The Smith Commission report is an important step forward on the devolution journey, even if many of us who support further devolution will be disappointed over its omissions.
First of all let’s dispose of the political froth. It's impossible to know if the 'vow' has been delivered as, other than a newspaper headline, it was never clearly defined. At its worst it was the lowest common denominator between the various pro-devolution parties plans. At its best it was the highest common denominator together with some recognition that the independence referendum debate had moved the agenda on. It also appears from the polling that it had less effect on the referendum result than some claim.
What it wasn't ever going to deliver was 'Devo-max'. Quoting opinion polls on particular devolution models is a pretty pointless exercise. Outwith constitution anoraks, most voters have at best a broad understanding of what is currently devolved and have a fairly general desire for greater devolution. This is a point helpfully developed by Lord Smith in his foreword.
So what about the substance?
The permanence of the Scottish Parliament and Government together with the Sewel convention being put on a statutory footing is an important constitutional statement. As is the devolution of election law that will allow the Scottish Parliament to lower the voting age to 16. The super majority for changes to the franchise is a sensible check and balance, given the absence of a revising chamber.
The strengthening of inter-government mechanisms and a more formal consultative role is a useful step forward, although the full devolution of broadcasting and the energy market would have been a better approach. There is some devolution of energy efficiency, fuel poverty and onshore oil and gas extraction. This removes any lingering doubts over the Scottish Government’s ability to take a decision on fracking. Rail franchises are to be devolved, again removing any doubt over the power to allow public sector bids. It’s a pity that the Scottish Government acted too soon in handing the Scotrail franchise to a Dutch operator. Consumer advocacy and advice is a welcome devolution although there was a strong case for going further on consumer protection.
Pensions and Universal credit (UC) rightly remains reserved. There is only a limited devolution of Housing Benefit that falls short of separating it from UC, which would have been a much better approach. This has the potential to be an administrative mess and will limit local authorities ability to direct all housing issues in their area. A range of other benefits outwith UC are to be fully devolved and Parliament will have the power to introduce new benefits and top up existing ones.
Devolution of the work programme is welcome and will have implications for Skills Development Scotland and local authorities. The failure to also devolve the National Minimum Wage and equalities legislation is very disappointing. Tribunals are to be devolved but not the substantive laws they administer, including employment law. Again a mistake, but it should allow the Scottish Parliament to take a different approach to the iniquitous employment tribunal fees. Further consideration is to be given to operational control of health and safety, which is even weaker than the Labour Commission’s half way house.
Financial responsibility has inevitably been the focus of attention and income tax is to be devolved. This is welcome and gives the Scottish Parliament the ability to mitigate the worst effects of austerity and English public service reform, as well as a more progressive system. There are some petty and unnecessary restrictions on personal allowances, savings and dividends etc. This is clearly aimed at avoiding any future arguments over ‘English’ laws at Westminster. National Insurance is to remain reserved and this could cause difficulties as they tax similar incomes.
Assigning the first 10% of VAT is a fairly pointless cosmetic exercise as there are no powers to vary the rate. Air Passenger Duty and the Aggregates levy are to be devolved. This is sensible although there is a debate to be had over the climate change consequences. Business and consumption taxes remain reserved as UNISON and others argued.
The Barnett Formula will remain together with a fiscal framework based on a neutral starting point. This appears to be broadly what UNISON proposed, although the detail will need to be worked out. There is a complex and confusing section on enhanced borrowing powers that mentions the prudential regime we argued for, but not confirming it. The Treasury’s dead hand can clearly be seen in the many caveats in this section.
Overall, there is no doubt that this is a significant shift of powers, particularly fiscal, and the reaction from English cities illustrates that point well. For those like UNISON who argued for a more radical programme, there are important omissions. Energy, employment, equalities and others should be devolved if the Commission had applied the subsidiarity test we argued for. The failure to properly devolve the administration of Housing Benefit, damages what is other wise a sensible package of welfare devolution.
While outwith his remit, Lord Smith makes a helpful statement on the importance of devolution beyond Holyrood to local communities. He also makes the case for parliamentary reform to strengthen scrutiny.
The next stage is to turn the Heads of Agreement into draft clauses by 25 January 2015. However, there should be a broader public engagement exercise to consider this agreement. An opportunity to correct the shortcomings in what is otherwise a fairly reasonable compromise agreement.
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