Although much recent media attention has been directed towards the Scottish Government’s announcement that it would publish a draft Bill for a second Scottish Independence Referendum, we should not lose sight of the implementation of the Scotland Act 2016, which continues apace.

Scotland Act 2016

The Act confers on the Scottish Government and Scottish Parliament new powers, far more extensive than any which they have exercised before. Since the Scottish Parliamentary Elections in May 2016, after which the Scottish National Party formed a minority government, there has been speculation as to how, if at all, the Scottish Government would propose using these new powers. The text of the Act can be found here.

The Scottish Government’s legislative programme for 2016‑17 contains provision for a Bill to legislate for devolved tax to replace Air Passenger Duty in Scotland, one of the areas which, under the Act, the Scottish Parliament may legislate. It is proposed that the Bill will be brought forward in the first year of the current Scottish Parliament to allow a vote on the Government’s proposal to “design a tax that better fits the needs of Scotland’s economy and best supports (its) strategic objective to boost Scotland’s international connectivity”. The replacement tax would be intended to come into effect in April 2018. It remains to be seen what exactly the Scottish Government will propose by way of replacement tax, but in doing so it may create any number of rates and bands, as well as any exemptions.

New Welfare Powers

The Act also conferred on the Scottish Parliament extensive new welfare powers, which are being introduced gradually. In September 2016, some of those powers were transferred from the UK Parliament to the Scottish Parliament, including the power:-

  • To create new benefits in devolved areas.
  • To top up reserved benefits (such as Universal Credit, Tax Credits and Child Benefit).
  • To make discretionary payments and assistance.
  • To change Employment Support.
  • To make changes to Universal Credit for the costs of rented accommodation.
  • To make changes to Universal Credit on the timing of payments and recipients.

Other welfare powers will transfer at a later date, and a joint Ministerial Working Group on Welfare has been meeting regularly as part of the ongoing process to transfer those remaining welfare powers under the Act, which include responsibility for carers’ and disability benefits, maternity payments and funeral payments. Most recently, the Group met on 11th October 2016, to agree the next steps to do so.

On income tax, over which, under the Act, the Scottish Parliament has legislative freedom to set as many bands and at as many rates as it wishes, the Scottish Government has indicated that it will not follow the UK Government’s plans to extend the threshold for paying the higher rate level of income tax of 40p from £43,000 to £45,000.

It remains to be seen what further use of these new powers the Scottish Government proposes to make.