The Smith Commission, set up to consider the devolution of more powers to the Scottish Parliament, has published a report containing the ‘Heads of Agreement on further devolved powers that have been agreed on by the main political parties. Thousands of individuals and organisations responded to the Commission’s request for views on further devolved powers. The agreement covers a number of key areas, including elections and parliamentary processes, welfare benefits, income tax and VAT and an updated fiscal framework for Scotland.
Some commentators have expressed satisfaction with the contents of the report, while others are disappointed and say that they do not go far enough. Nevertheless there are some significant new powers that the Scottish Parliament will be able to use to implement some of the reforms viewed as necessary for modern Scotland. Control over disability benefits, employability programmes, the Social Fund and certain elements of Universal Credit will be devolved to the Scottish Parliament. There will also be powers to create new benefits in devolved areas. Campaigners have expressed disappointment that other powers over welfare were not included in the agreement – sanctions and conditionality will remain.
The following sets out the main devolved powers and those that have been retained by the UK Government:
Elections and Parliamentary Processes
- Power over Scottish and local government elections
- Power over the number of MSPs, or numbers of constituency and list MSPS and decisions over disqualification and removal
- Extension of voting rights to 16 and 17 year olds in Scottish and local government elections
- Power over campaign spending limits and party political broadcasts
- Scottish Parliament made permanent by UK legislation
- Sewel Convention will be put on a statutory footing
- Reform of inter-governmental machinery and scaled up significantly
- Formal processes for the Scottish and UK Parliaments to collaborate more regularly and hold each other to account in areas of joint interest.
Welfare Benefits and Employment Programmes
- Attendance Allowance
- Carer’s Allowance
- Disability Living Allowance
- Personal Independence Payments
- Industrial Injuries Disablement Allowance and
- Severe Disablement Allowance
Benefits which currently comprise the Regulated Social Fund. There will be complete autonomy over the structure and value of the following benefits:
- Cold Weather Payment,
- Funeral Payment,
- Sure Start Maternity Grant
- Winter Fuel Payment,
- Discretionary Housing Payments
- New arrangements for Motability will be agreed between Governments
- Following the end of existing commercial contracts, responsibility for these, including the Work Programme, will devolve to the SP.
- The Scottish Parlliament will be given the administrative power to change the frequency of UC payments, vary the existing plans for single household payments, and pay landlords direct for housing costs in Scotland.
- The Scottish Parliament will have the power to vary the housing cost elements of UC, including varying the under-occupancy charge and local housing allowance rates, eligible rent, and deductions for non-dependents.
New benefits and top-up of reserved benefits
- The SP can create new benefits in areas of devolved responsibility, and will have powers to top-up reserved benefits.
- Any new benefits or discretionary payments introduced by the Scottish Parliament must provide additional income for a recipient and not result in an automatic offsetting reduction in their entitlement to other benefits or post-tax earnings if in employment.
- All other aspects of Universal Credit including conditionality and sanctions
- State Pension
- Bereavement Allowance
- Bereavement Payment
- Child Benefit
- Guardian’s Allowance
- Maternity Allowance
- Statutory Maternity Pay
- Statutory Sick Pay
- Widowed Parent’s Allowance
Tax, National Insurance
- Control over income tax rates and thresholds, excluding savings and dividend income. All other aspects, including the Personal allowance will remain reserved
- First 10% of VAT receipts
- Aggregates Levy
- Air Passenger Duty
- National Insurance
- Inheritance Tax and Capital Gains Tax
- Corporation Tax
- Taxation of oil and gas receipts
- Fuel duty
- Excise duty
Updated Fiscal Framework for Scotland
- Continuation of Barnett Formula
- Economic responsibility – full benefits from policy decisions that increase budgets or reduce expenditure and full costs of these decisions should they reduce revenues
- No detriment as a result of the decision to devolve further power
- No detriment as a result of UK Government or Scottish Government policy decisions post-devolution
- Sufficient additional borrowing powers to reflect risks, including the volatility of tax revenues and withstand economic shocks and to support capital investment.
- The Equality Act 2010 will remain reserved, however, the SP can introduce gender quotas in public bodies and legislate with respect to socio-economic rights in devolved areas.
Health and Social Affairs
- Discussions between respective Parliaments over the devolution of legislation governing abortion will take place.
- There will be devolution of the management and operation of reserved tribunals, excepting the Special Immigration Appeals Commission and the Proscribed Organisations Appeals Commission.
Energy Efficiency and Fuel Poverty
- Some powers over how the Energy Company Obligation and Warm Home Discount are designed and implemented will be devolved.
- Onshore oil and gas extraction licensing will be devolved, however, offshore will remain reserved.
- All other energy matters, including security of supply, will remain reserved.
Newspaper reports have claimed that more welfare proposals, which were included in the draft report, were sheleved and that Work and Pensions Secretary, Iain Duncan Smith, blocked proposals to give Scotland more flexibility over additional elements of Universal Credit, which will replace a number of current welfare benefits when it begins to be rolled out across the UK from 2015. The SNP and Labour parties are both disputing claims, made by each other, that they attempted to water-down proposals for further powers on welfare. It is also claimed that a number of other proposals were shelved at the last minute.