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Miliband: Salmond's plans for iScotland leave London controlling top rate tax

Alex Salmond's plans for an independent Scotland would see London in control of the top rate of income tax, Ed Miliband has claimed.

The UK Labour leader said the Scottish National Party (SNP) refused to match his party's promise to restore the 50p tax rate for top earners in a separate Scotland, in case it placed the country at a "tax disadvantage".

But Mr Miliband said that stance would mean "in an independent Scotland the top rate of tax would be set not in Scotland but in London, by a government in London with no Scottish representation".

He used his speech to the Scottish Labour conference in Perth to attack the SNP's record on social justice and insist Nationalist plans for an independent Scotland would lead to a "race to the bottom".

But as he made his speech Scottish Finance Secretary John Swinney said that Labour's "shambolic" plans for Scotland to get more tax powers had "imploded".

Labour set out its plans to extend devolution in the event of a No vote in the referendum earlier this week, announcing Holyrood would have the power to vary tax rates by up to 15p in the pound, giving Scotland control of three quarters of the 20p basic rate of income tax. In addition MSPs would also get powers to increase the higher rates of income tax.

The party said MSPs would have powers to alter all rates of income tax, including the new starting rate proposed by Labour of 10p.

Mr Swinney said: "Labour have been found out, and their shambolic plans have today imploded.

"Their sums don't add up, and no amount of back-pedalling and back of an envelope calculations can hide that."

He claimed Labour's plans had "collapsed completely under the weight of their own contradictions" and added: "These plans clearly can't work and will never be delivered - and it is now clearer than ever that only a Yes vote in September can deliver the powers Scotland needs."

Mr Miliband insisted though that Labour's proposals to give more power to Scotland would not create the "race to the bottom" that independence would bring about.

He said: "This is what we're putting forward - devolving more power over social security but still sharing risks. More flexibility over income tax rates but no race to the bottom when it comes to income tax."

He stressed the benefits of the UK, including "pooling our talents, pooling our resources, sharing the benefits and sharing the risks".

The Labour leader said: "When it comes to the 50p tax rate in some parts of the country there will be more people paying the 50p tax rate than other parts of the country.

"But it is right that they pay their fair share to support people across our country, because we are better together. This is the whole idea of the United Kingdom, that we share these risks and it doesn't matter to us if people are Scottish, English, Welsh or Northern Irish.

"We support each other because of our ties, because of our bonds and on that basis we redistribute."

Mr Miliband began his speech by paying tribute to former Labour leader John Smith, who died 20 years ago, hailing him as "Labour's lost leader, Scotland's lost leader, Britain's lost leader".

He highlighted Mr Smith's commitment to social justice, and urged his party to win September's independence referendum to "be true to his legacy".

Mr Miliband said: "That flame of social justice still burns, let us be true to the legacy of John Smith and let us win the fight to keep Scotland as part of the United Kingdom."

With the vote on Scotland's future taking place later this year, he went on: "This is no ordinary conference and no ordinary times. In 180 days Scotland will vote to determine its future.

"I want to be very clear, this is Scotland's decision and Scotland's decision alone. But all of us in this room, all of us in the Labour Party know that we are better together."

He said he believed "passionately" that the "right choice for Scotland is to stay in the United Kingdom", telling activists that his party must "focus on tackling injustice and inequality wherever we find it".

He argued that "if there was a border across the UK, England and Scotland divided, that would mean a race to the bottom because companies would be saying if you put in place that policy, we will move our company across the border".

Mr Miliband went on: "That is why we need fair rules across the United Kingdom, that is why we are better together."

He said the SNP had "no plans for social justice" and had to be "dragged kicking and screaming" to act on the so-called bedroom tax.

Mr Miliband also criticised the Nationalists for failing to match Labour's plans to freeze electricity prices.

"They have no answer, they can't match us," he said.

Instead he said Mr Salmond's first priority in an independent Scotland would be to cut corporation tax for businesses.

"Once again, its about the race to the bottom," the Labour leader claimed.

"The SNP vision of an independent Scotland is the race to the bottom, David Cameron and Alex Salmond at the starting blocks."

But he insisted: "You can't build social justice if that is your approach, you can't be a narrow Nationalist and stand up for social justice, that is what we are showing in this referendum campaign.

"People should not believe the SNP argument there is a Tory England and progressive Scotland.

"There are millions of people across the country who believe in our vision of equality, social justice, and fairness."

With his speech coming just two days after George Osborne's Budget, Mr Miliband also hit out at the UK Government for doing "nothing to tackle the cost-of-living crisis that so many families are facing".

He said it was a "Tory Budget that did nothing to ease the squeeze on family budgets of people across Scotland".

He also blasted a Conservative advert highlighting changes to beer and bingo taxes in the Budget as "patronising" and "out of touch".

The online advert said the 1p cut in beer duty and the halving of bingo duty would help "hardworking people do more of the things they enjoy".

Mr Miliband said: "Did you see that advert? Have you ever seen a more condescending, patronising, haughty, complacent, out of touch, misconceived piece of nonsense?"

He claimed that the Conservatives' "mask slips" when talking about the "hardworking people of Britain", adding: "The Tories say 'they', we say 'us'."

Yes Scotland chief executive Blair Jenkins said: "We agree with Mr Miliband's desire to create a country that is fairer, socially just and more equal.

"But the reality is that the UK is one of the most unequal countries in the developed world. That's happened not by an act of God, but from deliberate policy decisions of successive Westminster governments over many decades of failure.

"Growing numbers of Labour supporters are realising that Westminster isn't working for Scotland and hasn't been for a very long time. That has not diminished their desire to build a better and fairer nation which is as strong today as it was when John Smith was Labour leader.

"But as a new poll has just shown, Labour supporters are joining Yes in ever increasing numbers because they realise that putting Scotland's future in Scotland's hands is the best way to create the kind of country they want."

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