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Labour: We could use new devolved powers to increase tax for top earners

Scottish Labour has suggested that it may use new devolved powers to tax the country's highest earners.

Its leader Johann Lamont said such a move would redistribute wealth and help fund public services.

The party will this week unveil its plans to give the Scottish Parliament additional powers if there is a No vote in September's independence referendum.

UK Labour leader Ed Miliband has pledged to bring back the 50p top rate of tax.

Earlier this month First Minister Alex Salmond refused to make clear if the 50p tax rate would be reintroduced in an independent Scotland.

He was pressed on the issue at First Minister's Questions by Ms Lamont, who accused him of wanting to ''out-Tory the Tories on tax in an independent Scotland''.

Ms Lamont indicated that Labour may introduce higher taxes for high earners if Holyrood gains more control over income tax.

She said: "It's linked to the pooling of resources across the UK and it could mean the redistribution of wealth to meet the needs of public services.

"Ed Miliband has already said a Labour government at Westminster would reverse the 45p rate of tax and have a fairer system.

"It's about testing if there's a consensus for policies in Scotland and we'll have a robust conversation with the electorate."

The issue of further devolution has been considered by a special commission set up by Labour in Scotland.

Former prime minister Gordon Brown revealed his submission to the group earlier this week, in which he proposed Holyrood should be responsible for raising about 40% of the cash it spends.

Mr Brown put increased powers over income tax at the heart of a six-point plan to reshape devolution.

Scottish Labour will hold their party conference next weekend.

Ms Lamont also said that the party would continue its review of free services such as university tuition and NHS prescriptions in the run-up to the next election.

SNP Business Convener Derek MacKay said: "Labour's axe continues to hang over the social policies that have been delivered by the Scottish Parliament. Instead of spending her time talking about tax powers she doesn't have, Labour must use their conference to set out which of the popular policies of the Scottish Parliament they plan on cutting.

"When Johann Lamont made her infamous 'something for nothing' speech she put free personal care, national concessionary travel, free university tuition and the abolition of prescription charges on the chopping block - but she hasn't given voters a single answer as to what she would cut."

He added: "Before Labour set out their half-hearted proposals for Scotland's future, the people of Scotland have a right to know which of the gains of devolution they are planning on cutting."

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