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Major change

A major change in the British Constitution is happening today. The Smith Commission on devolution of powers to the Scottish Parliament go a long way towards fulfilling the promises made by party leaders during September’s referendum.  The Scottish Parliament will control income tax bands and rates but not the personal allowance threshold. They will also take half of VAT receipts in their jurisdiction and have power to borrow on the international markets.

They will have control over some welfare benefits and can create new ones. Transport will be devolved so they could set different speed limits to the rest of the UK. Together with a long list of other powers the Scottish Government will play a bigger role in EU negotiations. The Scottish Parliament will control onshore oil and gas but offshore will remain a UK matter.

What remains to be decided at Westminster is anything to do with pensions, National Insurance, Corporation, Inheritance and Capital Gains taxes. The Universal Credit, the National Minimum Wage, Child and Housing benefits, Maternity and Sick pay are not devolved. The Barnett Formula used to determine the block grant to Scotland will remain. The Treasury will continue to manage the economy with the Bank of England.

Reactions to these proposals vary. English party leaders think they have honoured the ‘Vow’ made during the referendum but John Swinney, Scotland’s Deputy First Minister, says they don’t reflect the full wishes of the Scottish people. He seems to have expected all aspects of domestic government to be devolved to Scotland leaving Westminster only responsible in Scotland for defence and foreign affairs.

Conservative MP John Redwood thinks the proposals go too far and Scottish MPs voting on English income tax will be unjust when English MPs have no say on Scottish taxes. He wants the Speaker to declare which issues are exclusively English and for only English MPs to vote on them. That might become possible if the Labour Party loses up to 30 of its Scottish MPs but not many Bills are exclusively English in their focus.

The Commission’s proposals will be adopted because anything less would increase pressure for another referendum. Despite September’s result some Scottish politicians are denying that it was a once in a generation outcome. They demand a second referendum if Scotland backs the nationalists in another election.  Unionists have to make the changes work to ensure that the ‘No’ vote settles the matter for at least this generation.

The Smith Commission has walked a tightrope between satisfying Scottish expectations and fulfilling the promises made to them during the referendum, on the one hand, and giving Scotland full blown home rule. That would have meant a radical rewriting of the British Constitution creating a federal system because the Welsh and Northern Ireland politicians would have demanded parity with the Scots. Demands for a separate English Parliament would have followed, meaning more politicians and higher taxes to pay for them Let’s hope the Commission got it right and we don’t go down that road.

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