Here are the key points set out by the Smith commission, which was charged with taking forward the devolution commitments on further powers for the Scottish parliament.
• The Scottish parliament will have complete power to set income tax rates and bands.
• Holyrood will receive a proportion of the VAT raised in Scotland, amounting to the first 10 percentage points of the standard rate (ie with the current standard VAT rate of 20%, Scotland will 50% of the receipts), but cannot influence the UK’s overall UK rate.
• It will have increased borrowing powers, to be agreed with the UK government, to support capital investment and ensure budgetary stability.
• UK legislation will state that the Scottish parliament and Scottish government are permanent institutions. The parliament will also be given powers over how it is elected and run.
• Holyrood will have power to extend the vote to 16- and 17-year-olds, allowing them to vote in the 2016 Scottish parliamentary election.
• It will have control over a number of benefits including disability living allowance, the personal independence payment, winter fuel payments and the housing elements of universal credit, including the under-occupancy charge (bedroom tax).
• The Scottish parliament will also have new powers to make discretionary payments in any area of welfare without the need to obtain prior permission from department for work and pensions.
• It will have all powers of support for unemployed people through employment programmes, mainly delivered at present through the Work Programme.
• It will have control over air passenger duty charged on people flying from Scottish airports.
• Responsibility for the management of the crown estate’s economic assets in Scotland, including the crown estates’s seabed and mineral and fishing rights, and the revenue generated from these assets, will be transferred to the Scottish parliament.
• The licensing of onshore oil and gas extraction underlying Scotland will be devolved to the Scottish parliament.
• The Scottish government will have power to allow public sector operators to bid for rail franchises funded and specified by Scottish ministers.
• The block grant from the UK government to Scotland will continue to be determined via the operation of the Barnett formula. New rules to define how it will be adjusted at the point when powers are transferred and thereafter will be agreed by the Scottish and UK governments and put in place prior to the powers coming into force. These rules will ensure that neither the Scottish nor UK governments will lose or gain financially from the act of transferring a power.
• MPs representing constituencies across the whole of the UK will continue to decide the UK’s budget, including income tax.
• The Scottish and UK governments will draw up and agree a memorandum of understanding to ensure that devolution is not detrimental to UK-wide critical national infrastructure in relation to matters such as defence and security, oil and gas and energy.
- This article was amended on 28 November 2014 to clarify the line about VAT. The earlier version said “Holyrood will control the first 10% of revenue raised from VAT”.
