Constitutional implications of the Government's draft Scotland clauses - Political and Constitutional Reform Contents


Introduction

Background to the inquiry

THE SCOTTISH REFERENDUM AND "THE VOW"

1. On 18 September 2014 a referendum was held in Scotland on the question "Should Scotland be an independent country?" A total of 3,619,915 valid votes were cast: 1,617,989 for "Yes" and 2,001,926 for "No". The margin of victory for "No" was 10.6% (55.3% to 44.7%).[1]

2. During the final days of the referendum campaign the leaders of the three major UK pro-union parties made a combined pledge to the Scottish electorate that further powers would be devolved to the Scottish Parliament and Government in the event of a "No" vote. This pledge, which came to be known as "The Vow", was published in a Scottish national newspaper on 16 September 2014.[2]

3. The Labour, Liberal Democrat and Conservative parties in Scotland had all examined the prospects for further devolution in policy commissions and had each previously published their proposals for further transfers of power to Holyrood.[3] The Vow in effect committed the parties to working together to an agreed timetable to agree proposals for further devolution in the event of a "No" vote.

4. To reinforce the commitments in The Vow, the Prime Minister, the Deputy Prime Minister, the Leader of the Opposition, Rt Hon Alistair Darling, leader of the Better Together campaign, and the former Prime Minister Rt Hon Gordon Brown MP tabled the following motion:

    That this House welcomes the result of the Scottish independence referendum and the decision of the people of Scotland to remain part of the United Kingdom; recognises that people across Scotland voted for a Union based on the pooling and sharing of resources and for the continuation of devolution inside the United Kingdom; notes the statement by the Prime Minister, Deputy Prime Minister and Leader of the Opposition regarding the guarantee of and timetable for further devolution to Scotland; calls on the Government to lay before Parliament a Command Paper including the proposals of all three UK political parties by 30 October and to consult widely with the Scottish people, civic Scotland and the Scottish Parliament on these proposals; and further calls on the Government to publish heads of agreement by the end of November and draft clauses for the new Scotland Bill by the end of January 2015.

Though issues of devolution after the referendum have been debated in Government and backbench time, as well as on the adjournment, on a number of occasions since the result of the Scottish referendum, this motion has not been put before the House for debate.

THE SMITH COMMISSION

5. Following the "No" vote in the referendum, the Prime Minister invited Lord Smith of Kelvin to convene a commission (known as the Smith Commission). Lord Smith was given the following remit:

    To convene cross-party talks and facilitate an inclusive engagement process across Scotland to produce, by 30 November 2014, Heads of Agreement with recommendations for further devolution of powers to the Scottish Parliament. This process will be informed by a Command Paper, to be published by 31 October and will result in the publication of draft clauses by 25 January. The recommendations will deliver more financial, welfare and taxation powers, strengthening the Scottish Parliament within the United Kingdom.[4]

6. The Government's Command Paper, summarising the policy proposals already published by the three pro-union parties, was issued on 13 October 2014.[5] It also made reference to the proposals of the Scottish Government, endorsed by the Scottish National Party, and of the Scottish Green Party—both of which parties had agreed to participate in the Smith Commission process.

7. Lord Smith's Commission completed its work and published the Smith Commission Agreement, giving heads of agreement on the further powers to be devolved, on 27 November 2014. This was intended to embody a brokered position on which draft legislation could be based.

8. Lord Smith argued in his foreword to the Agreement that the new powers recommended by the Commission would make devolution "more responsive, durable and stable". He claimed that enhanced powers would strengthen the Scottish Parliament's ability "to pursue its own vision, goals and objectives," and would be accompanied by greater responsibility and accountability.[6]

9. The Agreement comprised three pillars, the first of which was "providing a durable but responsive constitutional settlement for the governance of Scotland".[7] The constitutional aspects of the Agreement were as follows:

·  UK legislation to state that the Scottish Parliament and Government are permanent institutions;[8]

·  a statutory footing for the Sewel Convention,[9] under which the UK Government does not normally invite Parliament to legislate on Scottish devolved matters without the consent of the Scottish Parliament;

·  devolution of all powers over elections to the Scottish Parliament and local authorities[10]—subject to a requirement for the Scottish Parliament to vote in favour of any changes to its franchise and electoral system by a "super-majority" of at least two-thirds of the Parliament;[11]

·  devolution of relevant powers in sufficient time to allow the Scottish Parliament to extend the franchise to 16- and 17-year-olds for the 2016 Scottish Parliament elections;[12] and

·  devolution of all powers over the arrangements and operations of the Scottish Parliament and Government, including:

o  powers over the overall number of Members of the Scottish Parliament or the number of constituency and list MSPs (subject to a super-majority requirement);[13] and

o  powers over the disqualification of MSPs from membership and the circumstances in which a sitting MSP can be removed.[14]

THE DRAFT BILL CLAUSES AND THE LEGISLATIVE TIMETABLE

10. On 22 January 2015 the Government published a further Command Paper which set out its policy on implementing the Smith Commission Agreement and which contained draft clauses to show how the measures included in the Agreement "would look in law".[15] Part 1 of the draft clauses (clauses 1-9) relates to the Smith Commission Agreement's Pillar 1.

11. The Government has acknowledged that "further work will be required so that the clauses are ready for introduction into Parliament in a Scotland Bill. [This work] will include the production of the usual documents and material that accompany a Bill on introduction."[16]

12. The draft clauses, taken together, represent a major change to the United Kingdom's constitutional arrangements: they provide for very substantial devolution of powers over income tax and welfare to the Scottish Parliament, assignment to the Scottish Government's budget of the first ten percentage points of all VAT raised in Scotland, a wholesale revision of the fiscal framework for Scotland within the UK, and new borrowing powers for the Scottish Government. As the Secretary of State for Scotland put it in his foreword to the Command Paper: "The Scottish Parliament will have one of the most extensive arrays of tax and spending powers of any devolved parliament in the developed world. The devolution of powers relating to disability and housing payments-and the ability to create new welfare payments-will deliver a Scottish welfare system with a starting value of around £2.5 billion a year."[17]

13. The Government made no specific provision for pre-legislative scrutiny of these clauses by parliamentary committees, nor has there been sufficient time for a thorough examination in Parliament of the implications of the Smith Commission proposals for the future shape of the United Kingdom. Once the outcome of the referendum result was known, we undertook an inquiry into the future of devolution in the UK, though it has been beyond the scope of that inquiry, given the time available at the end of the Parliament, to consider the full consequences for the UK of the detailed proposals made for further devolution to the Scottish institutions. As far as we are aware there has been no examination of the overall consequences for the UK constitution of the implementation of the Smith Commission Agreement, and no process—apart from the consideration of legislation—for the UK Parliament to assess the overall effect of the proposals on the Union.

14. The Scotland Office has established a stakeholder group, and the Secretary of State has announced that "the Government will seek to bring together a wide forum of stakeholders to ensure that the clauses are given full consideration ahead of introduction."[18] The Government intends that a Bill to give effect to the Smith Commission Agreement should be introduced very early in the new Parliament: the Parliamentary Under-Secretary of State for Scotland, Rt Hon David Mundell MP, told us that the legislation "will be brought forward regardless of who is in Government after the general election".[19]

15. Given the urgency which the Government has attached to the legislation for further devolution to the Scottish Parliament, and the commitments already made to the people of Scotland, we must assume that there will be no opportunity for the new Parliament to undertake pre-legislative scrutiny of its proposed provisions. While we welcome the Government's commitment to give the draft Scotland clauses some measure of consideration ahead of their introduction in such a Bill, we find it disappointing that no attempt has been made to provide for full and formal pre-legislative scrutiny of the clauses by this Parliament before its dissolution.

16. The draft clauses will have significant consequences for the future of the United Kingdom. While we acknowledge the political imperatives which led the UK pro-Union parties to make commitments for further devolution to a swift timetable, we are concerned that this seems to have been at the expense of broader consideration of the implications of these commitments for the future of the UK. Parliament's first significant engagement with these proposals will be when they are introduced as a Scotland Bill. It is not clear to us that the legislative process is the most effective means for Parliament to consider the future shape of the Union.

Our inquiry

17. We resolved to undertake pre-legislative scrutiny of the draft clauses which concern issues of political and constitutional reform. Our colleagues on departmental select committees have similarly been examining aspects of the draft clauses relevant to their respective remits. We announced the inquiry on 22 January 2015, the day the draft clauses were published, and invited interested parties to consider the following questions:

·  Are the proposals of the Smith Commission and the UK Government in respect of the constitutional arrangements for further devolution to Scotland, as set out in the draft clauses, sound? If not, how could the draft clauses be improved?

·  Do the provisions of the draft clauses deliver the policy intentions of the Smith Commission and UK Government? Could the wording of the draft clauses be improved or changed?

  1. Oral evidence relevant to the inquiry was taken in three sessions,[20] and we received twelve memoranda. The witnesses from whom we took oral evidence are listed at page 40 and the memoranda received are listed at page 41. We are very grateful to all those who gave oral and written evidence to our inquiry.



1   Figures provided by the Electoral Management Board for Scotland at www.electionscotland.info. Back

2   "The Vow", The Daily Record, 16 September 2014 Back

3   Scottish Conservatives, Commission on the Future Governance of Scotland, May 2014; Scottish Liberal Democrats: Federalism: the best future for Scotland, October 2012; Scottish Labour Party, Powers for a purpose - Strengthening Accountability and Empowering People, March 2014 Back

4   www.smith-commission.scot/about/ Back

5   Scotland Office, The parties' published proposals on further devolution for Scotland, Cm 8946, October 2014 Back

6   Report of the Smith Commission for the future devolution of powers to the Scottish Parliament, November 2014, p 4 Back

7   Ibid., para 16 Back

8   Ibid., para 21 Back

9   Ibid., para 22 Back

10   Ibid., para 23 Back

11   Ibid., para 27 Back

12   Ibid., para 25 Back

13   Ibid., para 27 Back

14   Ibid., para 26 Back

15   Scotland Office, Scotland in the United Kingdom: An enduring settlement, Cm 8990, January 2015, p 11 Back

16   Ibid., pp 11-2 Back

17   Ibid., pp 7-8 Back

18   Scotland Office, Scotland in the United Kingdom: An enduring settlement, Cm 8990, January 2015, para 9.4.5 Back

19   Oral evidence taken on 3 March 2015, HC (2014-15) 700-ix, Q539 Back

20   In addition to two oral evidence sessions specifically relating to the constitutional implications of the draft Scotland clauses, the witnesses for which are listed at page 40, the Committee also questioned government ministers about the draft clauses in an oral evidence session relating to the Committee's broader inquiry on the future of devolution after the referendum (Oral evidence taken on 3 March 2015, HC (2014-15) 700-ix, Q539). At this session the Committee took evidence from Rt. Hon Greg Clark MP, Minister of State for Universities, Science and Cities, Cabinet Office, Rt Hon David Mundell MP, Parliamentary Under-Secretary of State for Scotland, and Baroness Randerson, Parliamentary Under-Secretary of State for Wales. Back


 
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Prepared 22 March 2015