The proposals within the Scotland Bill - as well as the associated fiscal framework currently being worked out by the UK and Scottish Governments - represent big changes to Scotland’s political system, says Nicola McEwen. However, has enough room been left for the public at the negotiating table?
“With great power comes great responsibility” – in Uncle Ben’s memorable last words to Spiderman. But is the reverse also true? Do great responsibilities bring great power?
I find myself asking this question when reflecting on the Scotland Bill currently making its way through the UK parliament. The Bill emerged from the Smith Commission and is intended to deliver a ‘powerhouse parliament’. There is no doubt that the Bill would increase the powers and responsibilities of the Scottish Parliament and Government, especially in taxation and welfare, but there are constraints.
In taxation, the Scottish Government would be obliged to set the rates and bands for all tax on earned income. Scottish residents would no longer pay a UK income tax - their income tax would go to the Scottish Government. The Scottish Government could use this power to increase the rate of taxation paid by higher earners, either to raise more money for public services or to take less tax from the less well off. But since these tax powers are restricted to earned income, it could not prevent high earners from circumventing these policy goals by shifting more of their income into savings or dividends.
Likewise, the Scottish Parliament would have no control over the personal allowance, the first slice of income which is tax-free for almost all earners. So when the UK Government makes changes here, it will have a knock-on effect for the amount of revenue that can be raised within Scotland. But unlike the UK Government, the Scottish Government would have only limited recourse to a broader basket of taxes to make up the shortfall.
In welfare, the Scotland Bill brings new powers over social security, especially over benefits for people with disabilities and their carers. In these areas, the Scottish Government would be free to keep, redesign or replace these benefits as it sees fit. It would also have the power to ‘top-up’ UK welfare benefits, and to introduce new benefits for working-age adults that are not already covered by the UK government. So, for example, the Scottish Government would have the power to restore housing benefit to under-21s who will no longer be entitled to UK housing benefit.
In practice, if it wants to make any changes to existing benefits, top up or introduce new benefits, it will almost certainly have to set up new agencies or systems for the processing and delivering Scottish benefits, adding to the cost.
The Bill has already been through the House of Commons and is now being debated in the Lords. The Scottish Parliament will also have the opportunity to give – or withhold – its consent for the legislation. In addition, the two governments are currently negotiating the details of a fiscal framework behind closed doors, a key part of the devolution deal.
These are big changes to Scotland’s political system. They could have profound implications for the powers, responsibilities and capacities of the Scottish Parliament and Government to develop and deliver public services. After the democratic engagement of the referendum campaign, it is disappointing that debates on the Scotland Bill have largely excluded the public. Everyone in Scotland should have a voice in debating Scotland’s future.