LABOUR is calling for all the cash raised from VAT in Scotland to be assigned to Holyrood, giving MSPs even greater financial power.
Shadow Scottish secretary Ian Murray said the change would increase the Scottish Parliament’s spending power by £5 billion.
The Scotland Bill, which is currently going through Westminster, proposes assigning some of the money raised from VAT in Scotland to Holyrood.
But Labour have put forward an amendment calling for all the money raised from the levy in Scotland to be assigned to the government there.
Mr Murray said: “Labour is the party of devolution. It was a Labour Government, after a decision by people across Scotland, that created the Scottish Parliament in 1999 and we will show that same ambition and determination in pushing for more powers in the Scotland Bill.
“We are focused not just on making sure that the Scottish Parliament gets the powers it needs, but also on how we will use those powers to improve the lives of people across the country.”
As well as calling for all VAT revenues raised in Scotland to be assigned to Holyrood, Labour has put forward amendments that would allow the Scottish Parliament to top up welfare payments when when an individual has been sanctioned.
The party is also calling for an investigation into concerns raised by charities across Scotland about the impact that Holyrood’s new income tax powers could have on the Gift Aid system.
Mr Murray said: “We have approached the Scotland Bill constructively, because this is a real opportunity for people across Scotland, and we want to make sure they get the powerhouse Parliament at Holyrood they were promised.
“Our amendments would significantly increase the powers currently in the Scotland Bill by assigning £5 billion more of revenue and ensuring that the Scottish Parliament has the powers over welfare that Scotland needs to design its own social security system.
“We are also pushing the Government to review the Gift Aid system in light of the new income tax powers. Many charities across Scotland have raised with me their concerns about the impact on gift aid. It’s essential that we get to the bottom of these issues before the new powers are implemented.”
Scottish Labour’s democracy spokeswoman, Claire Baker said: “The full powers of the Smith Commission will give Scotland one of the most powerful devolved Parliaments in the world, that’s why the Scottish Labour Party will ensure they are delivered in full.
“These powers will give the Scottish Parliament significant control over the social security system in Scotland and the ability to create a new social security system for Scotland.
“It’s essential that when these powers are devolved, power isn’t hoarded in Holyrood. We have to empower local government and communities across Scotland by devolving more power to them as well. We need to give people powers to challenge a Scottish Government which has been one of the most centralising administrations Scotland has had.”