Policy paper

2010 to 2015 government policy: Scottish devolution

Updated

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/maintaining-and-strengthening-the-scottish-devolution-settlement. Current policies can be found at the GOV.UK policies list.

Issue

Scotland has two governments: the UK government is responsible for matters including, defence, foreign affairs, the economy, social security and the constitution; and the Scottish government is responsible for matters including health, education, justice and policing and local government.

Although responsibility is divided in this way, the two governments work together on many issues and cooperate to make sure that the devolution settlement is well managed.

The division of responsibilities is not fixed, and it has changed several times since devolution began in 1999. In 2009, the independent Calman Commission recommended a significant transfer of tax raising powers to make sure the Scottish Parliament has responsibility for raising money, as well as spending it.

The UK government agreed with the Calman Commission’s recommendations, and through the Scotland Act 2012 provided the largest transfer of financial powers from Westminster since the creation of the United Kingdom.

Actions

The Scotland Act 2012 transferred new powers to the Scottish Parliament so that it can raise its own taxes. It also introduced a range of measures to strengthen the devolved administration in Scotland.

Some of these changes have already taken effect. These include the transfer of powers to set the drink-drive limit, ban air weapons and set the national speed limit in Scotland.

The tax-raising powers will come into effect in full by April 2016. These powers include the introduction of a new Scottish land and landfill taxes and the new Scottish rate of income tax.

Every year an annual report is published setting out the progress towards implementing the new tax powers.

Scottish Government bonds

On December 12, 2014, HM Treasury announced that it had commenced section 32 of the Scotland Act 2012. Section 32 relates to borrowing by the Scottish Ministers and amends sections 66 and 67 of the Scotland Act 1998 to revise the circumstances under which the Scottish Ministers may borrow. Section 32 sets out the main controls and limits on such borrowing.

New subsection (1A), inserted into section 66 of the Scotland Act 1998 by section 32, enables the Scottish Ministers to borrow to fund capital expenditure, subject to HM Treasury’s approval. The borrowing must be in the form of a loan either from the National Loan Fund (through the Secretary of State) or from another lender, such as a commercial bank. The section does not allow Scottish Ministers to issue Scottish gilts or bonds as the section requires borrowing to be by way of a loan.

On December 15, 2014, an Order was laid in Parliament to amend this new subsection (1A). This Order, being made under section 66(5) of the Scotland Act 1998, provides that, in addition to being able to borrow by loan, the Scottish Ministers can also issue bonds (other than bonds transferrable by delivery).

Being able to issue bonds will give the Scottish government an additional source of capital funding as part of its new tax and borrowing powers contained in the Scotland Act 2012. This is part of the UK government’s promise to deliver on its previous commitments on devolution.

Background

The Scotland Act 1998

The first democratically elected Scottish Parliament was set up in 1999 following the Scotland Act 1998.

The Commission on Scottish Devolution

In 2008, the Scottish Parliament and UK government established an independent Commission on Scottish Devolution (‘the Calman Commission’) to review the ‘devolution settlement’ - the powers of the Scottish Parliament and its relationship with the UK government.

The commission published its report, ‘Serving Scotland Better: Scotland and the United Kingdom in the 21st Century’, in June 2009. The commission recommended that the Scottish Parliament should be given more control over its own finances, and made recommendations to improve and develop the devolution settlement.

In the coalition programme for government in May 2010, the UK government committed to implementing the commission’s recommendations which were set out in the Scotland Act 2012. This Act transferred more powers to raise taxes from the UK government to the Scottish Parliament along with other measures to strengthen and develop the devolved institutions.

Cross party talks

The 3 pro-union parties have made clear commitments on further powers for the Scottish Parliament and the UK government will ensure that they are honoured in full.

Lord Smith of Kelvin has agreed to oversee the process to take forward the devolution commitments, with powers over tax, spending and welfare all agreed by November and draft legislation published by January.

Concordat Agreements

The United Kingdom government and the Scottish government maintain a list of agreements between the UK and Scottish governments which ensure close and effective working between the two governments.

You can read more detailed information about how the UK and Scottish parliaments make laws relating to Scotland.

Bills and legislation

The Scotland Act 1998 established the Scottish Parliament.

The Scotland Act 2012 devolved more tax-raising and other powers form the UK government to the Scottish Parliament.

Appendix 1: legislating for Scotland

This was a supporting detail page of the main policy document.

Role of the UK Parliament

The UK Parliament continues to legislate in reserved areas in Scotland (ie specific matters which are listed in the Scotland Act). It remains sovereign and may also therefore legislate on devolved matters in Scotland. However, in accordance with the Sewel Convention, the government has adopted a principle whereby ‘the UK will not normally legislate in relation to devolved matters in Scotland without the consent of the Scottish Parliament’.

Scotland Act Orders

The Scotland Office and its ministers are responsible for the management of the devolution settlement and work to ensure that the settlement continues to work effectively for the people of Scotland and to maintain Scotland’s place in the union. They are assisted in this by the Advocate General for Scotland and the Office of the Advocate General.

The Scotland Act provides UK ministers with a series of order making powers to manage the devolution settlement. Scotland Office ministers, together with the Advocate General for Scotland, lead on parliamentary proceedings on these orders - which often cover wide policy areas and involve lengthy discussion between the Scotland Office, UK departments and the Scottish government before they can be made.

In the first 10 years since the Scotland Act received Royal Assent, 168 orders were made under the Scotland Act to actively manage the devolution settlement by updating statute, assigning executive responsibility for functions and altering the competence of the Scottish Parliament. Some orders are subject to consideration by both the UK and Scottish Parliaments.

The most common order making powers used under the Scotland Act are outlined below with examples of how these powers have been used.

Orders made under the Scotland Act

Scotland Act Orders: explanation

Examples of Scotland Act Orders

Section 30(2)

Orders made under Section 30(2) of the Scotland Act 1998 allow for modifications to be made to Schedule 5 to the Scotland Act which lists those matters that are reserved to the UK Parliament, and as such defines the competence of the Scottish Parliament. The order making power allows the Scottish Parliament’s legislative competence to be altered by removing or updating existing reservations in, or by adding new ones.

Examples

Where there has been a clear case to devolve further powers to the Scottish Parliament the government has agreed to do so. An example of this was an order taken forward in 2002 under section 30(2) which gave the Scottish Parliament legislative competence over the promotion and construction of railways that are wholly within Scotland.

An order made under section 30(2) may also amend the list of reserved matters to reflect changes in legislation or the creation of new bodies. One such order was S.I. 2004/3329, which added the Arts and Humanities Research Council to the list of reserved matters.

Section 63

Orders made under section 63 allows certain functions of UK ministers to be exercised by Scottish ministers. Whilst those functions are then exercised by Scottish ministers, the subject matter remains reserved. This is known as ‘executive devolution’ and is distinct from legislative devolution which gives Holyrood legislative competence (complete devolution of an issue).

Example

An order was taken forward that transferred functions to the Scottish ministers in relation to the interception of communications. This is governed by the Regulation on Investigatory Powers Act 2000 (RIPA), a reserved Act. An order taken forward in 2003 allowed the Scottish ministers to issue interception warrants to the police in Scotland for the purpose of combating serious crime under RIPA 2000.

Given that the Scottish ministers have day-to-day responsibility for most criminal justice issues in Scotland, it is only sensible that they exercise this function on behalf of UK ministers with legal framework governed by UK legislation.

Section 104

Orders taken forward under section 104 of the Scotland Act allow for consequential modifications to be made to reserved law in consequence of legislation passed by the Scottish Parliament. This order making power allows for amendments to be made to reserved law to reflect changes in legislation in Scotland. This is key to ensuring that reserved law is up-to-date and to making devolution work.

Orders made orders section 104 have also been used to facilitate devolved policies by making provisions in statute that relate to reserved matters. All section 104 order are laid before the UK Parliament, those which amend primary legislation are debated in both houses.

Example

An order taken forward by the Scotland Office in 2008 facilitated the introduction of the ‘Single Survey’ in Scotland by allowing prospective buyers to rely on a survey commissioned by the seller. This order was necessary as consumer protection is a reserved matter under the Scotland Act.

Further details of these and other orders can be found on the website of the Office of Public Sector Information.

The Sewel Convention

The Scotland Office manages the government’s commitments under the Sewel Convention, providing advice to both UK government departments and the devolved administration in order to safeguard the integrity of the devolution settlement.

The Sewel Convention stems from a statement made by Lord Sewel during the passage of the Scotland Bill that the UK Parliament would not normally legislate on devolved matters without first getting the consent of the Scottish Parliament.

The terms of the convention are set out in Devolution Guidance Note 10.

The convention may be triggered if a Bill in the UK Parliament

  • legislates for a devolved purpose
  • alters the functions of Scottish ministers (either increasing or decreasing)
  • alters the legislative competence of the Scottish Parliament (either increasing or decreasing)

When provisions in UK government Bills include one or more of these triggers, the Scottish Parliament’s consent is sought. The consent of the Scottish Parliament is given by way of a Legislative Consent Motion (LCM) which is laid before the Scottish Parliament (usually by the Scottish ministers) in line with the Parliament’s Standing Orders.

The LCMs are scrutinised by committees and are subject to a vote in the main chamber of the Scottish Parliament.

Whilst the UK Parliament may legislate on any matter, be it reserved or devolved, the government is proud of its work to establish devolution in Scotland and is committed to respecting the competence of the Scottish Parliament. In the first 3 sessions of the Scottish Parliament 107 LCMs were passed.

The UK Parliament continues to play a pivotal role in Scotland and Bills extend to Scotland on a variety of reserved and devolved matters.

On issues which are devolved in Scotland, but which have an impact across the UK, it is often necessary to provide for a UK-wide legislative regime. A good example of this and cooperation between UK and Scottish ministers is the LCM for the Climate Change Bill in the 2007 to 2008 session.

Other LCMs are required because it is necessary to update devolved law to reflect changes in the rest of the UK or Scottish ministers request that provisions in UK bills extend to Scotland in a devolved area.

A full list of the LCMs tabled in the Scottish Parliament can be found on the Scottish Parliament’s website.