The Smith Commission was announced by Prime Minister David Cameron on 19 September 2014 in the wake of the 'No' vote in the 2014 Scottish independence referendum. The establishment of the commission was part of the process of fulfilling The Vow made by the leaders of the three main unionist parties during the last days of the referendum campaign. The Vow promised the devolution of more powers from the Parliament of the United Kingdom to the Scottish Parliament in the event of a No vote.
Following the No vote, Lord Smith of Kelvin was given the task to "convene cross-party talks and facilitate an inclusive engagement process across Scotland to produce, by 30 November 2014, Heads of Agreement with recommendations for further devolution of powers to the Scottish Parliament". Ten representatives were nominated by the political parties with elected members in the Scottish Parliament; the Commission started its discussions on 22 October. Agreement was reached and the report published on 27 November 2014.
Following the Conservative election victory at the 2015 UK General Election, the Scotland Bill 2015–16 was proposed in the first Queen's Speech, to put into effect the recommendations of the Smith Commission.
The Vow was a joint statement by the leaders of the three main unionist parties, David Cameron, Ed Miliband and Nick Clegg, promising more powers for Scotland in the event of a No vote. Included in The Vow was that in the event of a No vote:
The Vow was published in the Daily Record, one of the main tabloid newspapers in Scotland that also backed a No vote in the referendum. The explanation and background to the publication of The Vow was explained in the Daily Record itself one year after the referendum when it outlined that following a poll showing the 'Yes' side ahead, it was felt that firm promises of more powers were required from the 'No' side.
The five political parties with representation in the Scottish Parliament were each invited to nominate two representatives to the Commission. Those nominated were:
The commission invited submissions from individuals and organisations before a deadline of 31 October. Approximately 14,000 emails and letters were received from the public, with a further 250 contributions from groups.
The Conservatives, Labour and Liberal Democrats, who had all supported a no vote in the referendum, each submitted proposals which were similar to the findings of commissions they had each established before the referendum. The SNP and Scottish Greens, who had supported a yes vote, called for what was described by BBC News as "devo max".
The Scottish Trades Union Congress called for the full devolution of income tax, many welfare benefits and a different immigration policy. The Institute of Chartered Accountants of Scotland pointed to the possible risks and additional administration costs caused by having different tax systems and rates.
Three Scottish airports (Edinburgh, Glasgow and Aberdeen) proposed that Air Passenger Duty (APD) should be devolved, with a view to it being abolished in Scotland. The airports cited the restrictive effect on tourism of APD, which raised about £200 million in revenue during the 2013/14 fiscal year. WWF Scotland opposed the devolution of APD in its submission, citing the growth in carbon emissions from air travel. The Scottish Government previously called for the devolution of APD in 2011, when it was devolved to Northern Ireland. This action had been taken in anticipation of a similar tax being abolished in the Republic of Ireland.
The report highlights three main Heads of Agreement. These are:
The following list are the issues discussed within the Heads of Agreement:
The commission also considered devolving the power to vary all elements of Universal Credit (rather than just its housing element) but this did not appear in the commission's final recommendations.
In October 2014 the House of Commons Political and Constitutional Reform Committee heard evidence that was critical of the timetable set for the Smith Commission. Professor Michael Keating said he believed that the condensed timetable, which called for draft legislation by January 2015, was unrealistic. He warned of the risk that agreement would unravel because there was insufficient time to consider technical issues. Both Professor Keating and Professor Nicola McEwen said this was due to political pressures, with the unionist party leaders having vowed to grant additional powers and a United Kingdom general election due to be held on 7th May 2015.
The Scottish Socialist Party were not invited to be part of the Smith Commission, leaving them the only one of the six political parties that had registered with the Electoral Commission for the referendum campaign that were not able to send a representative.
Nicola Sturgeon, Scotland’s first minister, commented "I welcome what is being recommended" but argued that it "doesn’t deliver a modern form of home rule". Claiming that too little power would be devolved to Scotland, she added "I want to have the power in our hands to create a better system to lift people out of poverty, to get our economy growing. That’s the kind of powerhouse parliament I want. Sadly it’s not the one that’s going to be delivered." Iain Macwhirter, writing in The Herald, argued that the lack of devolution of taxes other than income tax would "lock Scotland in economic decline". Polling in November 2014 indicated that a majority of Scots wanted greater devolution than that recommended by the Smith Commission.
The SNP won 56 of the 59 seats contested in Scotland in the 2015 UK General Election, which was held on 7 May 2015. Speaking after the election, First Minister Nicola Sturgeon called for reforms greater than that proposed by Smith, particularly in respect of taxation and welfare. Former First Minister Jack McConnell described Smith as a "shambles" and called on Cameron to lead a new constitutional convention. Malcolm Rifkind, a former Secretary of State for Scotland, also expressed support for the idea of some sort of new commission. In response, Cameron said he would "look at" any proposals for further powers for Scotland but wanted to get the Smith Commission plans implemented first.
Once the Smith Commission's recommendations had been published they were debated in the UK Parliament and a command paper was published in January 2015 putting forward draft legislative proposals. A Scottish Parliament committee report published in May 2015 said that the draft bill proposed in January 2015 did not meet the recommendations of the Smith Commission, specifically in relation to welfare payments. A spokesman for the UK Government said that a full Parliamentary discussion would follow. A bill based on the Smith Commission's recommendations was announced by the UK government in the May 2015 Queen's Speech. The bill subsequently became law as the Scotland Act 2016 in March 2016.