Smith Commission

The Smith Commission was announced by Prime Minister David Cameron on 19 September 2014 in the wake of the 'No' vote in the 2014 Scottish independence referendum. The establishment of the commission was part of the process of fulfilling The Vow made by the leaders of the three main unionist parties during the last days of the referendum campaign. The Vow promised the devolution of more powers from the Parliament of the United Kingdom to the Scottish Parliament in the event of a No vote.

Lord Smith of Kelvin holding the Commission's report

Following the No vote, Lord Smith of Kelvin was given the task 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".[1] Ten representatives were nominated by the political parties with elected members in the Scottish Parliament; the Commission started its discussions on 22 October.[2] Agreement was reached and the report published on 27 November 2014.[3][4]

Following the Conservative election victory at the 2015 General Election, the Scotland Bill 2015–16 was proposed in the first Queen's Speech, to put into effect the recommendations of the Smith Commission.

The Vow

The Vow was a joint statement by the leaders of the three main unionist parties, David Cameron, Ed Miliband and Nick Clegg, promising more powers for Scotland in the event of a No vote. Included in The Vow was that in the event of a No vote:

The Vow was published in the Daily Record,[5] one of the main tabloid newspapers in Scotland that also backed a No vote in the referendum. The explanation and background to the publication of The Vow was explained in the Daily Record itself one year after the referendum when it outlined that following a poll showing the 'Yes' side ahead, it was felt that firm promises of more powers were required from the 'No' side.[6]

Membership of Smith Commission

The five political parties with representation in the Scottish Parliament were each invited to nominate two representatives to the commission. Those nominated were:

Political Members of the Smith Commission

Written submissions

The commission invited submissions from individuals and organisations before a deadline of 31 October.[9] Approximately 14,000 emails and letters were received from the public, with a further 250 contributions from groups.[9]

The Conservatives, Labour and Liberal Democrats, who had all supported a no vote in the referendum, each submitted proposals which were similar to the findings of commissions they had each established before the referendum.[10] The SNP and Scottish Greens, who had supported a yes vote, called for what was described by BBC News as "devo max".[10]

The Scottish Trades Union Congress called for the full devolution of income tax, many welfare benefits and a different immigration policy.[11] The Institute of Chartered Accountants of Scotland pointed to the possible risks and additional administration costs caused by having different tax systems and rates.[12]

Three Scottish airports (Edinburgh, Glasgow and Aberdeen) proposed that Air Passenger Duty (APD) should be devolved, with a view to it being abolished in Scotland.[13] The airports cited the restrictive effect on tourism of APD, which raised about £200 million in revenue during the 2013/14 fiscal year.[13] WWF Scotland opposed the devolution of APD in its submission, citing the growth in carbon emissions from air travel.[14] The Scottish Government previously called for the devolution of APD in 2011, when it was devolved to Northern Ireland.[15] This action had been taken in anticipation of a similar tax being abolished in the Republic of Ireland.[15]

The Smith Report

The report highlights three main Heads of Agreement. These are:

  • Pillar 1: Providing for a durable but responsive constitutional settlement for the governance of Scotland
  • Pillar 2: Delivering prosperity, a healthy economy, jobs, and social justice
  • Pillar 3: Strengthening the financial responsibility of the Scottish Parliament

The following list are the issues discussed within the Heads of Agreement:

Recommendations

On 27 November 2014 the commission published its recommendations, which included the following:[3][4]

  • The Scottish Parliament to have complete power to set income tax rates and bands except for the Personal Allowance and administration (which is still carried out by HMRC.)
  • The Scottish Parliament to receive a proportion of the VAT collected in Scotland, amounting to the first ten percent of the standard rate (so with the current standard VAT rate of 20%, Scotland would receive 50% of the receipts). However, the Scottish Parliament would not have power to influence the UK's overall VAT rate and would not be a devolved tax.
  • The Scottish Parliament to have increased borrowing powers to support capital investment and ensure budgetary stability. These powers are to be agreed with the UK government.
  • UK legislation to state that the Scottish Parliament and Scottish Government are permanent institutions. The parliament will also be given powers to legislate over how it is elected and run.
  • The Scottish Parliament to have power to extend the vote to 16- and 17-year-olds, allowing them to vote in the 2016 Scottish Parliament election.
  • The Scottish Parliament to have control over a number of benefits including disability payments, winter fuel payments and the housing elements of Universal Credit.
  • The Scottish Parliament to have new powers to make discretionary payments in any area of welfare.
  • The Scottish Parliament to have control over Air Passenger Duty charged on passengers flying from airports within Scotland.
  • Responsibility for the management of the Crown Estate's economic assets in Scotland, including the Crown Estate's seabed and mineral and fishing rights, and the net surplus revenue generated from these assets, to be transferred to the Scottish Parliament.
  • The Scottish Government will have power to allow public sector operators to bid for rail franchises funded and specified by Scottish ministers.
  • The block grant from the UK government to Scotland will continue to be determined via the operation of the Barnett formula. New rules to define how it will be adjusted at the point when powers are transferred and thereafter to be agreed by the Scottish and UK governments and put in place prior to the powers coming into force. These rules will ensure that neither the Scottish nor UK governments will lose or gain financially from the act of transferring a power.
  • MPs representing constituencies across the whole of the UK to continue to decide the UK's budget, including income tax.
  • The Scottish and UK governments to draw up and agree on a memorandum of understanding to ensure that devolution is not detrimental to UK-wide critical national infrastructure in relation to matters such as defence and security, immigration, trade and energy.

The commission also considered devolving the power to vary all elements of Universal Credit (rather than just its housing element) but this did not appear in the commission's final recommendations.[17]

Reaction

Before publication

In October 2014 the House of Commons Political and Constitutional Reform Committee heard evidence that was critical of the timetable set for the Smith Commission. Professor Michael Keating said he believed that the condensed timetable, which called for draft legislation by January 2015, was unrealistic. He warned of the risk that agreement would unravel because there was insufficient time to consider technical issues. Both Professor Keating and Professor Nicola McEwen said this was due to political pressures, with the unionist party leaders having vowed to grant additional powers and a United Kingdom general election due to be held on 7 May 2015.[18]

The Scottish Socialist Party were not invited to be part of the Smith Commission, leaving them the only one of the six political parties that had registered with the Electoral Commission for the referendum campaign that were not able to send a representative.[19]

After publication

Nicola Sturgeon, Scotland's first minister, commented "I welcome what is being recommended" but argued that it "doesn’t deliver a modern form of home rule". Claiming that too little power would be devolved to Scotland, she added "I want to have the power in our hands to create a better system to lift people out of poverty, to get our economy growing. That’s the kind of powerhouse parliament I want. Sadly it’s not the one that’s going to be delivered."[20] Iain Macwhirter, writing in The Herald, argued that the lack of devolution of taxes other than income tax would "lock Scotland in economic decline".[21] Polling in November 2014 indicated that a majority of Scots wanted greater devolution than that recommended by the Smith Commission.[22]

After the 2015 UK general election

The SNP won 56 of the 59 seats contested in Scotland in the 2015 UK General Election, which was held on 7 May 2015. Speaking after the election, First Minister Nicola Sturgeon called for reforms greater than that proposed by Smith, particularly in respect of taxation and welfare.[23] Former First Minister Jack McConnell described Smith as a "shambles" and called on Cameron to lead a new constitutional convention.[24] Malcolm Rifkind, a former Secretary of State for Scotland, also expressed support for the idea of some sort of new commission.[25] In response, Cameron said he would "look at" any proposals for further powers for Scotland but wanted to get the Smith Commission plans implemented first.[26]

Legislation

Once the Smith Commission's recommendations had been published they were debated in the UK Parliament and a command paper was published in January 2015 putting forward draft legislative proposals. A Scottish Parliament committee report published in May 2015 said that the draft bill proposed in January 2015 did not meet the recommendations of the Smith Commission, specifically in relation to welfare payments. A spokesman for the UK Government said that a full Parliamentary discussion would follow.[27] A bill based on the Smith Commission's recommendations was announced by the UK government in the May 2015 Queen's Speech.[28] The bill subsequently became law as the Scotland Act 2016 in March 2016.

See also

References
  1. "About". The Smith Commission. Archived from the original on 6 October 2014. Retrieved 5 October 2014.
  2. "Smith Commission on more powers for Scotland to hold first meeting". BBC News. BBC. 22 October 2014. Retrieved 22 October 2014.
  3. Haroon Siddique (27 November 2014). "New powers for Scotland: key points from the Smith commission". The Guardian.
  4. Ben Riley-Smith (28 November 2014). "Everything you need to know about the Smith Commission". The Telegraph.
  5. "David Cameron, Ed Miliband and Nick Clegg sign joint historic promise which guarantees more devolved powers for Scotland and protection of NHS if we vote No". Daily Record. 15 September 2014. Retrieved 22 October 2014.
  6. "Inside THE VOW: How historic Daily Record front page which changed the course of Britain's constitutional settlement was born". Daily Record. Retrieved 28 December 2015.
  7. "Scottish referendum: Iain Gray to join powers commission". BBC News. 29 September 2014. Retrieved 5 October 2014.
  8. "Scottish referendum: John Swinney to join Lord Smith commission". BBC News. 25 September 2014. Retrieved 5 October 2014.
  9. Smith Commission receives more than 14,000 submissions, BBC News
  10. "SNP calls for major post-No powers". BBC News. 10 October 2014. Retrieved 27 December 2015.
  11. Scottish trade unions call for tax, welfare and immigration powers, BBC News
  12. Accountancy body warns over new tax powers for Scotland, BBC News
  13. Three Scottish airports call for end to Air Passenger Duty, BBC News
  14. Charity WWF Scotland defends airport green tax, BBC News
  15. Scottish airports disappointed by tax decision, BBC News
  16. "Quick guide to Smith Commission Report". SCVO. SCVO. Archived from the original on 8 March 2017. Retrieved 21 April 2015.
  17. Andrew Grice (28 November 2014). "Smith Commission: Scottish welfare controls watered down at eleventh hour". The Independent.
  18. "Smith Commission timetable 'unrealistic'". BBC News. London. 16 October 2014. Retrieved 28 May 2015.
  19. Freeman, Tom (27 October 2014). "SSP welcomes new members at conference". Holyrood magazine. Retrieved 18 March 2015.
  20. Libby Brooks (27 November 2014). "Nicola Sturgeon: Smith commission fails to deliver 'powerhouse parliament'". The Guardian.
  21. Iain Macwhirter (30 November 2014). "Power over income tax only will doom Scotland to a downward spiral". Herald Scotland.
  22. Gordon, Tom (30 November 2014). "Most Scots want more powers than Smith provides". Herald Scotland.
  23. "Election 2015: Sturgeon says Cameron must go further on devolution". BBC News. BBC. 10 May 2015. Retrieved 11 May 2015.
  24. "Election 2015: Smith Commission a 'shambles', says Jack McConnell". BBC News. BBC. 10 May 2015. Retrieved 11 May 2015.
  25. "Sir Malcolm Rifkind calls for powers commission". BBC News. BBC. 10 May 2015. Retrieved 11 May 2015.
  26. "Cameron will 'look at' proposals for further Scottish devolution". BBC News. Scotland. 15 May 2015. Retrieved 28 May 2015.
  27. "Holyrood powers bill 'falls short' of Smith proposals". BBC News. BBC. 14 May 2015. Retrieved 14 May 2015.
  28. "Scottish devolution: What next for Scotland?". BBC News. Scotland. 27 May 2015. Retrieved 28 May 2015.
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