Sturgeon: disappointing devo powers package means continued Westminster rule

She warned their delivery may be hampered by "sabre-rattling" at Westminster over proposals for English MPs to vote on English laws.

Labour's Jackie Baillie pressed Ms Sturgeon to endorse Lord Smith of Kelvin's recommendations, which she said would deliver a "powerhouse parliament", during First Minister's Questions at Holyrood.

Ms Baillie said the package represented the most substantial transfer of powers to Scotland since the Parliament was established in 1999.

The First Minister paid tribute to the work of Lord Smith and welcomed the proposals he has set out.

She said: "I want this Parliament to be as powerful as possible, so I welcome any new powers that come to it. Those powers, though, now have to be delivered.

"If some of the sabre-rattling we're hearing on English votes for English laws is anything to go by, that might not be as smooth as we think.

"But can I say I think the package is disappointing."

She quoted Grahame Smith, Scottish Trades Union congress (STUC) general secretary, who has described the recommendations as "underwhelming" and said they did not go far enough to allow the Scottish Parliament to tackle inequality in Scotland.

She continued: "Seventy per cent of our taxes continue to be set at Westminster, 85% of social security spending controlled at Westminster, this Parliament responsible for less than half of the money we will spend.

"It's not so much the home rule promised, in so many respects it's continued Westminster rule."

Ms Baillie said the consensual approach taken by Ms Sturgeon in her first appearance at First Minister's Questions last week had "lasted less than a minute".

"Before the ink is dry, the SNP are already unpicking the consensus," she said.

Ms Baillie said of the new powers: "Any politician not electrified by the possibilities that these new powers present for us - because they do, they present for us the opportunity to change the lives of the most vulnerable people in our country - needs to ask themselves if they are in the right job."

She called on Ms Sturgeon to support Labour's proposals to raise the top rate of income tax to 50p.

The First Minister responded: "If I was taking that decision now, yes, I would raise the top rate of income tax to 50p.

"SNP MPs voted against the reduction of the top rate of tax in the House of Commons, Labour MPs didn't turn up to vote. That's the reality.

"The real question Labour should be asking itself this morning is this one: how has it managed to find itself on the same side as the Tories and on the wrong side of the STUC? What has gone wrong with Labour?"

She highlighted other organisations including One Parent Families Scotland, Engender Scotland and the Scottish Council for Voluntary Organisations (SCVO), who she said had all expressed disappointment with the Smith Commission proposals.

Ms Sturgeon cited additional powers such as control over job creation, the minimum wage, the personal allowance of income tax, national insurance contributions and universal credit.

"Those are the kind of powers any self-respecting Labour Party would be arguing for instead of siding with the Tories," she said.

Ms Baillie countered that the Parliament will now be responsible for a range of work-creating powers in addition to £3 billion of welfare, including disability living allowance, personal independence payments and carers allowance.

She said: "These are serious and substantial powers. The First Minister has been in the job for a week, she's been handed the biggest transfer of powers since the Parliament was established in 1999. Frankly I would be excited by that.

"All she can talk about is what she hasn't got and what she can't do. Surely she should be focused on what she can do with these new powers to change the lives of people across Scotland."

She accused Ms Sturgeon of not understanding the mood of the country and challenged her to confirm that the referendum was a "once-in-a-lifetime opportunity".

Ms Baillie said: "The vow made to the people of Scotland has been delivered, before St Andrew's Day, ahead of schedule. Promise made, promise delivered."

The First Minister responded: "I don't want just to have the power to top up Tory cuts to welfare, to put a sticking plaster on a broken system.

"I want to have the power in our hands to create a better system to lift people out of poverty, to get our economy growing.

"That's the kind of powerhouse Parliament I want, sadly it's not the one that's going to be delivered."

She added: "Labour increasingly has to worry about being on the wrong side of the people of Scotland and when it comes to the general election in May I think they're going to find out just how much on the wrong side of the people of Scotland they have become."

Conservative leader Ruth Davidson and Liberal Democrat leader Willie Rennie also criticised the First Minister's response to the commission's recommendations.

Ms Davidson said the Scottish Parliament Information Centre (SPICe) stated that nearly 60% of all money spent by the Scottish Government would now have to be raised by the Scottish Government.

"We all know that anything short of independence wouldn't satisfy the First Minister," she said.

"But she should remember that that was the one option that the people of Scotland roundly rejected.

"This is a big bold package of measures, so why can't the First Minister give it the warmer welcome it clearly deserves?"

Ms Sturgeon said the Parliament would be responsible for raising less than half of the money it spends.

"Even if Ruth Davidson is correct, is that the limit of her ambition?" she asked.

"That we control 60% of all of the spending of this Government? How on earth can anybody describe that as a responsible powerhouse parliament?"

She added: "The ultimate verdict will be for the Scottish people, and I think at the general election in May the Scottish people have an opportunity to say to the Westminster parties, and to say it quite clearly, 'thanks very much for your opening offer, now we want to up it'."

Ms Davidson said: "The First Minister is purposefully missing the scope of what is proposed today.

"Holyrood will become one of the most powerful devolved parliaments on this planet."

She added that the new powers "can deliver for everyone in Scotland, no matter which way they voted at the referendum".

The First Minister said: "If she (Ms Davidson) believes that a situation which leaves 70% of our tax being set at Westminster, and 85% of our social security spending being controlled at Westminster, represents what was being described in the referendum campaign as genuine home rule, then I am afraid I take a different view, and I think the people of Scotland will take a very different view of this as well."

Mr Rennie said: "For the first time ever all Scotland's political parties have reached a powerful constitutional agreement.

"Three hours later, she (Ms Sturgeon) is sitting there, rubbishing the agreement she has just signed."

He added: "She can't keep on re-running the referendum.

"Can't the First Minister just give an unqualified support for this massive transfer of power, or always, was she just going to say this is never going to be enough?"

Ms Sturgeon responded: "If the Westminster parties carry on the way they are going, it won't be me forcing the re-running of the referendum, it will be them."

She called on Mr Rennie to support the transfer of control over disability living allowance and personal independence payments to Holyrood before cuts are imposed.

"As things stand, by the time we get those powers, the budget will have been cut by 20%...lets us as a Parliament say to the Westminster government to transfer those powers as soon as possible, and to do that before that cut is imposed," she said.