Government Seeks Backing On Tax

The Scottish Government is expected to seek the Scottish Parliament's backing for full control of all taxes and welfare in the next round of devolution.

The SNP administration will lead a debate on the Smith Commission on Scottish Devolution at Holyrood today.

The Scottish Government's motion is expected to pass with the backing of the SNP's parliamentary majority.

Rival proposals by its main opposition Labour are expected to come under close scrutiny amid an internal party dispute over its scope, and a wider debate on the future of the party following the resignation of leader Johann Lamont on Friday.

Labour's devolution plan has faced repeated setbacks including criticism by the left-wing Red Paper Collective, which counts prospective leadership candidate Neil Findlay amongst its members.

Red Paper say Labour must go beyond its cautious bid to devolve three-quarters of the basic rate of income tax and back full devolution of income tax to Holyrood "to allow the Scottish Parliament more flexibility in creating a progressive tax system, improving public services and increasing redistribution''.

It follows a similar plea by a new group called Labour for Scotland, which includes former MSPs Frank McAveety and Pauline McNeill and has the support of current MSPs Michael McMahon and Cara Hilton.

It has urged Scottish Labour to change its name to the Independent Labour Party, become fully autonomous from the London leadership, and back full control over income tax and welfare.

A former adviser to the Labour-led Better Together campaign described the party's devolution offering as a "fudged'' social programme without any clear budget constraint.

Professor Ronald MacDonald, from Glasgow University, backed the tight budget constraints of the Conservatives, Liberal Democrats and the Greens, but said the SNP's own budget constraints lacked the necessary provision for the "welfare union'' required to maintain the integrity of the UK.

The Scottish Government has called for full responsibility for all taxes to be transferred to Scotland, including powers over income tax, national insurance, corporation tax, capital gains tax, fuel duty, air passenger duty and inheritance tax.

It wants Holyrood to be given responsibility for all domestic spending, including welfare, with payments made to the UK Government for reserved services.

The SNP is calling for an agreement with Westminster on an overall approach to public finances, including a commitment to continue the Barnett Formula - used by the Treasury to allocate public spending around the UK - during any transitional period.

It is also seeking control over employment policy, areas of transport policy not already devolved, competition, energy and broadcasting policy and the Crown Estate.

Holyrood should also be responsible for Scottish elections and have its own human rights and equalities framework, and should be able to directly represent its interests on devolved matters in the EU, the SNP said.

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