The Scottish Government believes that decisions that affect 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, Scottish independence, and it is 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 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, which was made up of officials from the United Kingdom Government, the Scottish Government and this Parliament, for its hard work in supporting the process. I also thank the other members of the commission for the generally good-natured approach that was taken to the process.
The commission had a challenging task. The promises that were made to the people of Scotland in the lead-up to the referendum—promises of home rule, near federalism and extensive powers for this Parliament—meant that expectations around the process were extremely high. Four hundred and seven organisations and more than 18,000 individuals in Scotland took the time to write to the Smith commission, setting out their views on further devolution, which clearly demonstrates that engagement and interest in politics in Scotland remain as strong as they were 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 devolved.
The report contains a number of recommendations that will enable this Parliament to better serve the people of Scotland. Devolution of air passenger duty, in particular, is a responsibility for which we have been calling for some time, and it was first proposed—alongside devolution of the aggregates levy—by the Calman commission in 2009. It is a tax that impacts on our tourism industry and the wider business sector.
More extensive powers over income tax, albeit within the reserved framework set by Westminster, open up new opportunities to this Parliament and will increase accountability. The flexibility in 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 supporting 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 basis, which ignores the reality of circumstances here in Scotland. The proposal to vary the housing element of universal credit will enable us to prevent that from happening in the future. Subject to this Parliament’s ability to find the required resources, we now also have the prospect of being able to create new benefits that could assist our people.
The long overdue agreement to transfer to this Parliament the responsibilities and revenues of the Crown Estate to 200 nautical miles has had long-standing support across the parties. With those powers, we will be able to ensure that island and coastal communities receive 100 per cent of the net income from sea bed leasing revenues, ensure that 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 Minister for Transport and Islands will begin discussions on the use of those powers in Orkney today.
Finally, I am sure that everyone in the chamber will welcome the fact that this Parliament will have control over our own elections. The Parliament has more than demonstrated its competence in delivering fair and robust constitutional processes, and I am particularly pleased that we secured agreement on the need for early action to allow us to extend the franchise to 16 and 17-year-olds for the 2016 election.
Following the publication of the report, the Government wants to make rapid progress in implementing its recommendations in full and true to the spirit and intention of the Smith report. To make that progress successfully, a number of principles should be observed.
First, the UK and Scottish Governments must work jointly to produce the draft clauses that are due to be published by the end of January. The First Minister wrote to the Prime Minister on the day that the report was published to offer the Scottish Government’s full participation. Given that a joint secretariat composed of members of the civil services of the UK Government and the Scottish Government along with staff from the Scottish Parliament has been able to effectively and properly support the Smith commission, it seems logical to extend that approach to the drafting of the clauses that will put into practice the commission’s recommendations.
The second principle is that, when possible, both Governments should take early action on devolution and on tackling key areas of concern. The most pressing need is for early action to secure the powers for the Parliament to enfranchise 16 and 17-year-olds—as the Scottish Government would like to do, and for which there is support across the political spectrum in the Parliament—in time for the 2016 election.
All of us watched the tremendous success of the extension of the franchise to 16 and 17-year-olds for the referendum, which was a model of democratic participation and engagement. It is essential that the commitments that were made to 16 and 17-year-olds during the referendum campaign are extended to ensure that they can participate in the elections to this Parliament in 2016. The First Minister repeated the commission’s call for early action on representation for 16 and 17-year-olds in her letter to the Prime Minister last week, and I am sure that the whole Parliament is hopeful of a positive response to that proposition.
Similarly, early legislative action could be taken to devolve responsibility for air passenger duty. The Scotland Act 2012 provides an order-making power to allow new devolved taxes to be added to land and buildings transaction tax and landfill tax, which we are currently implementing.
Early action could also be taken on gender quotas. In her previous ministerial role, Shona Robison wrote to the UK Government to outline the Scottish Government’s proposals for a section 30 order to provide the Parliament with the necessary competence. We must make progress down that route.
Paragraph 96 of the Smith commission report lists a number of important issues for consideration that do not require an act of devolution. They include important issues around immigration to support our economy, asylum seekers and victims of human trafficking; retention of fine income in Scotland; and health and safety. My Cabinet colleagues and I will write to our UK counterparts to seek early discussions on those matters over the next few days. Progress on those powers would be an early down payment on the further devolution that we have all been promised, and whether it is achieved 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 that are 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 that would constrain our freedom to come to our own decisions, without our express agreement. The most obvious example of such a step is the move from disability living allowance to personal independence payments, which the First Minister mentioned in the chamber last week. The First Minister will write to the Prime Minister to ask for the roll-out of PIPs to be halted in Scotland and for the proposed cuts to disability benefits not to be implemented before the relevant responsibility is passed to this Parliament. I hope that all members will support that position.
Another example concerns employment programmes such as the work programme, the current contracts for which are approaching their end. It is crucial that the UK and Scottish Governments agree the arrangements that will follow those contracts, and we should explore all the options, including the devolution of responsibility to this Parliament, as soon as is practical.
Of particular importance is agreement that more powers will be accompanied by firm financial foundations and a fiscal framework that provides an equitable settlement to both Governments. Experience of the continuing negotiation on and implementation of the Scotland Act 2012, which I discussed at length with the Finance Committee yesterday at its evidence session on the Isle of Arran, has shown that the implementation of financial agreements is almost as important as the legislation itself. In my letter to the Chancellor of the Exchequer on the autumn statement, I therefore proposed that we meet in short order to start discussions on how those 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 that we will have the best chance of fulfilling its commitments if we follow the principles of joint working between the UK and Scottish Governments, the taking of early action when 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 Scottish Trades Union Congress 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 in businesses in challenged areas; and the Scottish Council for Development and Industry called for research and development incentives to improve Scotland’s poor industrial record in that area.
Children 1st supported powers over all aspects of employment rights and conditions to create a much more family-friendly employment regime, and it supported the devolution of child support. The Scottish Council for Voluntary Organisations 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 equalities law. The full devolution of equalities legislation was supported by Engender and other equalities groups.
It should therefore be little surprise that, given that none of those responsibilities was devolved, there was such widespread disappointment on the publication of the report last week. The proposals mean that control over 71 per cent of taxes in Scotland remains at Westminster, along with 85 per cent 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 United Kingdom. The vow has simply not been fulfilled. [Interruption.]