Scottish Parliament may win greater tax powers

The Scottish Parliament may be given the power to vary income tax by up to 10p in the pound, the Government will announce today.

Jim Murphy, the Secretary of State for Scotland, will tell the Commons in a statement that Labour would give Scotland control of about £6bn in new tax powers, offset by an equivalent cut in the annual £30bn grant the country receives from the Treasury.

In a White Paper, "Scotland's Future in the United Kingdom," Mr Murphy will endorse the central recommendations of a review of Scottish devolution by a commission chaired by Sir Kenneth Calman, which was published in June. It said the Holyrood Parliament should control half the 20p basic rate and a quarter of the upper 40p rate, allowing it to vary both rates up or down by 10p in the pound. But it would not be able to change the differential between the two rates—for example, to pursue a "soak the rich" strategy.

When the Blair government set up the Scottish Parliament in 1999, it was given the right to vary the basic rate of tax by 3p in the pound. But no party has yet sought to use the power.

Labour hopes that today's plan to "deepen" devolution will head off the Scottish National Party's demands for total independence from London.

However, Mr Murphy will concede that legislation to bring in the significant changes would not be introduced until after the general election next year. Ministers admit there is no Parliamentary time available for such a measure, so it would instead be included in Labour's election manifesto.

With opinion polls pointing to a Conservative victory, Labour's critics may describe the commitment to a 10p tax-varying power as "window dressing" since it might never be implemented.

Although the Calman Commission report was given a broad welcome by Labour, the Tories and Liberal Democrats in June, the Government's move could create a dilemma for an incoming Tory government. While committed to extending localism and anxious not to repeat its hostility to the creation of the Holyrood Parliament, some Tories might have reservations about such a radical change. "It's a headache for us," one senior Tory admitted yesterday. "No doubt that's what Gordon Brown intends it to be. We will consider our options carefully."

Labour's embrace of greater fiscal independence will not satisfy the SNP, which wants full autonomy for Scotland, saying income tax was a "blunt instrument" and dismissing the Calman package as a "messy fudge". The SNP said: "At present, we have a pocket-money parliament – under the Calman proposals, Scotland would have a Saturday job but the pay would be deducted from our pocket money."

The SNP Government, led by the First Minister Alex Salmond, has promised a White Paper next Monday outlining for a referendum on independence for Scotland.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Service and Installation Engineer

£22000 - £28000 per annum: Recruitment Genius: A fantastic opportunity has ari...

Recruitment Genius: SEO / Outreach Executive

£20000 - £23000 per annum: Recruitment Genius: Our client is a global marketin...

Recruitment Genius: Junior Estimator

£17000 - £18000 per annum: Recruitment Genius: A fantastic opportunity has ari...

Recruitment Genius: Sales Negotiator - OTE £24,000

£22000 - £24000 per annum: Recruitment Genius: An enthusiastic individual is r...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?