Scottish independence: Alistair Darling backs tax-raising powers

FORMER Labour chancellor Alistair Darling today backs a significant increase in the powers of the Scottish Parliament, saying it is time for MSPs to be given the responsibility for raising the money they are in charge of spending.

In a major intervention in the pre-independence referendum debate, Darling says it “isn’t satisfactory” for any parliament to spend cash when it doesn’t have “the pain” of also raising it.

He signals that income tax would be an obvious contender for transfer to Holyrood, saying that further devolution of the levy would be “relatively easy to implement”.

But, echoing Prime Minister David Cameron, he says such plans can be considered in detail only in the wake of a “no” vote on independence. Challenging First Minister Alex Salmond, who wants to hold off the referendum until autumn 2014, he says: “If you want to get onto further devolution more quickly, then why don’t we have the referendum more quickly?”

Darling’s comments, in an interview with Scotland on Sunday, come with a new pro-union campaign expected to be unveiled soon, with Gordon Brown’s former Chancellor being lined up to take a leading role alongside key figures from the Tories and LibDems.

Last week, , Cameron said he backed a fresh look at what further powers could be devolved north of the border. With Darling’s intervention, it suggests all three pro-Union parties now appear ready to examine a refreshed devolution settlement as the unionist alternative to independence.

But they are facing growing pressure from Salmond who, following Cameron’s visit, said that the Prime Minister had a “democratic obligation” to lay out his proposals in detail well before Scots voted.

In the interview, Darling says he expects to “play a major part” in the campaign ahead.

On the current devolved settlement, he says: “Most people think the present settlement does need to change and my view is that any parliament that can spend money but doesn’t have the pain of raising it isn’t satisfactory.”

Pressed on what extra powers the parliament could take on, he said: “The short answer is that obviously income tax is easier because it is easy to identify and the Revenue knows who Scottish taxpayers are. It would be relatively easy to implement.”

The parliament already has the power, never used, to vary income tax by 3p. Under the Scotland Bill, income tax setting will soon be shared by Westminster and Holyrood, with MSPs given the power to set a new “top-up” rate of Scottish income tax.

But Darling said that the detail of further tax concessions would have to wait until after a referendum on independence. “The first question you ask is whether you are staying or are you going. If you are staying then you look at that (more powers). If you’re going, then this is all academic anyway. If Scotland votes to leave the UK then there is no point in discussing how to improve devolution. The first question is about staying in the United Kingdom.”

In the wide-ranging interview, Darling also slammed European policy towards Greece, describing the austerity demands imposed by Germany and other Eurozone nations as “ludicrous” and “sheer lunacy”. He says Greece is “bust” and now has to be allowed to default.