £300m
Borrowing subject to UK agreement
Establish a Cash Reserve Grant Power to Scottish Parliament Yes Limit set by UK Parliament £125m
Borrowing subject to UK agreement
Scottish Block Grant Up if Scots Income Tax receipts rise
faster than the UK’s. Down if Scots
Income Tax recpts rise more slowly.
Proposed. Potentially catastrophic if
oil prices fall. Should be counter
cyclical if oil price falls - but isn’t.
Potential to collapse the Scottish
Economy when oil prices fall and
expand the economy when they rise.
Benefits Spending (Except Pensions) T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
9. Powers over Spending Proposal Power Transferred Power Reserved
28 Universal credit: supplementary Watered Down Changes have to be approved by
both houses of UK Parliament.
(9) Regulations under this section
must be made by statutory
instrument. (10) A statutory
instrument containing regulations
under this section may not be
made unless a draft of the
instrument has been laid before and
approved by a resolution of each
House of Parliament.
Bedroom Tax T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
New Benefits Power to create new Benefits Yes None, not subject to benefits cap
Housing Benefits T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Crisis Loans T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Community Care Grants T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Attendance Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Carer’s Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Disability Living Allowance (DLA) T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change
Personal Independence Payt (PIP) T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change
Industrial Injuries Disabilities Allow T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Severe Disablement Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Cold Weather Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
10. Powers over Spending Proposal Power Transferred Power Reserved
Funeral Grant T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Maternity Grant T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Winter Fuel Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Discretionary Housing Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to
agree changes in Scotland
Cost of Renewables
decommissioning
T/f Power to Scottish Parliament Yes Barnett Formula not adjusted for
change & potentially huge cost
Energy Efficiency T/f Power to Scottish Parliament Yes How to Pay for it - Reserved
50 Fuel poverty: support schemes Power Restricted The power of the Scottish Ministers
under section 9 does not include
power to make provision in relation
to the subject matter of sections 88
to 90 of the Energy Act 2008 (smart
meters).
Fuel Poverty T/f Power to Scottish Parliament Yes How to Pay for it - Reserved
50 Fuel poverty: support schemes Power Restricted The Scottish Ministers may not make
regulations under The Energy Act
2010 S9 unless—
(a) they have consulted the
Secretary of State about the
proposed regulations, and
(b) the Secretary of State has agreed
to the regulations being made.
(5) Subsection (1) does not prevent
the Secretary of State making a
support scheme in relation to
Scotland under section 9, or varying
or revoking regulations made by the
Scottish Ministers under that
11. section,—
(a) with the agreement of the
Scottish Ministers, or
(b) without their agreement, if
subsection (6), (8) or (10) applies.
(12) Where the Secretary of State
makes a scheme in accordance with
subsection (5), section 14(5) does
not prevent the Secretary of State,
by regulations under section 9,
revoking any scheme made by the
Scottish Ministers so far as it is
inconsistent with the scheme made
by the Secretary of State.”
12. Powers over Economy Proposal Power Transferred Power Reserved
Macroeconomic Policy No transfer of Power None All areas Reserved
Interest Rate setting No transfer of Power None All areas Reserved
Competition Policy - CMA No transfer of Power Will have right to consultation and to
request Enquiries and full CMA
Phase II Investigations
Some Changes
55 References to Competition and
Markets Authority
No transfer of Power. Sec of State
has to agree to any request by
Scottish Ministers for Enquiry. Sec of
State therefore has a right of veto.
Only right to consultation. Enquiries and full CMA Phase II
Investigations can only be initiated
by joint agreement of Scottish
Ministers and Sec of State.
Regulation of Energy - OFGEM No transfer of Power Will have right to consultation and to
request Enquiries and full CMA
Phase II Investigations
Some Changes
58 Bodies that may be required to
attend before the Parliament
Right to call OFGEM before the
Scottish Parliament
Right to make OFCOM explain and
justify their actions.
All powers over OFGEM’s activities
Renewable energy incentives
ROCs, FITs, RHIs
No transfer of Power None, will have right to be consulted All areas Reserved
53 Renewable electricity incentive
schemes: consultation
No transfer of Power – Watered
down to not even having to consult
the Scottish Ministers on the
removal of all schemes of support
for Renewables in Scotland.
None Scotland Act 1998 new S90C
Renewable electricity incentive
schemes: consultation
(1) The Secretary of State must
consult the Scottish Ministers
before—
(a) establishing a renewable
electricity incentive scheme that
applies in Scotland, or
(b) amending such a scheme as it
relates to Scotland. Subsection (1)
does not require the Secretary of
State to consult the
Scottish Ministers about any levy in
connection with a renewable
electricity incentive scheme. In this
13. section a “renewable electricity
incentive scheme” means any
scheme, whether statutory or
otherwise, that provides an
incentive to
generate, or facilitate the
generation of, electricity from
sources of
energy other than fossil fuel or
nuclear fuel.
This includes provision made by or
under the following so far as they
relate to the generation of electricity
from sources of energy other than
fossil fuel or nuclear fuel—
(a) sections 6 to 26 of the Energy Act
2013 (contracts for difference);
(b) sections 41 to 43 of the Energy
Act 2008 (feed-in tariffs for
smallscale
generation of electricity);
(c) sections 32 to 32Z2 of the
Electricity Act 1989 (renewables
obligations or certificate purchase
obligations).
Regulation of Telecoms - OFCOM No transfer of Power Will have right to consultation & to
appoint 1 OFCOM Board Member
UK Secretary of State can veto Board
Appointment
Borrowing Limits No transfer of Power None All areas Reserved
Power to create Enterprise Zones No transfer of Power None All areas Reserved
Appoint Rail Operator T/f Power to Scottish Parliament Yes when next renewed None, can be a public sector firm
49 Rail: franchising of passenger
services
T/f Power to Scottish Parliament Yes when next renewed None, can be a public sector firm
14. Legal & Political Powers Proposal Power Transferred Power Reserved
Defence No transfer of Power None All areas Reserved
Foreign Affairs No transfer of Power None All areas Reserved
The Constitution No transfer of Power None All areas Reserved
Immigration & Asylum No transfer of Power None All areas Reserved
Broadcasting No transfer of Power None, right to consult re BBC Charter
MoU to govern operations of BBC
All areas Reserved
Broadcasting Watered Down No Consultation or MoU in Bill All areas Reserved
Equality Act 2010 No transfer of Power None All areas Reserved
Special Immigration Appeals Cttee No transfer of Power None All areas Reserved
Proscribed Organisns. Appeals Cttee No transfer of Power None All areas Reserved
Pathogens Access Appeals Cttee No transfer of Power None All areas Reserved
Investigatory Powers Tribunal No transfer of Power None All areas Reserved
Votes for 16-17 Year Olds T/f Power to Scottish Parliament Parl & Council Elections in Scotland Reserved for UK & EU Elections
Payday Loans Shops T/f Power to Scottish Parliament Yes None
Fixed Odds Betting Shops T/f Power to Scottish Parliament Yes None
45 Gaming machines on licensed
betting premises
Watered Down Only new betting shops will be under
Scottish Minister’s regulation.
(6) The amendments made by this
section do not apply in relation to a
betting premises licence issued
before this section comes into force.
45 Gaming machines on licensed
betting premises
Watered Down -T/f Power to
Scottish Ministers for gaming
machines for which the maximum
charge for use is over £10. This only
applies to new premises post
enactment of the Bill and not to
existing premises where the Sec of
State remains the authority.
Power T/f to the Scottish Ministers,
so far as, in the case of a betting
premises licence in respect of
premises in Scotland and not in
respect of a track, the order varies—
(i) the number of gaming machines
authorised for which the maximum
charge for use is more than £10, or
(ii) whether such machines are
authorised;
Section 172 of the Gambling Act
2005 (gaming machines) amended
Other than stated (left), the
Secretary of State remains the
authority. Regulations made by the
Scottish Ministers under a provision
specified in subsection (4), or under
section 285, and an order made by
the Scottish Ministers under section
172, shall be subject to the
affirmative procedure.
Any other regulations made by the
15. Scottish Ministers under a provision
of this Act shall be subject to the
negative procedure.”
Social Security Tribunal T/f Power to Scottish Parliament Yes None
33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised
restricted or removed by an Order in
Council.
(5) An Order in Council under this
paragraph may make any provision
which Her Majesty considers
necessary or expedient for the
purposes of or in consequence of the
transfer of the function and its
exercise by the Scottish tribunal.
Criminal Injuries Tribunal T/f Power to Scottish Parliament Yes None
33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised
restricted or removed by an Order in
Council.
(5) An Order in Council under this
paragraph may make any provision
which Her Majesty considers
necessary or expedient for the
purposes of or in consequence of the
transfer of the function and its
exercise by the Scottish tribunal.
Information Rights Tribunal T/f Power to Scottish Parliament Yes None
33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised
restricted or removed by an Order in
Council.
(5) An Order in Council under this
paragraph may make any provision
which Her Majesty considers
necessary or expedient for the
purposes of or in consequence of the
transfer of the function and its
exercise by the Scottish tribunal.
Power over Road Speed Limits T/f Power to Scottish Parliament Yes None
36 Roads: speed limits Transfer of Powers Restricted Joint Exercise by Sec of State and/or
Scottish Ministers
Road Traffic Regulation Act 1984
S81(3) An order under subsection
(2)—(a) if made by the Secretary of
State, is to be made by statutory
instrument and approved by a
16. resolution of each House of
Parliament;
(b) if made by the Scottish Ministers,
is subject to the affirmative
procedure.
Power over Road Signs T/f Power to Scottish Parliament Yes None
35 Roads: traffic signs etc Transfer of Powers Restricted Joint Exercise by Sec of State and/or
Scottish Ministers
Road Traffic Regulation Act 1984
Section 65 (powers of traffic
authorities as to placing of traffic
signs)
(3ZA) The power of the Scottish
Ministers to give general directions
under subsection (1) is to be
exercisable by Scottish statutory
instrument.
(3ZB) Before giving a general
direction under subsection (1) the
Secretary of State must consult with
the Scottish Ministers.
(3ZC) Before giving a general
direction under subsection (1) the
Scottish Ministers must consult with
the Secretary of State.”
35 Roads: traffic signs etc Transfer of Powers Restricted Joint Exercise by Sec of State and/or
Scottish Ministers
The Road Traffic Act 1988 S36
(offence of failing to comply with
traffic sign) (6) Before making
regulations under subsection (5) the
Secretary of State must consult with
the Scottish Ministers.
(7) Before making regulations under
subsection (5) the Scottish Ministers
must consult with the Secretary of
State. In section 195 (regulations)
17. (4ZA) Regulations made by the
Scottish Ministers under section
36(5) are subject to the negative
procedure.
British Transport Police T/f Power to Scottish Parliament Yes None, but who gets VAT on spend?
18. Observations on Smith’s Proposals
Under Chapter 2: Fiscal framework on Page 33 we are told that:
“The Scottish Government will not therefore be isolated from all risks, so will need tools to manage
appropriate risks. If Scotland experiences an economic shock when the rest of the UK does not, the
funding model would not provide the Scottish Government with additional to offset its lower tax
receipts or higher spending pressures”
We are also told:
“Borrowing could be undertaken to respond to a shock, but a clear plan will be needed to repay the
debt incurred in order to ensure a sustainable fiscal position”
Remember, we were told above that if Scotland’s share of income taxes for the whole UK falls we
will see a cut in our share of the Barnett Formula grant. This is hardly a hypothetical position, it is
precisely where we are now. If oil prices fall jobs in Scotland would be lost. The UK as a whole would
benefit from a fall in oil & gas prices, these would boost company profits and wages in the rest of the
UK. In Scotland, our share of income tax receipts would fall. In the event of a crisis in Scotland, the
UK’s “Enduring Settlement” could well make things worse. A cut to Barnett formula funding for
Scotland would follow our fall in income tax receipts. Nor would we be able to borrow more without
permission, nor would we be able to alter any other taxes in response to the crisis.
Observations on the Draft Bill
I’m an anorak, but even I found it impossible to follow what was being proposed for the Welfare part
of the Bill. The draft refers to “Exceptions” but I wasn’t able to deduce from the text whether or not
powers to create new benefits or to enhance old ones had been granted or whether this was
another area where Westminster has backtracked on Smith. We need to see the new text as
amended by the Scotland Bill to see what is being done. This isn’t available.
I had not considered it likely that I would spend so much time on road signs. It seems the Scottish
Parliament won’t be able to erect a road sign in a country with the “strongest devolved government
anywhere in the world” without asking for permission from Westminster.
A Quiver Full of Arrows
What then am I sure of? Westminster has written this Bill in the spirit of a victor handing down
terms to a defeated opponent who has unconditionally surrendered following a shattering defeat.
We can see many arrows remaining in the Westminster quiver and will consider each of them in
turn.
Shaft 1
Many areas require the agreement of the UK Secretary of State prior to any Scottish
Parliament Bill becoming law. If they don’t agree the proposed measure will fall.
Shaft 2
Many areas require the passing of a UK Statutory Instrument which the UK Parliament may
or may not have time to consider. Often it won’t have time....
Shaft 3
Some areas require the approval of both Houses of the UK Parliament before they can be
enacted. Often these houses won’t have time....
Shaft 4
In some areas Scottish legislation can be overturned by a UK Order in Council.
19. Shaft 5
In some devolved areas Model Clauses will be imposed by the UK Parliament
Shaft 6
In public appointments the Secretary of State can overrule Scottish Ministers
Shaft 7
The Secretary of State can revoke any Scottish scheme to tackle Fuel Poverty if they don’t
like it.
Shaft 8
Powers to tackle gambling can only be used for new licences. All existing licensed gambling
venues will be ultra vires.
Shaft 8
Powers which were to come to the Scottish Parliament under Smith are often now to be
joint powers shared between Scottish Ministers and their UK equivalents.
It is a veritable quiver full of arrows designed to thwart the aspirations of the people of Scotland and
to leave ultimate control in most areas with the UK Parliament in Westminster.
Conclusion
It is delusional given the diminutive nature of the powers over the economy transferred under this
settlement to suggest that this formula will be one which endures. The fault is not Lord Smith’s. He
was there to act as a cipher for the political parties round the table. He did his job. What was put
together essentially reflects the views of the Con-Dem-Lab coalition for a “No” vote. Having won
they were unwilling to enhance the powers of the Scottish Parliament in any material way. Faced
with the threat from the three amigos to walk away if their view didn’t prevail the SNP and the
Greens got the best deal they could in the circumstances. That it isn’t what the public expected or
wanted is clear from the SNP’s membership quadrupling since the referendum. We are left with a
Parliament which has lots of control over spending but little say on how taxes are set and the money
raised to pay for it. Few things can be changed without a consequence for the Barnett Formula
negating them. Yet again, power devolved is power retained.
We’ve often heard the argument made that the pro-Unionist parties fear a “Neverendum” more
than anything. Clearly this can’t be the case. If it was they’d have given the people of Scotland what
they asked for and expected, proper Fiscal Federalism with powers over “tax” as well as over
“spend”. Devo-Max this settlement ain’t. The LibDems and Labour’s “No” coalition participants are
now regretting their lack of magnanimity in victory. They were grallached at the polls.
The Draft Bill waters Smith down in many ways. We’ve identified eight shafts in Westminster’s
quiver full of arrows all designed to show who won. Each shaft brings independence nearer. Proper
Home Rule will not be long delayed.
Derek W Louden
Abbian House
Tower Street
Tain
Ross-shire IV19 1DY
Tel: 01862 892734
Mob: 07876 774412
Email: LoudenDW@aol.com