THE time for fiscal devolution in England has come, MPs have warned, as they made it clear the debate on independence was having a major influence on the so-called English Question.
The Commons Communities and Local Government Committee has called for England to gain more local tax-raising powers as David Sparks, the new leader of the Local Government Association, warned the argument over constitutional issues south of the Border was a timebomb.
Referring to the "huge funding discrepancy" between England and Scotland, Mr Sparks, the Labour leader of Dudley Council in the Midlands, told Total Politics magazine: "The English Question will not go away and it will blow up in Westminster. The fuse will be lit before the year is out.
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"Whether it is put out will depend on future governments."
Mr Sparks said if there was a No vote in September and Holyrood got devo-max, "de-facto independence", then "unless something is done in England, the English Question will fester".
He added: "We have a ready-made solution: devolution down to local authorities. It will revive local government and local democracy and be good for the country."
Chancellor George Osborne has spoken of creating a "northern powerhouse" with the prospect of linking major cities in the north of England to effectively create an economic hub to rival London. Meanwhile, Labour leader Ed Miliband has already promised to devolve £30 billion of Whitehall spending to the English regions if his party wins power.
In its report, the committee defined fiscal devolution as handing to local authorities the power to raise money through a range of existing and new taxes and charges, some responsibility for setting those taxes and the facility to borrow.
It said: "Fiscal devolution in England is an idea whose time has come.
"As devolution to Scotland and Wales has gained momentum it has brought with it significant fiscal devolution and the anomalous position of England has become starker.
"Many English cities and regions have economies larger than these countries. Why should they not have fiscal devolution too?"
The committee said local and central government should agree a framework of taxes, powers and responsibilities, which could be devolved and decentralised to local authorities in England after the General Election.
The MPs accepted fiscal devolution in England would be gradual but said Ministers needed to develop a "framework for devolution" that would gradually see all local authorities given power over business rates, stamp duty, council tax and other smaller taxes and charges.
The report noted: "Recognising what is happening in Scotland and Wales, we see a case in the long term for examining the apportioning in a similar manner to Scotland a percentage of income tax or VAT to groups of authorities covering significant geographical areas in England."
Labour's Clive Betts, the committee chairman, said: "The public might well ask 'when Scotland and Wales are being promised ever greater fiscal devolution, why not England?'
"Devolving these powers is the next step on the path to genuine localism."
Brandon Lewis, the UK Local Government Minister, said there was no public appetite for a "barrage of new stealth taxes".
He said that, rather than concentrating power on unaccountable tiers of municipal authorities, the Coalition believed in devolving power to councils, neighbourhoods and taxpayers.
First Minister Alex Salmond has made attempts to ensure ties between England and Scotland would remain in the event of Scottish independence.
In April, he made a speech in Carlisle that coincided with St George's Day, stating the countries would remain the "closest" of friends.