The Scottish parliament could be given powers to control billions of pounds worth of income tax and housing benefit if Scotland votes no to independence, Scottish Labour have claimed today.
The party’s Devolution Commission said that Holyrood should be given new rights to set variable rates of income tax – possibly raising an additional £100m – and produce separate housing benefit policies from the rest of the UK.
Labour set out the new income tax powers as their central plank in the fight against independence and said it would allow the Scottish parliament to raise 40 per cent of its own finances, as well as transferring £1.7bn worth of housing benefit to Scotland.
The Devolution Commission’s report ‘Powers for a Purpose – Strengthening Accountability and Empowering People’ also suggested that Labour would reform the council tax system to make wealthier Scots pay more for public services.
The document said: “A system should be created which ensures that an updated and fairer system of property taxation continues to play an equitable part in supporting public services in the long run.”
At the document’s launch, Scottish Labour leader Johann Lamont added that Labour would reform the property tax system to “ensure that the rich pay a fairer share”.
Labour’s proposals, which are understood to have been endorsed by Ed Miliband, the UK party leader, also include:
• Giving Holyrood full control of the work programme to tailor unemployment policy to Scottish needs and devolving attendance allowance for carers, worth about £500m.
• Allowing Holyrood to control employment tribunals and set up a Scottish health and safety executive.
• Rejecting Scottish government demands to devolve corporation tax and air passenger duty – a proposal loudly supported by British Airways and Ryanair last month – because it would lead to tax competition in the UK and damage the environment.
• Requiring the crown estate to allow local councils and communities the power to control seabed, foreshore and land holdings in Scotland, which are key to renewables strategy.
• Working on a reform of local taxation with other parties, with an aim to introduce property taxes that impose higher rates on the largest or most valuable homes.
Nicola Sturgeon, Scotland’s Deputy First Minister, said the new proposals from Labour would fail to give Scotland the powers it needed.
“If we want to have the powers in Scotland that allow us to address the key challenges that we have as a country – how to grow the economy, how to grow our working age population and how to protect public services and close the gap between rich and poor – then we need to have full power over tax, employment, welfare and immigration,” Sturgeon said on BBC Radio Scotland.
To read the report in full, click here.