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02/12/14 14:10

Statement on Smith Commission

Deputy First Minister, John Swinney
Scottish Parliament
02 December 2014

Presiding Officer

The Scottish Government believes that decisions affecting the lives of people in Scotland should be taken here in Scotland, to reflect the priorities and views of those who choose to live and to work in this country.

That is why we campaigned for the establishment of the Scottish Parliament, why we voted for the Scotland Act in 1998 and why we supported the Scotland Act in 2012. It is why we campaigned for, and believe, in independence and it is also why we took part in the process of the Smith Commission.

In the light of the Referendum result, the Government produced proposals for further devolution on 10 October arguing for a robust package of further powers for this Parliament.

As a participant in the proceedings, and on behalf of the Scottish Government, I want to record our thanks to Lord Smith of Kelvin for his clear, focused and neutral direction of the Commission’s proceedings.

I am also grateful to the secretariat of the Commission, made up of officials from the UK and Scottish Governments, and of this Parliament, for their hard work in supporting the process. I also thank other members of the Commission for the generally good-natured approach taken to the process.

The Commission had a challenging task.

The promises made to the people of Scotland in the lead up to the referendum, of "home rule" and "near federalism" and "extensive" powers for this Parliament, meant that expectations around this process were extremely high.

407 organisations and over 18,000 individuals in Scotland took the time to write to the Smith Commission setting out their views on further devolution. This clearly demonstrates that engagement and interest in politics in Scotland remains as strong as during the Referendum.

On behalf of the Scottish Government I welcome the contents of the report but regret that a wider range of powers has not been delivered.

The report contains a number of recommendations that will enable this Parliament to better serve the people of Scotland.

• Devolution of APD in particular is a responsibility for which we have been calling for some time, and was first – alongside devolution of the aggregates levy - proposed by the Calman Commission in 2009. It is a tax which impacts on our tourism industry and the wider business sector.

• More extensive powers over income tax, albeit within the reserved framework set by Westminster, opens up new opportunities to this parliament and will increase accountability. The flexibility over all rates and bands – except the personal allowance - is an improvement on the narrow and inflexible power for a Scottish Rate of Income Tax that we are in the process of implementing.

• The devolution of some benefits for disabled people, carers and our elderly will enable us to develop more effective approaches to support the most vulnerable people in our communities.

• The experience of the bedroom tax has shown us the risks of Westminster taking decisions for the whole of the UK on a “one size fits all” approach, ignoring the realities of circumstances in Scotland. The proposal to vary the housing element of Universal Credit will enable us to prevent that happening in the future.
• Subject to this Parliament’s ability find the required resources, we now have the prospect of being able to create new benefits which could assist our people.

• The long overdue agreement to transfer to this Parliament responsibilities and revenues of the Crown Estate to 200 nautical miles is a proposal that has had long standing support across the parties. With these powers we will be able to ensure island and coastal communities receive 100 per cent of the net income from seabed leasing revenues, ensure there is a coherent system of support for our renewables industry and enable greater investment in a wide variety of projects ranging from harbour improvements to community tourism projects. The Islands Minister is beginning discussions on the use of these powers in Orkney today.

• Finally we – and I am sure everyone in this Chamber - welcome the fact that this Parliament will have control over our own elections. This Parliament has more than demonstrated its competence in delivering fair and robust constitutional processes - I am particularly pleased that we secured agreement on the need for early action to allow us extend the franchise to 16 and 17 years olds for the 2016 election.

Following the publication of the report, this Government wants to make rapid progress in implementing these recommendations in full and true to the spirit and intention of the Smith report.

To make that progress successfully there are a number of principles that should be observed.

First, we believe the UK and Scottish Governments must work jointly in producing the draft clauses due to be published by the end of January.
The First Minister wrote to the Prime Minister on the day the report was published to offer the Scottish Government’s full participation.

The second principle is that where possible both governments should take early action on devolution and on tackling key areas of concern.

The most pressing is early action to secure the powers for this Parliament to enfranchise 16 and 17 years olds – as this Government would like to do – in time for the 2016 election.

The First Minister repeated the Commission’s call for early action in her letter to the Prime Minister last week, and I am sure this whole parliament is hopeful of a positive response.

Similarly early legislative action could be taken to devolve Air Passenger Duty. The 2012 Scotland Act provides an order making power to add new devolved taxes to the land and buildings transaction tax and the landfill tax.

Early action could also be taken on gender quotas. In her previous Ministerial role, Shona Robison wrote to the UK Government outlining the Scottish Government’s proposals for a section 30 order to provide this parliament with the necessary competence. We must make progress down that route.

Paragraph 96 of the report lists a number of important issues for consideration that do not require an act of devolution. These include important issues around immigration to support our economy, asylum seekers, victims of human trafficking; retention of fine income in Scotland; and health and safety. My Cabinet colleagues and I will be writing to our UK counterparts seeking early discussions on these matters over the next few days.

Progress on these powers would be an early downpayment on the further devolution we have all been promised and will be a key test of the UK Government’s commitment.

My third principle is that the UK and Scottish Governments should start preparing in good faith for the transfer of the powers identified in Lord Smith’s report.

In particular the UK Government should not take any steps or decisions that would significantly affect the position of this Parliament after devolution, or constrain our freedom to come to our own decisions, without our express agreement.

The most obvious example of this is the move from Disability Living Allowance to Personal Independence Payments that the First Minister mentioned in this Chamber last week.

The First Minister will be writing to the Prime Minister asking that the roll out of PIP should be halted in Scotland, and that the proposed cuts to disability benefits are not implemented before the responsibility is passed to this Parliament. I hope all members in this chamber will support that position.

Another example are the employment programmes such as the work programme. The current contracts for these are approaching their end. It is crucial that the UK and Scottish Governments agree the arrangements that will follow these contracts, and we should explore all the options including the devolution of responsibility to this Parliament as soon as possible.

Of particular importance is agreement that more powers are accompanied by firm financial foundations and a fiscal framework that provides an equitable settlement to both governments.

Experience of the ongoing negotiation and implementation around the Scotland Act 2012 has shown that the implementation of financial agreements is almost as important as the legislation itself.

In my letter to the Chancellor on the Autumn Statement I therefore proposed that we meet in short order to start discussions on how these aspects of Lord Smith’s recommendations will be implemented.

There is a long way to go before the Smith recommendations are delivered for Scotland. But I believe we will have the best chance of fulfilling its commitments if we follows these principles – joint working between the UK and Scottish Governments, early actions where possible, and both Governments preparing in good faith for the transfer to take place.

This is not a process that can or should be confined to governments. Participation was one of the themes of the First Minister’s comments on our programme for government last week, and participation and engagement have been watchwords for Scottish politics since the extraordinary experience of the referendum.

At the start of the Smith process we engaged with groups of stakeholders to shape our proposals for more powers and our approach to the Commission’s work.

The STUC supported devolution of employment law, health and safety, trade union law and the minimum wage. The STUC also advanced amendments to immigration legislation so that the Scottish Government would be able to direct immigration policy as it affects Scotland.

The Institute of Directors suggested variable capital allowances to promote localised investment particularly into businesses in challenged areas. And SCDI called for R&D incentives to improve Scotland’s poor industrial record in this area.

Children 1st supported powers over all aspects of employment rights and conditions to create a much more family friendly employment regime. They also supported devolution of child support.

SCVO supported devolving the full package of powers over welfare, to create a welfare system that puts fairness and supporting people at its heart and the full devolution of equality law.

The full devolution of equalities legislation was supported by Engender and other equalities groups.

It should therefore be of little surprise that given none of these responsibilities were devolved, there was such widespread disappointment on the publication of the report last week.

The proposals mean control over 71% of taxes in Scotland remains at Westminster along with 85% of welfare decisions – including the conditions and sanctions that are causing so much distress in our country.

These proposals cannot be characterised as Home Rule or as near federalism as is possible in the UK. The Vow has simply not been fulfilled.

Whilst the Commission may not have given us all the tools we want and for which we will continue to argue, we in the Scottish Government stand ready to play our part, and we now look forward to the next steps in Scotland’s journey.