NICK Clegg has indicated the UK Government will not devolve corporation tax to Northern Ireland in the short term due to the "knock-on effects" in Scotland.

It is feared it may give the SNP ammunition in the referendum campaign enabling it to argue Holyrood should have similar powers.

The Deputy Prime Minister was asked at the House of Lords Constitution Committee if, after its review, the Coalition had decided if it will devolve corporation tax to Stormont.

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Mr Clegg said that the proponents of devolving the tax had a powerful case due to the discrepancy in corporation tax rates south and north of the Border on the island of Ireland.

The respective rates are 12.5% and 24%, although Chancellor George Osborne has said the UK rate will fall to 21% in 2014.

The Deputy Prime Minister described Northern Ireland's as a unique situation.

But he said: "I hope you will also recognise it's quite difficult for us in central government to take that decision in isolation from the knock-on effects that it might have in other parts of the United Kingdom as the debate on devolutionreaches a crescendo in the referendum in Scotland in 2014."

l Westminster may have to strip Scots of UK citizenship after independence or face a huge welfare bill, a Liberal Democrat MP has claimed.

Argyll and Bute MP Alan Reid said Scots could still be able to claim the Winter Fuel Allowance after a Yes vote.

Currently £13 million worth of winter fuel payments go abroad to expats.

Mr Reid told fellow members of the Commons Scottish Affairs Committee yesterday that the law would apply to Scots after independence as well.