The Scottish parliament is to be handed direct control over an estimated £14bn of income tax and welfare benefits in a cross-party deal that will bring about the biggest upheaval of Britain’s taxation system in the modern era. Unveiling recommendations that powers to set income tax rates and bands be wholly devolved, Lord Smith of Kelvin, head of the commission set up to fast-track further powers to Scotland after the country rejected independence in September’s referendum, described the agreement as an unprecedented achievement. The far-reaching reforms include the power to create new benefits in devolved areas and to top up UK payments where affordable. About £3bn of welfare powers include the housing elements of universal credit, while attendance allowance, carers allowance, the disability living allowance and personal independence payment will also be devolved, along with the work programme and winter fuel payments. The national minimum wage will remain under Westminster’s control, as will equalities legislation. The report also recommends that the first 10% of VAT raised in Scotland will be assigned to the parliament and air passenger duty will be fully devolved. The UK government will retain powers over personal allowances. ..
Posted on: Fri, 28 Nov 2014 05:29:48 +0000