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SNP snub plan for more tax powers at Holyrood

THE SNP has rejected a report calling for Holyrood to be given control over £22 billion a year in taxes – two-thirds of all revenue raised in Scotland.

The report, by the Institute for Public Policy Research (IPPR), said Scotland could collect 100% of income tax, a proportion of VAT, and alcohol, tobacco and air-passenger duties.

But Deputy First Minister Nicola Sturgeon said: "The only way Scotland can achieve control of our own resources and gain the powers that we need to grow the economy, create jobs, and have a fair welfare state is to vote yes in next year's referendum."

Former Labour chancellor Alistair Darling, who leads the Better Together campaign against Scottish independence, moved last night to brand the SNP "anti-devolution" for its response to the report.

He welcomed the report as a positive contribution to the devolution debate and seized on Ms Sturgeon's remarks, saying: "Given the opportunity to welcome proposals for further devolution, the Deputy First Minister made it clear that the Nationalists have no interest in anything other than full separation from the United Kingdom."

The IPPR, which has close ties to Labour, said that while the Scottish Parliament was due to get more tax powers through the 2012 Scotland Act, Westminster should go further and devolve even more powers, including all personal income tax and a range of smaller taxes, including a proportion of VAT.

The £22bn represents 60% of Scottish revenue. Under the proposed new powers, which would come into force in 2016, some 30% would be handed over to MSPs. The rest of devolved spending would continue to be funded by a grant from the UK Government based on need.

Highlighting that the SNP in 1989 refused to join the Constitutional Convention on Scottish devolution and in 2007 opposed the Calman Commission's recommendations for further devolution, Mr Darling added: "Once again, the Nationalists stand outside the devolution debate.

"It is increasingly clear that the choice for Scotland is between devolution and an uncertain and risky future outside the United Kingdom.

"We will continue to argue for the best of both worlds: a strong Scottish Parliament with the security and opportunities of a strong UK."

Mr Darling's welcome for the report suggests its ideas could feed into Scottish Labour's own policy review. Scottish Labour leader Johann Lamont is preparing to publish an interim report on the party's thinking on further devolution this spring.

The general expectation is that Scottish Labour will argue for enhanced devolution, possibly devolving all income tax, to give a sharper edge to its fight against full independence and as a manifesto platform for the General Election in 2015 and the Holyrood election in 2016.

Constitutional expert Alan Trench, who wrote the report, said: "Devolution is about making the UK work better as a whole. It's clear that fiscal devolution needs to go a lot further than the Scotland Act 2012 does if it is to meet the aspirations of the people of Scotland or put the Scottish Government in a position to make its own policy choices."

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