Lib Dems want Holyrood to have total control over raising funds

Published on Sunday 7 September 2008 22:20

HOLYROOD should be given complete control over income tax, the Liberal Democrats are expected to demand as part of the review of devolution.

The findings of the Steel Commission, chaired by the former Liberal leader Sir David Steel, has supported the view that new tax-raising powers and far more strategic policy control should be given to Scottish Parliament.

The commission is now considering which taxes should be handed over, but a senior Scottish Liberal Democrat source said the commission was likely to recommend total control of income tax levels as well as smaller taxes like stamp duty.

"The view seems to be that varying income tax levels by 3p or any other rate is not nearly enough and we need to take complete control of income tax in Scotland as well as other taxes where it is feasible," he said.

Tavish Scott, the Scottish Liberal Democrat leader, has formally presented the report to the Calman Commission, the body set up by the UK government to look at the future of devolution. The document was approved by the party's MPs, MSPs and MEPs at a meeting last week.

The report points that total fiscal autonomy or home rule – which would see Scotland take total responsibility for taxes while sending money to Westminster for defence and foreign affairs – does not exist anywhere else in the world, but fiscal federalism, which allows regions to take control of most taxes, is a tried and tested model.

Mr Scott said: "We believe that the recommendations and conclusions of the Steel Commission stand the test of time and offer a strong framework for a new settlement for Scotland in the UK."

The Liberal Democrats received a boost when former Labour first minister Henry McLeish also came out in favour of a federal system for the UK.

He wants Scotland to have more tax raising powers and said that there should be an equivalent English parliament to Holyrood. His comments followed an admission by Gordon Brown last week that Holyrood needed to be more accountable for raising money not just spending it.