The Conservative government’s Scotland bill

The Scotland Bill has been introduced early, facilitated by the fact the coalition government published draft clauses in January. Alan Trench writes that implements the proposals of the Smith Commission, and although it appears to be a done deal, it is likely to be challenged by the SNP.

This article is taken from the latest edition of the Constitution Unit Monitor, published yesterday.

The new Conservative government got its busy legislative programme off to a quick start by publishing its Scotland bill on 28 May, the day after the Queen’s speech. This bill is a substantial extension of Scottish devolution, following ‘The Vow’ made toward the end of the Scottish referendum campaign last September and the work of the Smith Commission whose recommendations it implements.

Contents of the bill

The bill builds on the ‘draft legislative clauses’ published in January. It shows a significant re-think of some details; it now consists of 64 clauses and two schedules, compared to 44 clauses from the January paper, though the key provisions about welfare and tax devolution are substantively unchanged. On the tax side these provide for devolving the power to set income tax thresholds, rates and bands on earned income, and to assign half of VAT receipts (10 points of normally-rated items and 2.5 points of items rated at 5 per cent).

The welfare side is more complex, but includes provisions to vary elements of Universal Credit, including the timing of payments and the amounts payable for housing; to devolve disability benefits and those relating to the frail elderly (Disability Living Allowance, Personal Independence Payments, Carers Allowance and Attendance Allowance in particular); and a power to make certain discretionary welfare payments. The power to make discretionary payments is more limited than that agreed by the Smith Commission, and Smith’s power to create new benefits is omitted. In these respects, the bill – like January’s Command paper Scotland in the United Kingdom: An enduring settlement – is somewhat narrower than the Smith recommendations.

As important as what is in the bill is what is not. Key elements of the Smith package are non-statutory – in particular, the amounts to be added to the block grant for welfare devolution, the amounts by which it will be reduced to allow for tax devolution and how those will be adjusted, and further changes made reflecting behavioural changes under the ‘no detriment’ rule on which the January Command paper placed heavy emphasis. These will profoundly affect the workability and impact of the Smith package and will be the focus of considerable debate as the bill goes through the parliamentary process. Indeed, they already have been. The Holyrood Devolution (Further Powers) Committee has recently published a lengthy and detailed examination of the draft clauses, as an ‘interim’ report and will continue its scrutiny now the bill has been published. Other Holyrood committees including the Finance Committee are similarly concerned.

Getting the bill through

The bill comes with a fast timetable; the aim is for it to be passed by February 2016, before the Scottish Parliament elections in May. But the bill will need legislative consent from Holyrood under the Sewel convention as well. There may well be considerable brinkmanship about that as well as noisy contributions from the 56 SNP MPs at Westminster, seeking to extend the powers devolved under the bill. One big question for the bill is whether and how the UK government changes the Smith Commission’s proposals to reflect the general election outcome and the SNP’s surge. In reality, there is limited scope to change those – not just because they embody a cross-party consensus in the commission but also because fiscal and welfare devolution are not straightforward. Although ‘full fiscal autonomy’ is sought by the SNP and has some attractions for a Conservative government relying on English support, it is unlikely to be a viable option politically. Not only would it also pose grave practical problems if it were pursued, but given the bill’s long title even probing amendments to raise the issue are likely to be out of order.

Read the Constitution Unit’s full round up of constitutional news from the UK and abroad in Monitor 60 here.

About the Author

Alan Trench is an honorary senior research fellow at the Constitution Unit. He is an academic, non-practising solicitor and close watcher of devolution in the United Kingdom and similar systems around the world.

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