Scotland Act 2012 receives Royal Assent


The Scotland Act 2012 received Royal Assent on 1 May. The Act provides for a substantial change to the devolution settlement, transferring tax, borrowing and other powers from Westminster to the Scottish Parliament.


The Scotland Act 2012 received Royal Assent on 1 May. The Scotland Bill was introduced into the Westminster Parliament in November 2009 and was passed on 26 April 2012. Despite criticism of the Bill by the current SNP Government the Scottish Parliament also gave its unanimous legislative consent to the Bill. The 2012 Act is based on the recommendations of the Calman Commission, an independent review of the provisions of the Scotland Act 1998.

The 2012 Act amends the boundaries of the devolution settlement, transferring substantial tax, borrowing and other powers from Westminster to the Scottish Parliament.

Financial provisions

The Scotland Act 1998 devolved very limited tax powers. The Scottish Parliament had power to vary the basic rate of income tax by up to 3 pence in the pound, a power that has never been used; otherwise taxation was reserved to Westminster. Therefore while the Scottish Government had discretion over expenditure of public money across a wide range of devolved responsibilities, the vast majority of its income was funded through a UK Treasury block grant. The 2012 Act, when implemented, will transfer a range of fiscal powers to the Scottish Parliament:

the power to set a Scottish rate of income tax for Scottish taxpayers. This will “sit on top of” the existing UK rate structure, and allow the Scottish Parliament to apply a higher or lower rate of income tax to income derived from earnings, profits and pensions. The Act includes a statutory test, based on an individual’s main place residence, in order to identify a “Scottish taxpayer”. The tax will be administered by HM Revenue & Customs and is expected to apply from April 2016;
the power to impose a new tax on land transactions in Scotland, effectively replacing Stamp Duty Land Tax;
the power to impose a new tax on waste disposal to landfill in Scotland, effectively replacing Landfill Tax;
when the necessary legislative and administrative arrangements are in place (expected to be from April 2015) Stamp Duty Land Tax and Landfill Tax will be disapplied in Scotland;
the Act also introduces a power to introduce additional devolved taxes in Scotland. Any such tax must be introduced by an Order in Council, approved by both Houses of the Westminster Parliament and the Scottish Parliament; and
the power to borrow up to £2.2 billion for capital expenditure. This is expected to be in place by April 2015.

Other provisions

The Act contains a range of other provisions including:

devolving the power to make regulations determining the national speed limit in Scotland, and prescribing the drink-driving limit on Scottish roads;
devolving the power to regulate air weapons and some powers relating to the misuse of drugs;
giving the Scottish Ministers a formal role in the appointment of a BBC Trust member for Scotland and a Crown Estate Commissioner with special responsibility for Scotland; and
providing a new right of appeal from Scottish criminal courts to the UK Supreme Court in questions of compatibility with the EU law and Convention rights.

And finally...

The Act renames the “Scottish Executive” as the “Scottish Government” and substitutes the term in previous enactments, instruments and other documents. While “Scottish Government” has been widely used over the past few years the legal entity, established in the 1998 Act, has always been the Scottish Executive.


The 2012 Act, once implemented, undoubtedly brings a very significant change in the devolution settlement. The transfer of tax-raising powers represents a new stage in devolution, permitting the Scottish Parliament a greater measure of control over, and accountability for, taxation in Scotland.

Of course the Act comes during a period of intense debate over Scotland’s constitutional future and its reception naturally reflects that debate. The Westminster Government regards the Act as strengthening the devolution settlement while the Scottish Government considers it a missed opportunity. In particular the Scottish Government had argued for devolution of Corporation Tax and Excise Duties. Both Governments have consulted on the terms and timing of a referendum on Scottish independence, with the Scottish Government consultation ending on 11 May.