The Implementation of the Smith Agreement - Scottish Affairs Contents

1  The path to further devolution

1. On 18 September 2014, Scotland held a referendum on the question "Should Scotland be an independent country?". 55.3% of voters cast their ballot in favour of remaining part of the United Kingdom. The turnout was a remarkable 84.6%.

2. In the lead up to the referendum the three largest UK political parties pledged to devolve further powers to the Scottish Parliament in the event of separation being rejected.[1] The day after the referendum the Prime Minister invited Lord Smith of Kelvin to set up a commission to take forward that commitment and produce specific recommendations for the devolution of further powers.[2] In this Report we focus on the recommendations of the Smith Commission, particularly those on taxation and welfare, and the work of the UK Government in transposing those recommendations into draft legislation.[3]

The Smith Commission

3. The terms of reference for the Smith Commission were as follows:

    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]

The Smith Commission consisted of 11 members; in addition to Lord Smith each of the five political parties with seats in the Scottish Parliament nominated two representatives to take part.[5] The Commission heard representations from political parties, civic institutions and members of the public.[6] The Report of the Smith Commission for further devolution of powers to the Scottish Parliament (hereafter referred to as the Smith Agreement)[7] was published on 27 November 2014. Lord Smith confirmed to us that "all five parties signed up to every word that is in that document".[8] For the political parties to find unanimity from the range of views with which they entered the process is a significant outcome and we congratulate them and Lord Smith on their achievement.

4. Amongst the recommendations put forward by the Smith Commission were proposals for the Scottish Parliament and Government to be made permanent,[9] for the Scottish Parliament to have increased powers over taxation and spending, including the power to set income tax rates and bands[10] and the ability to create new benefits in devolved areas and make discretionary payments in any area of welfare,[11] and for the voting age in Scottish elections to be extended to include 16 and 17 year olds.[12]

5. On 22 January 2015, the UK Government published draft legislative clauses, which make provision for those measures included in the Smith Agreement which require legislative change. In the Command Paper accompanying the draft clauses,[13] the UK Government, as well as providing background information on the clauses, also discusses those areas of the Smith Agreement that do not require legislation, most notably the requirement for a new fiscal framework for Scotland. The new framework must meet the Smith Agreement's principle of "no detriment", i.e. that neither Government should suffer financially as a result of the new settlement. However, while the Command Paper discusses the implications of such a principle it stops short of offering a definite answer on this most crucial of issues.

6. The three main UK political parties have committed to take forward the draft clauses, as part of a new Scotland Bill after the General Election in May 2015. Such a Bill would make legal provision to enable the powers proposed by the Smith Commission to be devolved to the Scottish Parliament to a timetable agreed by the two Governments. One aspect of the Smith Agreement is being progressed outside of this timetable via a Section 30 Order. The legislative power to allow 16 and 17 year olds to vote in future Scottish Parliament elections

is expected to be transferred from the UK Parliament to Holyrood in March 2015.[14] The separate timetable was agreed by both the UK and Scottish Governments as an exception from the rest of the Smith Agreement, so that the power could be devolved in time for 16 and 17 year olds to vote in the 2016 Scottish Parliament elections.

1   During the referendum campaign each of the main UK parties promised to deliver further powers to Scotland in the event of a no vote. This culminated in a 'vow', signed by the Leaders of the Conservative, Labour and Liberal Democrats parties, which was published on the front page of the Daily Record newspaper on 15 September 2014. Back

2   HM Government Press Release, Scottish Independence referendum: statement by the Prime Minister, 19 September 2014 Back

3   For analysis of the constitutional elements of the Smith Agreement see the work of the Political and Constitutional Reform Committee. Back

4   Smith Commission Press Release, Lord Smith of Kelvin announces details of his Commission at the Scottish Parliament, 23 September 2014  Back

5   The SNP was represented by Scottish Finance Secretary John Swinney MSP and Linda Fabiani MSP. Scottish Labour put forward finance spokesman Iain Gray MSP and shadow work and pensions minister Gregg McClymont MP. Former Scottish Conservative leader Annabel Goldie represented her party, alongside Adam Tomkins, Professor of Public Law at the University of Glasgow. The Scottish Liberal Democrats were represented by former Scottish Secretary Michael Moore MP and former party leader in the Scottish Parliament, Tavish Scott MSP. The Scottish Green Party's co-leaders, Patrick Harvie MSP and Edinburgh councillor Maggie Chapman, were their representatives on the Commission. Back

6   Over a period of five weeks, over 400 submissions were received from organisations and groups and over 18,000 emails, letters and signatures on petitions from members of the public (source: The Smith Commission website Back

7   Report of the Smith Commission for further devolution of powers to the Scottish Parliament, 27 November 2014, hereafter referenced as The Smith Agreement. Back

8   Q1 Back

9   The Smith Agreement, para 21 Back

10   The Smith Agreement, para 76 Back

11   The Smith Agreement, para 54 Back

12   The Smith Agreement, para 25 Back

13   HM Government, Scotland in the United Kingdom: an enduring settlement, Cm 8990, 22 January 2015  Back

14   HM Government News Story, UK Government to fast-track Holyrood votes for 16-17 year olds, 19 January 2015; The draft order will give the Scottish Parliament the power to legislate to reduce the minimum voting age to 16 at elections to the Scottish Parliament and to Scottish local government elections. See also HL Deb, 26 February 2015, Col 1766 and the Constitution Committee of the House of Lords Ninth Report of Session 2014-15, Draft Scotland Act 1998 (Modification of Schedules 4 and 5 and Transfer of Functions to the Scottish Ministers etc.) Order 2015, HL 119 Back

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Prepared 10 March 2015