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Scotland Act 2016

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Introduced by
  
David Mundell

Royal assent
  
23 March 2016

Territorial extent
  
United Kingdom

Scotland Act 2016

Long title
  
An Act to amend the Scotland Act 1998 and make provision about the functions of the Scottish Ministers; and for connected purposes.

Relates to
  
Scotland Act 1998, Scotland Act 2012, Income Tax Act 2007

The Scotland Act 2016 is an act of the Parliament of the United Kingdom. It sets out amendments to the Scotland Act 1998 and devolves further powers to Scotland. The legislation is based on recommendations given by the report of the Smith Commission, which was established on 19 September 2014 in the wake of the Scottish independence referendum.

Contents

Main provisions

The act gives extra powers to the Scottish Parliament and a Scottish Government, most notably:

  • The ability to amend sections of the Scotland Act 1998 which relate to the operation of the Scottish Parliament and the Scottish Government within the United Kingdom including control of its electoral system (subject to a two-thirds majority within the parliament for any proposed change)
  • Legislative control over areas such as road signs, speed limits, onshore oil and gas extraction, rail franchising, consumer advocacy and advice amongst others by devolution of powers in relation to these fields to the Scottish Parliament and the Scottish Ministers.
  • Management of the Crown Estate, the British Transport Police and Ofcom in Scotland
  • Control over certain removable taxes including Air Passenger Duty and Aggregates Levy
  • Control over certain aspects of several welfare and housing related benefits and Disability Living Allowance, Personal Independence Payment, Attendance Allowance and Carer's Allowance
  • The ability to set Income Tax rates and bands on non-savings and non-dividend income
  • Extended powers over Employment Support and Universal Credit
  • The right to receive half of the VAT raised in Scotland.

    • The act recognises the Scottish Parliament and a Scottish Government as permanent among UK's constitutional arrangements, with a referendum required before either can be abolished. However, according to some commentators, the act institutes a weak statutory mechanism, which does not stipulate provisions or guarantees for such a referendum, or makes duties of Crown Ministers in this respect publicly answerable to the Scottish electorate.

    Amendments

    The UK Conservative government tabled around 80 amendments to the bill aimed at clarifying and strengthening some sections of it, and the House of Commons approved these. They included:

  • Control over abortion laws and welfare foods
  • Enhanced powers over welfare, including the ability to top-up any cuts to tax credits made by the UK.

    • About 120 amendments and new clauses were lodged on the bill by opposition parties but these were rejected by the Commons.

    Fiscal framework

    During the passage of the bill, almost a full year of negotiations took place between the Scottish and UK Governments concerning the fiscal framework that accompanied it. This was necessary because of the intention to reduce the block grant given to the Scottish government by HM Treasury to take account of the additional income the Scottish government will receive through retaining a portion of the revenues from income tax and VAT that are generated in Scotland.

    The Smith Commission said that there should be “no detriment” to either government in this context, something which is technically difficult to achieve. A Scottish government proposal was that future adjustment to the block grant should be based on the “per capita index”, which takes into account the growth in tax receipts across the UK, not just Scotland. This is significant because Scotland’s economy and population are not growing as fast as the UK’s. However, the Treasury position was that this would be unfair to the rest of the UK.

    References

    Scotland Act 2016 Wikipedia
    (Text) CC BY-SA