Scotland – Enduring the Scotland Bill

David Cameron and Gordon Brown characterised the debate surrounding Scotland’s referendum as

one between federalism and independence. This was the choice that most people thought they

were making, between a federal UK state with devolution of matters other than Defence and

Foreign Affairs to, in Scotland’s case the Scottish Parliament. David Cameron stated:

"In Scotland our plans are to create the strongest devolved government anywhere in the world, with

important powers over taxation."

http://www.telegraph.co.uk/news/general-election-2015/11593179/David-Cameron-Scotland-will-

be-strongest-devolved-government-in-the-world.html

When we talk about federalism we use the term as meaning fiscal federalism, the control over, most

importantly, taxation with the Scottish Parliament able to alter this to suit the changed

circumstances we find ourselves in over time. Is this what the nation has seen delivered?

A detailed study of the proposals set out in the UK Government’s Command Paper “Scotland in the

United Kingdom – an enduring settlement” follows below looking at what has and has not been

transferred and the limitations placed upon those things which have been transferred:

https://www.gov.uk/government/publications/scotland-in-the-united-kingdom-an-enduring-

settlement

Lord Smith of Kelvin was faced with a short timescale to reach his conclusions. Essentially he had in

front of him a fork in the road. He could head one way and plot out a Devo-Max parliament with full

powers over taxes and spending, the scenario Brown and Cameron were presenting as an alternative

to independence. Such a choice provided an opportunity to reach a settlement which could endure.

That was not the road chosen.

Smith’s chosen route of travel charts a very limited change in the Scottish Parliament’s powers over

taxation. We are given much wider control over the Parliament’s powers to spend. It is a diminutive

version of devolution which I’m happy to Christen “Devo-Dim”. No-one can look at the powers

transferred and conclude that these will endow the Scottish Parliament with the tools it needs to

create a powerhouse economy in an enterprising nation. We can’t even set up an Enterprise Zone.

The choice made has negated our chance of an “Enduring Settlement”.

This update follows the publication of the Scotland Bill 2015 and its Second Reading in the House of

Commons and debate in the House of Lords, during which the following contributions were made:

Lord Forsyth of Drumlean : “All the unionist parties stood on a platform of bringing in the proposals

of the Smith commission and we ended up with three seats out of 59. This is not a credible position; it

has been rejected.”

—[Official Report, House of Lords, 1 June 2015; Vol. 762, c. 194.]

Sir Edward Leigh MP: “I say to the Government that there is such a thing as democracy. The Smith

commission has been rejected. We cannot just plough on regardless. We have to listen to what the

people have said.”

http://www.publications.parliament.uk/pa/cm201516/cmhansrd/cm150615/debtext/150615-0001.htm#15061516000001 The Scotland Bill 2015 can be found at:

http://www.publications.parliament.uk/pa/bills/cbill/2015-2016/0003/16003.pdf

The Bill sets out a series of amendments to the Scotland Act 1998 which has rather unfortunately

been updated several times without the amended Act appearing online. Look for it on the website:

http://www.legislation.gov.uk/ukpga/1998/46/contents

The amendments previously introduced have significantly altered the Act. The new Bill proposes

amendments to an Act which bear no relation to what you find when looking at the online version.

Take the first amendment in Part 2 on Taxation:

“(1) Section 80C of the Scotland Act 1998 (power to set a Scottish rate for Scottish

taxpayers) is amended as follows.”

The online Act has a Section 80 which states:

80 Reimbursement of expenses.

“The Scottish Ministers may reimburse any Minister of the Crown or government department for

administrative expenses incurred by virtue of this Part at any time after the passing of this Act by the

Minister or department.”

http://www.legislation.gov.uk/ukpga/1998/46/section/80

Unless the amended Act is available online the public can have no idea what is being proposed nor

can they follow how the Bill will affect the way they live their lives. Surely given the importance of

the subject matter to the future of Scotland and the UK someone might have thought it worth

bringing the online version up-to-date in advance of the Bill?

The original Smith Commission proposals are shown below:

Power over Taxation Power over Spending

Power over Economy Legal & Political Powers

Revisions to the Smith Commission proposals by the Scotland Bill 2015 are shown as follows:

Power over Taxation Power over Spending

Power over Economy Legal & Political Powers

Powers over Taxation Proposal Power Transferred Power Reserved

Corporation Tax No transfer of Power None All areas Reserved

Value Added Tax No transfer of Power None All areas Reserved. Cannot adjust rates. Police/Fire expenses VAT not recoverable.

64A Assignment of VAT ½ Share of Standard Rate 20% VAT Scotland gets 10 divided by SR (20) Other half retained. Rate setting retained. Police/Fire VAT retained

64A Assignment of VAT ½ Share of Reduced Rate 5% VAT Scotland gets 2.5 divided by RR (5) Other half retained. Rate setting retained. Police/Fire VAT retained

Inheritance Tax No transfer of Power None All areas Reserved

Capital Gains Tax No transfer of Power None All areas Reserved

National Insurance No transfer of Power None All areas Reserved

Excise Duty Rates No transfer of Power None All areas Reserved

Crown Estate No transfer of Power over main assets

T/f of Power over Land & Property in Scotland (Inc. Shoreline)

Defence, Security, Oil & Gas and Energy Reserved

31 Crown Estate T/f of Power over Land & Property in Scotland

Power over management of Crown Estate land in Scotland

The scheme must include such provision as the Treasury consider necessary or expedient — (a) in the interests of defence or national security and (b) in connection with access to land for the purposes of telecommunications

31 Crown Estate Power to manage Land and Property in the Crown Estate in Scotland by Statutory Instrument.

Power over management of Crown Estate land in Scotland

(14) The power to make a scheme under this section is exercisable by Statutory Instrument. Bill doesn’t say if this is a Scottish Parliament SI or a UK Parliament SI – needs clarified.

Offshore Oil & Gas Licensing No transfer of Power None All areas Reserved

Offshore Oil & Gas Taxation No transfer of Power None All areas Reserved

Decide which bodies can reclaim VAT No transfer of Power None All areas Reserved

Right to Levy new taxes No transfer of Power None All areas Reserved

Tax Rate on Savings No transfer of Power None All areas Reserved

Powers over Taxation Proposal Power Transferred Power Reserved

Tax Rate on Dividends No transfer of Power None All areas Reserved

Tax Reliefs & Allowances No transfer of Power None All areas Reserved

Air Passenger Duty T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change 18 Devolved taxes: further

provision Power Retained None (2) The Treasury may by regulations

make further provision relating to— (a) the disapplication of air passenger duty in relation to flights beginning at airports in Scotland;

Aggregates Levy can be altered T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change 18 Devolved taxes: further

provision Power Retained None (2) The Treasury may by regulations

make further provision relating to— (b) the disapplication of aggregates levy in relation to commercial exploitation of aggregate in Scotland.

18 Devolved taxes: further

provision Power Retained None (3) The power conferred by

subsection (2) includes power— (b) to amend, repeal, revoke or otherwise modify an enactment, whenever passed or made (including this Act).

Onshore oil & gas Licensing T/f Power to Scottish Parliament Yes Can’t levy a royalty on production. 40 Onshore petroleum Proposal Watered Down The granting of licences to search

and bore for and get petroleum within the Scottish onshore area

Can’t levy a royalty on production & Can’t collect any consideration payable for such licences.

40 Onshore petroleum Power Retained No control over the format of the licences issued.

The Petroleum Act 1998 S4 (licences: further provisions) (1A) In relation to licences granted by the Scottish Ministers, regulations made by the Secretary of State under subsection (1)(e) may include model clauses on the consideration

payable for a licence and the following (insofar as they relate to such consideration) (a) the measurement of petroleum obtained from the licensed area (including the facilitation of such measurement), and (b) the keeping of accounts. (1B) Regulations made by the Scottish Ministers under subsection (1)(e) may not include model clauses on the matters mentioned in subsection (1A). (3A) Any regulations made by the Scottish Ministers shall be subject to the negative procedure (see section 28 of the Interpretation and Legislative Reform (Scotland) Act 2010).

42 Onshore petroleum: existing

licences

Power over existing licences retained by Sec of State. Power over fallow fields retained by Sec of State. Power over closed areas might also be retained if subject to an existing licence.

None (1) The Secretary of State may make any amendment that appears to the Secretary of State to be necessary or expedient in consequence of S40— (a) in any model clause, to the extent that, under Part 1 of the Petroleum Act 1998, it is incorporated, or has effect as if incorporated, in an existing licence, and (b) in any other provision of an existing licence. (2) The power to make amendments under subsection (1)(a) is exercisable by regulations made by statutory

instrument. (3) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

Set Stamp Duty rates in Scotland T/f Power to Scottish Parliament Yes None

Set Land Tax rates in Scotland T/f Power to Scottish Parliament Yes None

Set Landfill Tax rates in Scotland T/f Power to Scottish Parliament Yes None

Set Income Tax Rate in Scotland T/f Power to Scottish Parliament Power to set Basic Rate +/-3p in £ Power to set Higher Rate +/-3p in £ -cannot vary +/- rate for each band

Power to set zero rate band Power to set Personal Allowance Barnett Formula adjusted for change

S14 Scotland Bill 2015

Consequential amendments:

income tax

Power Retained None (8)Treasury may by regulations make— (a) such consequential provision as they consider appropriate in connection with any provision of section 12 or 13

S14 Scotland Bill 2015

Consequential amendments:

income tax

Power Retained None (b) such transitional or saving provision as they consider appropriate in connection with the coming into force of any provision of section 12 or13 or subsections (1) to (6).

S14 Scotland Bill 2015

Consequential amendments:

income tax

Power Retained None (9) Regulations under this section may amend, repeal, revoke or otherwise modify an enactment, whenever passed or made (including this Act).

Powers over Spending Proposal Power Transferred Power Reserved

Pensions No transfer of Power None All areas Reserved

Scottish Budget No transfer of Power None, Must remain balanced. All areas Reserved

Pensions No transfer of Power None All areas Reserved

Universal Credit Scotland to do Admin of UC here. Right to be Consulted. Right to vary frequency of payments – not rate. Right to pay Landlords directly.

Some changes

24 Universal credit: costs of

claimants who rent

accommodation

(1) A function of making regulations is exercisable by the Scottish Ministers concurrently with the Secretary of State

None. Sec of State has to agree change proposed or it falls.

(4) The Scottish Ministers may not exercise the function of making regulations to which this section applies unless— (a) they have consulted the Secretary of State about the practicability of implementing the regulations, and (b) the Secretary of State has given his or her agreement as to when any change made by the regulations is to start to have effect, such agreement not to be unreasonably withheld.

(4) The Scottish Ministers may not exercise the function of making regulations to which this section applies unless—

(a) they have consulted the Secretary of State about the practicability ofimplementing the regulations, and

(b) the Secretary of State has given his or her agreement as to when any change made by the regulations is to start to have effect, such agreement not to be unreasonably withheld.

25 Universal credit: persons to

whom, and time when, paid

(4) The Secretary of State may not exercise the function of making regulations to which this section applies in or as regards Scotland unless he or she has consulted the

None. Sec of State only has to consult Scottish Ministers then he can push ahead whatever they say.

All areas Reserved

Scottish Ministers.

29 Information-sharing (9) Regulations under this section must be made by statutory instrument. (10) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

Lack of Parliamentary time at Westminster might mean that proposed changes can’t be laid before the Houses of Lords and Commons. Were this the case, any proposed changes would fall.

Migrant Benefits No transfer of Power None All areas Reserved

Maritime & Coastguard Agency No transfer of Power None. MoU to govern operations of MCA

All areas Reserved

48 Maritime and Coastguard

Agency Watered Down – No Mention of an MoU.

None The Secretary of State must consult the Scottish Ministers about the strategic priorities of the Secretary of State in exercising functions under subsection (1) in relation to activities of Her Majesty’s Coastguard in Scotland.

Oil & Gas Decommissioning No transfer of Liabilities None Westminster got Tax receipts & must carry the costs.

Borrowing from National Loan Fund Grant Power to Scottish Parliament Yes Limit set by UK Parliament £300m Borrowing subject to UK agreement

Establish a Cash Reserve Grant Power to Scottish Parliament Yes Limit set by UK Parliament £125m Borrowing subject to UK agreement

Scottish Block Grant Up if Scots Income Tax receipts rise faster than the UK’s. Down if Scots Income Tax recpts rise more slowly.

Proposed. Potentially catastrophic if oil prices fall. Should be counter cyclical if oil price falls - but isn’t.

Potential to collapse the Scottish Economy when oil prices fall and expand the economy when they rise.

Benefits Spending (Except Pensions) T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Powers over Spending Proposal Power Transferred Power Reserved 28 Universal credit: supplementary Watered Down Changes have to be approved by

both houses of UK Parliament. (9) Regulations under this section must be made by statutory instrument. (10) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

Bedroom Tax T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

New Benefits Power to create new Benefits Yes None, not subject to benefits cap

Housing Benefits T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Crisis Loans T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Community Care Grants T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Attendance Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Carer’s Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Disability Living Allowance (DLA) T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change

Personal Independence Payt (PIP) T/f Power to Scottish Parliament Yes Barnett Formula adjusted for change

Industrial Injuries Disabilities Allow T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Severe Disablement Allowance T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Cold Weather Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Powers over Spending Proposal Power Transferred Power Reserved

Funeral Grant T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Maternity Grant T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Winter Fuel Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Discretionary Housing Payment T/f Power to Scottish Parliament Yes Sec of State for Work & Pensions to agree changes in Scotland

Cost of Renewables decommissioning

T/f Power to Scottish Parliament Yes Barnett Formula not adjusted for change & potentially huge cost

Energy Efficiency T/f Power to Scottish Parliament Yes How to Pay for it - Reserved 50 Fuel poverty: support schemes Power Restricted The power of the Scottish Ministers

under section 9 does not include power to make provision in relation to the subject matter of sections 88 to 90 of the Energy Act 2008 (smart meters).

Fuel Poverty T/f Power to Scottish Parliament Yes How to Pay for it - Reserved 50 Fuel poverty: support schemes Power Restricted The Scottish Ministers may not make

regulations under The Energy Act 2010 S9 unless— (a) they have consulted the Secretary of State about the proposed regulations, and (b) the Secretary of State has agreed to the regulations being made. (5) Subsection (1) does not prevent the Secretary of State making a support scheme in relation to Scotland under section 9, or varying or revoking regulations made by the Scottish Ministers under that

section,— (a) with the agreement of the Scottish Ministers, or (b) without their agreement, if subsection (6), (8) or (10) applies. (12) Where the Secretary of State makes a scheme in accordance with subsection (5), section 14(5) does not prevent the Secretary of State, by regulations under section 9, revoking any scheme made by the Scottish Ministers so far as it is inconsistent with the scheme made by the Secretary of State.”

Powers over Economy Proposal Power Transferred Power Reserved

Macroeconomic Policy No transfer of Power None All areas Reserved

Interest Rate setting No transfer of Power None All areas Reserved

Competition Policy - CMA No transfer of Power Will have right to consultation and to request Enquiries and full CMA Phase II Investigations

Some Changes

55 References to Competition and

Markets Authority No transfer of Power. Sec of State has to agree to any request by Scottish Ministers for Enquiry. Sec of State therefore has a right of veto.

Only right to consultation. Enquiries and full CMA Phase II Investigations can only be initiated by joint agreement of Scottish Ministers and Sec of State.

Regulation of Energy - OFGEM No transfer of Power Will have right to consultation and to request Enquiries and full CMA Phase II Investigations

Some Changes

58 Bodies that may be required to

attend before the Parliament

Right to call OFGEM before the Scottish Parliament

Right to make OFCOM explain and justify their actions.

All powers over OFGEM’s activities

Renewable energy incentives ROCs, FITs, RHIs

No transfer of Power None, will have right to be consulted All areas Reserved

53 Renewable electricity incentive

schemes: consultation No transfer of Power – Watered down to not even having to consult the Scottish Ministers on the removal of all schemes of support for Renewables in Scotland.

None Scotland Act 1998 new S90C Renewable electricity incentive schemes: consultation (1) The Secretary of State must consult the Scottish Ministers before— (a) establishing a renewable electricity incentive scheme that applies in Scotland, or (b) amending such a scheme as it relates to Scotland. Subsection (1) does not require the Secretary of State to consult the Scottish Ministers about any levy in connection with a renewable electricity incentive scheme. In this

section a “renewable electricity incentive scheme” means any scheme, whether statutory or otherwise, that provides an incentive to generate, or facilitate the generation of, electricity from sources of energy other than fossil fuel or nuclear fuel. This includes provision made by or under the following so far as they relate to the generation of electricity from sources of energy other than fossil fuel or nuclear fuel— (a) sections 6 to 26 of the Energy Act 2013 (contracts for difference); (b) sections 41 to 43 of the Energy Act 2008 (feed-in tariffs for smallscale generation of electricity); (c) sections 32 to 32Z2 of the Electricity Act 1989 (renewables obligations or certificate purchase obligations).

Regulation of Telecoms - OFCOM No transfer of Power Will have right to consultation & to appoint 1 OFCOM Board Member

UK Secretary of State can veto Board Appointment

Borrowing Limits No transfer of Power None All areas Reserved

Power to create Enterprise Zones No transfer of Power None All areas Reserved

Appoint Rail Operator T/f Power to Scottish Parliament Yes when next renewed None, can be a public sector firm 49 Rail: franchising of passenger

services T/f Power to Scottish Parliament Yes when next renewed None, can be a public sector firm

Legal & Political Powers Proposal Power Transferred Power Reserved

Defence No transfer of Power None All areas Reserved

Foreign Affairs No transfer of Power None All areas Reserved

The Constitution No transfer of Power None All areas Reserved

Immigration & Asylum No transfer of Power None All areas Reserved

Broadcasting No transfer of Power None, right to consult re BBC Charter MoU to govern operations of BBC

All areas Reserved

Broadcasting Watered Down No Consultation or MoU in Bill All areas Reserved

Equality Act 2010 No transfer of Power None All areas Reserved

Special Immigration Appeals Cttee No transfer of Power None All areas Reserved

Proscribed Organisns. Appeals Cttee No transfer of Power None All areas Reserved

Pathogens Access Appeals Cttee No transfer of Power None All areas Reserved

Investigatory Powers Tribunal No transfer of Power None All areas Reserved

Votes for 16-17 Year Olds T/f Power to Scottish Parliament Parl & Council Elections in Scotland Reserved for UK & EU Elections

Payday Loans Shops T/f Power to Scottish Parliament Yes None

Fixed Odds Betting Shops T/f Power to Scottish Parliament Yes None 45 Gaming machines on licensed

betting premises Watered Down Only new betting shops will be under

Scottish Minister’s regulation. (6) The amendments made by this section do not apply in relation to a betting premises licence issued before this section comes into force.

45 Gaming machines on licensed

betting premises

Watered Down -T/f Power to Scottish Ministers for gaming machines for which the maximum charge for use is over £10. This only applies to new premises post enactment of the Bill and not to existing premises where the Sec of State remains the authority.

Power T/f to the Scottish Ministers, so far as, in the case of a betting premises licence in respect of premises in Scotland and not in respect of a track, the order varies— (i) the number of gaming machines authorised for which the maximum charge for use is more than £10, or (ii) whether such machines are authorised;

Section 172 of the Gambling Act 2005 (gaming machines) amended

Other than stated (left), the Secretary of State remains the authority. Regulations made by the Scottish Ministers under a provision specified in subsection (4), or under section 285, and an order made by the Scottish Ministers under section 172, shall be subject to the affirmative procedure. Any other regulations made by the

Scottish Ministers under a provision of this Act shall be subject to the negative procedure.”

Social Security Tribunal T/f Power to Scottish Parliament Yes None

33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised restricted or removed by an Order in Council.

(5) An Order in Council under this paragraph may make any provision which Her Majesty considers necessary or expedient for the purposes of or in consequence of the transfer of the function and its exercise by the Scottish tribunal.

Criminal Injuries Tribunal T/f Power to Scottish Parliament Yes None 33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised

restricted or removed by an Order in Council.

(5) An Order in Council under this paragraph may make any provision which Her Majesty considers necessary or expedient for the purposes of or in consequence of the transfer of the function and its exercise by the Scottish tribunal.

Information Rights Tribunal T/f Power to Scottish Parliament Yes None 33 Tribunals Transfer of Powers Restricted Exercise of Power can be revised

restricted or removed by an Order in Council.

(5) An Order in Council under this paragraph may make any provision which Her Majesty considers necessary or expedient for the purposes of or in consequence of the transfer of the function and its exercise by the Scottish tribunal.

Power over Road Speed Limits T/f Power to Scottish Parliament Yes None

36 Roads: speed limits Transfer of Powers Restricted Joint Exercise by Sec of State and/or Scottish Ministers

Road Traffic Regulation Act 1984 S81(3) An order under subsection (2)—(a) if made by the Secretary of State, is to be made by statutory instrument and approved by a

resolution of each House of Parliament; (b) if made by the Scottish Ministers, is subject to the affirmative procedure.

Power over Road Signs T/f Power to Scottish Parliament Yes None

35 Roads: traffic signs etc Transfer of Powers Restricted Joint Exercise by Sec of State and/or Scottish Ministers

Road Traffic Regulation Act 1984 Section 65 (powers of traffic authorities as to placing of traffic signs) (3ZA) The power of the Scottish Ministers to give general directions under subsection (1) is to be exercisable by Scottish statutory instrument. (3ZB) Before giving a general direction under subsection (1) the Secretary of State must consult with the Scottish Ministers. (3ZC) Before giving a general direction under subsection (1) the Scottish Ministers must consult with the Secretary of State.”

35 Roads: traffic signs etc Transfer of Powers Restricted Joint Exercise by Sec of State and/or Scottish Ministers

The Road Traffic Act 1988 S36 (offence of failing to comply with traffic sign) (6) Before making regulations under subsection (5) the Secretary of State must consult with the Scottish Ministers. (7) Before making regulations under subsection (5) the Scottish Ministers must consult with the Secretary of State. In section 195 (regulations)

(4ZA) Regulations made by the Scottish Ministers under section 36(5) are subject to the negative procedure.

British Transport Police T/f Power to Scottish Parliament Yes None, but who gets VAT on spend?

Observations on Smith’s Proposals Under Chapter 2: Fiscal framework on Page 33 we are told that: “The Scottish Government will not therefore be isolated from all risks, so will need tools to manage appropriate risks. If Scotland experiences an economic shock when the rest of the UK does not, the funding model would not provide the Scottish Government with additional to offset its lower tax receipts or higher spending pressures” We are also told: “Borrowing could be undertaken to respond to a shock, but a clear plan will be needed to repay the debt incurred in order to ensure a sustainable fiscal position” Remember, we were told above that if Scotland’s share of income taxes for the whole UK falls we will see a cut in our share of the Barnett Formula grant. This is hardly a hypothetical position, it is precisely where we are now. If oil prices fall jobs in Scotland would be lost. The UK as a whole would benefit from a fall in oil & gas prices, these would boost company profits and wages in the rest of the UK. In Scotland, our share of income tax receipts would fall. In the event of a crisis in Scotland, the UK’s “Enduring Settlement” could well make things worse. A cut to Barnett formula funding for Scotland would follow our fall in income tax receipts. Nor would we be able to borrow more without permission, nor would we be able to alter any other taxes in response to the crisis. Observations on the Draft Bill I’m an anorak, but even I found it impossible to follow what was being proposed for the Welfare part of the Bill. The draft refers to “Exceptions” but I wasn’t able to deduce from the text whether or not powers to create new benefits or to enhance old ones had been granted or whether this was another area where Westminster has backtracked on Smith. We need to see the new text as amended by the Scotland Bill to see what is being done. This isn’t available. I had not considered it likely that I would spend so much time on road signs. It seems the Scottish Parliament won’t be able to erect a road sign in a country with the “strongest devolved government anywhere in the world” without asking for permission from Westminster. A Quiver Full of Arrows What then am I sure of? Westminster has written this Bill in the spirit of a victor handing down terms to a defeated opponent who has unconditionally surrendered following a shattering defeat. We can see many arrows remaining in the Westminster quiver and will consider each of them in turn.

Shaft 1 Many areas require the agreement of the UK Secretary of State prior to any Scottish Parliament Bill becoming law. If they don’t agree the proposed measure will fall. Shaft 2 Many areas require the passing of a UK Statutory Instrument which the UK Parliament may or may not have time to consider. Often it won’t have time.... Shaft 3 Some areas require the approval of both Houses of the UK Parliament before they can be enacted. Often these houses won’t have time.... Shaft 4 In some areas Scottish legislation can be overturned by a UK Order in Council.

Shaft 5 In some devolved areas Model Clauses will be imposed by the UK Parliament Shaft 6 In public appointments the Secretary of State can overrule Scottish Ministers Shaft 7 The Secretary of State can revoke any Scottish scheme to tackle Fuel Poverty if they don’t like it. Shaft 8 Powers to tackle gambling can only be used for new licences. All existing licensed gambling venues will be ultra vires. Shaft 8 Powers which were to come to the Scottish Parliament under Smith are often now to be joint powers shared between Scottish Ministers and their UK equivalents.

It is a veritable quiver full of arrows designed to thwart the aspirations of the people of Scotland and to leave ultimate control in most areas with the UK Parliament in Westminster. Conclusion It is delusional given the diminutive nature of the powers over the economy transferred under this settlement to suggest that this formula will be one which endures. The fault is not Lord Smith’s. He was there to act as a cipher for the political parties round the table. He did his job. What was put together essentially reflects the views of the Con-Dem-Lab coalition for a “No” vote. Having won they were unwilling to enhance the powers of the Scottish Parliament in any material way. Faced with the threat from the three amigos to walk away if their view didn’t prevail the SNP and the Greens got the best deal they could in the circumstances. That it isn’t what the public expected or wanted is clear from the SNP’s membership quadrupling since the referendum. We are left with a Parliament which has lots of control over spending but little say on how taxes are set and the money raised to pay for it. Few things can be changed without a consequence for the Barnett Formula negating them. Yet again, power devolved is power retained. We’ve often heard the argument made that the pro-Unionist parties fear a “Neverendum” more than anything. Clearly this can’t be the case. If it was they’d have given the people of Scotland what they asked for and expected, proper Fiscal Federalism with powers over “tax” as well as over “spend”. Devo-Max this settlement ain’t. The LibDems and Labour’s “No” coalition participants are now regretting their lack of magnanimity in victory. They were grallached at the polls. The Draft Bill waters Smith down in many ways. We’ve identified eight shafts in Westminster’s quiver full of arrows all designed to show who won. Each shaft brings independence nearer. Proper Home Rule will not be long delayed. Derek W Louden Abbian House Tower Street Tain Ross-shire IV19 1DY

Tel: 01862 892734 Mob: 07876 774412 Email: LoudenDW@aol.com