Scotland Devolution of Powers Deal:: Smith Panel Recommends Direct Control Of Income Tax And Welfare Policy

The Scotland devolution of powers is becoming a reality after it went to the brink of a vote for independence. It is all set to get sweeping new powers, including the right to set their own income tax rates and control over welfare payments. This comes after a new plan unveiled by a government-appointed commission.

Headed by Lord Robert Smith, the panel's recommendations will see the biggest transfer of powers to the Scottish parliament since it came into being, the AFP reported. The Smith report was a follow up on a promise made by Britain's three main political parties to grant greater autonomy ahead of the independence referendum held in September. Other proposals include control over air passenger duty, share in national sales tax, right to vote for 16- and 17-year-olds in Scottish elections. But corporate tax will continue to reign at a national level.

Cameron Delighted

Prime Minister David Cameron expressed delight at the plan. He said, "it is a good day for the UK ... We are keeping our promise to the Scottish people. He also promised to put forward a plan before Christmas to grant greater devolution to England -- a key demand from supporters in England who resent the powers being given to Scotland." The Cameron government was under pressure to deliver on its promise to retain Scotland within United Kingdom. The Scotland's regional government is controlled by the pro-independence Scottish National Party which has been expanding its support base since the referendum.

Party Support

The proposals had the backing of all parties. The full control of income tax rates was backed by the Cameron's Conservatives and the SNP with opposition Labour Party resisting it. The Guardian reported about the implications of an English backlash at Westminster. The historic deal for direct control over £14bn worth of tax and welfare policy to Scotland has paved the way for Cameron to apply the alternate principle of "English votes for English laws" on some tax matters, excluding Scottish MPs votes.

Mr. Cameron said he would implement the proposals of the cross-party Smith commission by introducing radical changes to Britain's tax and welfare system. With the commission giving the Scottish parliament the right to set income tax bands and rates, with the U.K. government only left to legislate on personal tax allowances, Mr.Cameron wanted to limit voting rights of Scottish MPs on some tax matters. The British PM said, "Taken together, this extra devolution for Scotland will make our United Kingdom stronger."