Scotland stands to lose more as a result of controversial plans to bring in English votes for English legislation, experts have warned.

A new paper from the National Institute of Economic and Social Research (NIESR) argued that while new powers over income tax are to be devolved to Scotland, decisions about tax and spending in England would have a "much larger" impact on monetary policy decisions, such as the level of interest rates.

This gives a "rationale for allowing Scottish MPs to continue to vote on English fiscal policy", it added, even though English MPs will in the future have no say over income tax rates in Scotland.

The paper by Angus Armstrong, director of macroeconomics at the independent think tank, and research fellow Monique Ebell looked at the impact of English votes for English legislation - known as Evel - on monetary policy.

They stated: "Scotland stands to lose more by Evel than England.

"The reason is that the monetary policy chosen by the central bank will be much more strongly influenced by economic conditions in England than by those in Scotland.

"As a result, the impact of English fiscal policy decisions on overall monetary policy - and hence on Scotland - will be much larger than vice versa.

"In our view, this gives a rationale for allowing Scottish MPs to continue to vote on English fiscal policy, even when the issues at hand are only directly relevant under English jurisdiction."

While the paper added it would "be better if English MPs retained a vote on Scottish fiscal policy", it stated: "Because Scotland's impact on the central bank's monetary policy is so small, the losses to England from having a Scottish parliament with sovereignty over Scottish fiscal policy are also very small."

The UK Government has set out plans for Evel after new powers for Holyrood were recommended in the wake of last year's independence referendum.

Commons Leader Chris Grayling has set out proposals which would give English MPs, or English and Welsh MPs, a veto on measures which would not apply in Scotland.

Last week he brought forward amendments in a bid to provide reassurance over the right of all MPs to vote on the Budget and finance matters.

But his plans were rejected wholesale by opposition MPs in the House of Commons while some Tories continued to express unease.

Meanwhile, peers have inflicted a large, embarrassing defeat on the Government over its plans for Eve.

The House of Lords backed a call from former head of the civil service Lord Butler of Brockwell to establish a joint committee of peers and MPs to debate the proposals.

Although Lord Butler’s move will have no practical effect unless the House

of Commons agrees to set up the committee, the vote, which the Government lost by 320 to 139, majority 181, signifies peers’ anger at the scheme.

Ministers have already been forced to abandon plans to push through the changes to give England’s MPs a veto over English laws before the summer recess, postponing a vote on whether to go ahead with the amended standing orders until at least September.

Lord Butler, who was supported by peers from all sides of the House, said that though he backed a form of Evel there were better ways of doing it than the Government plan.

He was backed by Labour leader in the Lords Baroness Smith of Basildon who described the idea of a joint committee as a “wise and moderate” plan.

But Baroness Stowell of Beeston, the Lords leader, urged peers not to support Lord Butler and said the plan for Evel was in the Conservative manifesto at the general election.

“There does come a point where we need to stop talking and get on with taking some action,” she said.

Lord Butler told peers: “We cannot compel the Commons to set up a joint committee, but what we can do today is say we believe this is a matter for Parliament as a whole not a matter just for the House of Commons and it is best approached by Parliament as a whole.”