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Devolution – delivering our promise

Devolution – delivering our promise

The UK Government has published a command paper with draft clauses on further devolution for Scotland. We promised to provide draft legislation on new powers for the Scottish Parliament before the end of January and we have now published that legislation ahead of schedule. Read the command paper.

This draft legislation will implement the historic all party agreement reached in November by the Smith Commission. For the first time ever, all Scottish political parties have agreed what devolution should look like.

This all-party agreement strikes the right balance and gives Scotland the best of both worlds.  A strong Scotland, with its own identity and its own powers – all within the safety and security of the UK. The debate now moves on to how these powers are used.

Alistair Carmichael, Secretary of State for Scotland said ‘it was an agreement which was built to last’ and said it ‘struck the right balance of powers for Scotland as part of the UK’.

What’s in the command paper

The draft clauses in the command paper are the building blocks of a Bill, which shows how the measures included in the Smith Agreement would look in law. Set out below are some of the main points.

The constitution

UK legislation will state that a Scottish Parliament and Scottish Government are permanent parts of the UK’s constitutional arrangements. The Scottish Parliament will be given wide-ranging new powers over how they are elected and run. The Scottish Parliament is already being given the power to legislate to reduce the voting age to 16 for Scottish Parliament and Scottish local government elections in 2016.

Welfare

The Scottish Parliament will have the power to legislate for discretionary payments to people in any area of welfare. In addition the Parliament will be able to set the rules about a wide range of benefits which affect carers and disabled people and create employment schemes to assist those at risk of becoming long-term unemployed.

The Scottish Government will also be able to vary the frequency of Universal Credit payments and vary the housing costs calculation within Universal Credit.

Income Tax

The Scottish Parliament will have the power to set Income Tax thresholds and rates on the money we earn, except for tax on savings and dividends – things like ISAs, for example. Revenue raised in Scotland will remain in Scotland.

VAT

The Scottish Government will keep the first ten percentage points of the standard rate, and the first 2.5 percentage points of the reduced rate of VAT receipts collected in Scotland – that’s currently 50% of those revenues.

Air Passenger Duty

The Scottish Parliament will take control of the amount of tax paid by air travellers leaving Scotland.

Aggregates Levy

The power to tax companies involved in extracting aggregates – minerals used in the construction industry – in Scotland, will be devolved to the Scottish Parliament.

Borrowing

From April this year, the Scottish Government will be able borrow an additional 10% of its capital budget every year – in 2015/16 that would be around £300 million. Additional borrowing powers will need to be agreed between the UK and Scottish Governments.

Crown Estate

Responsibility for management of the Crown Estate’s wholly owned economic assets, including the seabed, and the revenue they generate will be devolved to the Scottish Parliament. Following that transfer, we expect that management of the assets will be further devolved to local authorities like Orkney, Shetland and others who seek such responsibilities, in line with the Smith Commission Agreement.

The UK and Scottish Governments will draw up a Memorandum of Understanding to ensure these measures are not detrimental to the defence, security and infrastructure of the UK as a whole. There will also be provisions in the draft legislation to safeguard UK-wide critical national infrastructure.

Built to last

This is substantial package of powers that is built to last. From the constitution, through to tax and welfare, this package gives the Scottish Parliament new and lasting powers.

Taken together, these measures will make Holyrood one of the most powerful and accountable devolved administrations in the world, with control of 60% of spending and raising over half its revenues

For further information please view the links below:

Next steps

Work will continue to prepare the draft legislation for introduction to Parliament. The main Westminster parties have each committed to introducing a Scotland Bill early in the new Parliament, following the UK general election.

Visit your local branch

IoD Scotland has branches across all of Scotland giving you the opportunity to see what’s on in your area over the coming months.

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Iod.scotland@iod.com

Tel: 0131 557 5488
Fax: 0131 557 5818
10 Charlotte Square
Edinburgh
EH2 4 DR

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