Scotland Act 1998 and Devolution Settlement
Introduction
The Scotland Act 1998 established the Scottish Parliament and the Scottish Government, creating a devolution settlement that fundamentally altered the constitutional architecture of the United Kingdom. Following a referendum in September 1997 in which 74.3% of voters supported a devolved parliament, the Act received Royal Assent on 19 November 1998, and the Scottish Parliament convened for the first time on 12 May 1999. The settlement has since been significantly expanded by the Scotland Act 2012 and the Scotland Act 2016, evolving from a limited grant of administrative competence to a substantial legislative and fiscal settlement.
The Scottish Parliament
The Scottish Parliament is a unicameral legislature of 129 Members of the Scottish Parliament (MSPs). The electoral system is the additional member system (AMS), combining 73 constituency MSPs elected by first-past-the-post with 56 regional MSPs elected from eight electoral regions by closed party lists. This mixed-member proportional system produces broadly proportional outcomes while preserving constituency representation. The Parliament’s Presiding Officer is elected by MSPs and performs functions analogous to the Speaker in the House of Commons. The Parliament has full legislative competence over devolved matters within the limits set by the Scotland Act. Its legislation takes the form of Acts of the Scottish Parliament, which have equal status to Acts of the UK Parliament within their area of competence. The Parliament is elected for fixed four-year terms, though provisions exist for early dissolution.
Legislative Competence
The Scotland Act 1998 defines what the Scottish Parliament cannot do. Acts of the Scottish Parliament are not law if they relate to reserved matters, which are listed in Schedules 4 and 5 of the Act. Reserved matters include the constitution, foreign affairs, defence, national security, immigration, fiscal and economic policy (with exceptions), social security (with exceptions), broadcasting, and energy. The Act also prohibits the Parliament from legislating incompatibly with the European Convention on Human Rights or with EU law (subject to post-Brexit modifications). The Scottish Government can refer bills to the Supreme Court for a pre-enactment ruling on competence. The Lord Advocate and the Attorney General can also refer bills. Post-enactment challenges can be brought by anyone with sufficient interest. The Supreme Court has decided numerous competence references, developing a substantial body of case law on the boundaries of devolved power. The continuity of the UK Parliament’s sovereignty is preserved: the Scotland Act expressly provides that the UK Parliament may legislate on devolved matters, though the Sewel convention limits the exercise of this power.
Reserved and Devolved Matters
The division between devolved and reserved matters is central to the Scottish settlement. Devolved matters include health, education, housing, local government, tourism, sport, transport (within Scotland), justice and policing, environment, agriculture, fisheries, forestry, and culture. The Scottish Parliament has primary legislative competence over these matters. The Scotland Act 2012 expanded devolved competence to include stamp duty land tax, Scottish rate of income tax (a limited power to vary the basic UK rate), and various miscellaneous matters. The Scotland Act 2016 represented the most significant expansion of devolved powers. It devolved substantial social security powers, including disability benefits, carer’s allowance, and winter fuel payments, enabling the Scottish Parliament to create a distinct Scottish social security system. The Act devolved further tax powers, including full control over income tax rates and bands on non-savings, non-dividend income, and assignment of a proportion of VAT revenues to Scotland. It also devolved management of the Crown Estate (including Scottish assets and revenues), control of Scottish elections, and responsibility for on-shore oil and gas licensing. The 2016 Act recognised the Scottish Parliament and Scottish Government as permanent institutions of the UK constitution.
The Sewel Convention
The Sewel convention (named after Lord Sewel, the government minister who articulated it during the Scotland Act’s passage) provides that the UK Parliament will not normally legislate on devolved matters without the legislative consent of the Scottish Parliament. The convention is given statutory recognition in section 28(8) of the Scotland Act 1998 (inserted by the Scotland Act 2016), which states that the UK Parliament “will not normally” legislate on devolved matters without consent. In R (Miller) v Secretary of State for Exiting the European Union (2017), the Supreme Court held that the Sewel convention is a constitutional principle but is not legally enforceable by the courts. The UK Parliament retained the legal power to legislate on devolved matters without consent, and it did so during the Brexit process, passing the European Union (Withdrawal) Act 2018 without the consent of the Scottish Parliament. This has seriously strained the convention’s political force.
Fiscal Powers
The Scottish Parliament’s fiscal powers have expanded considerably. The Scotland Act 2012 introduced the Scottish rate of income tax, enabling the Parliament to vary the basic rate by up to 10p. The Scotland Act 2016 gave the Parliament full control over income tax rates and bands (except the personal allowance). The Scottish Parliament also has competence over Land and Buildings Transaction Tax (replacing UK stamp duty land tax) and Scottish Landfill Tax. The Fiscal Framework agreed between the UK and Scottish governments governs the financial arrangements, including the operation of the Block Grant Adjustment mechanism, the Scotland Reserve (a borrowing and saving mechanism), and the annual reconciliation process. The Scottish Government can borrow from the UK Government and the National Loans Fund for capital expenditure within limits set by the Fiscal Framework. The Scottish Fiscal Commission provides independent economic and fiscal forecasts and scrutiny.
Conclusion
The Scottish devolution settlement has evolved from a relatively modest grant of administrative competence to a comprehensive legislative and fiscal settlement. The process of evolution has been characterised by periodic expansion following political pressure and recommendations from bodies such as the Calman Commission (2009) and the Smith Commission (2014). The settlement remains contested: the Scottish National Party advocates for Scottish independence, while unionist parties seek to maintain the current settlement or expand it further. The long-term stability of the settlement will depend on the resolution of fundamental questions about the distribution of powers, fiscal arrangements, and the accommodation of Scottish national identity within the Union.