HOLYROOD should be allowed to use its new fiscal powers to top up some welfare payments to help tackle poverty and injustice in Scotland, Gordon Brown has suggested.

In a speech to the Glasgow State of the City Economy Conference, the former Prime Minister also lumped the Nationalists and the Tories together for wanting to end the key pooling of resources across the United Kingdom by proposing full devolution of income tax; a policy the Kirkcaldy MP feels would ultimately lead to the break-up of Britain.

Mr Brown, who played a pivotal role in the referendum campaign, suggested 17 powers should be transferred to Scotland as part of the UK party leaders' joint vow to deliver further devolution.

Senior political figures at Westminster and sources close to the Smith Commission have all expressed confidence that the cross-party attempt to agree on new powers will succeed, with an announcement by Lord Smith due on Thursday. In his speech, the former Labour leader said: "When it comes down to it, the difference between us and the Nationalists, and perhaps now the Tories also, is that we want to maintain that system of pooling and sharing resources across the UK, which works in the interests of the people of Scotland and Britain as a whole.

"While the SNP would, out of principle, end sharing and many Tories now favour fiscal autonomy which would represent an end to sharing, we believe firmly the Scottish Parliament is stronger and the Scottish people better off socially and economically by continuing to co-operate and share risks and resources in vital areas across the UK."

Mr Brown called for Holyrood ministers to be given a "very clear power" that would allow them to increase benefit payments.

The ex-PM said: "By giving Scots the power both to increase the incomes of the poorest families and to vary rates of tax at the top, Scotland would be in a position to make many of its own decisions to advance social justice."