DELIVERING PROGRESS THROUGH SELF-GOVERNMENT
The success of the next stage of self-government should be judged by the degree to which it improves the lives of the people of Scotland. With that aim in mind, in this chapter we propose principles against which any proposal for enhanced powers should be tested.
We believe that there is scope for substantial agreement about the objectives of further devolution, and the Scottish Government has already initiated discussions with a range of interested groups representing key sectors of Scottish society on our approach. Agreement amongst the participants in the Smith Commission process on a set of principles of the sort set out here would provide a strong basis for taking forward discussion of the detail of further powers for the Scottish Parliament.
We propose that further powers and responsibilities should be underpinned by three principles.
1. Further devolution should respect the sovereignty of the people of Scotland and enhance financial and democratic accountability to them.
In Chapter 4 we argue that this should include making the Scottish Government accountable to the Scottish Parliament for raising all taxation in Scotland, with a very few exceptions.
Enhanced powers should also allow decisions to be taken closer to the people affected and should promote public and civic engagement, building on the success of the Scottish Parliament and the extraordinary level of participation seen in the referendum debate.
The Scottish Parliament should also have the power to devolve further, to local authorities and communities, responsibility for decision-making as well as administration. The enhanced settlement should provide for the permanence of the Scottish Parliament and give it the ability to make its own rules.
2. Further powers must transform the ability of the Scottish Parliament and Government to meet the challenges we face as a country, in particular to enable Scotland to be a more prosperous country, a fairer and more equal society and have a stronger voice in the EU and internationally on matters within devolved responsibility.
To achieve this, enhanced powers should:
- enable Scotland to become a more prosperous country. The Scottish Parliament should have the powers to develop an economic policy matched to the needs and circumstances of people and businesses in Scotland. The Parliament should be able to harness Scotland's natural and human resources to invest in policies that promote growth and create jobs
- allow Scotland to build a fairer society. The Scottish Parliament needs to be able to address the deep-lying causes of inequality in Scottish society. It should be empowered to tackle poverty, including in-work poverty, taking account of the specific circumstances of people and communities in Scotland and reflecting Scottish values. Devolved powers should enable Scotland to take a progressive approach to human rights and ensure that everyone gets a fair chance regardless of age, gender, race, religion, disability, gender reassignment or sexual orientation
- strengthen Scotland's place in the world, not only culturally and economically, but by giving Scotland a stronger and more clearly articulated voice on the international stage on matters within our devolved competence, reflecting our internationalist tradition and outward-looking democracy
3. Further devolution should be equitable and transparent in its approach to resources, risks and rewards.
- ensure that the overall funding arrangements for the Scottish Parliament are equitable, including Scotland retaining taxes raised here, and any transfers being based on the current Barnett formula during a transition period, and if the Scottish Parliament's financial powers fall short of full fiscal responsibility
- allow the Scottish Parliament to reinvest the financial and economic rewards of sound and sensible decision-making in Scotland, as well as having the tools to manage any risks from its increased responsibilities
- be transparent so that it is clear which aspects are under the control of the Scottish Government and which remain with the UK Government
As well as the three principles, any package of further devolution should be assessed against three 'good government' criteria:
- Coherence. So far as possible the Scottish Government and Parliament should have a coherent set of powers to tackle a particular problem, rather than leaving some relevant powers in the control of one government and others in that of the other. Effective 'clusters' of powers covering, for example, support into employment - including training and benefits - and support in sustaining employment are required
- Effectiveness. The package should provide levers that can be used to address social and economic challenges, and not simply be a transfer of funding or delivery accountability with little or no practical scope for taking innovative policy initiatives to meet Scottish needs
- Transparency. Citizens should know who to hold accountable for decisions. For example we believe that complete control of Income Tax and National Insurance would be far simpler and more effective than a complex system of joint control, with the Scottish Parliament setting some aspects of Income Tax and other elements being decided by Westminster
How should these principles be applied in practice?
The legislation that established the Scottish Parliament took the approach of devolving everything except a list of specified reserved matters.
The Scottish Government believes the default assumption should be that all matters - with the exception of those that could not be the subject of devolution while Scotland remains within the United Kingdom - are for the Scottish Parliament and Scottish Government. It is for those who are arguing that a matter should remain reserved to demonstrate their case. The principles above, and the good government criteria, should be used to test the arguments for continued reservation, as well as to test packages for extended powers that have been produced by the UK parties and others in this debate. This is effectively the principle that was enshrined in the first Scotland Act - that everything should be devolved unless it is expressly reserved.
The Scottish Government believes that a combination of these principles, the criteria above, and the underlying assumption that matters should be the responsibility of the Scottish Parliament, provides a robust basis to examine proposals for further powers and responsibilities.