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UK's Osborne In Last-Minute Scottish Tax Powers Promise

by Robert Lee,, London

09 September 2014

UK Chancellor George Osborne will this week unveil plans to give Scotland greater power to control taxes in the event of a 'no' vote in the upcoming independence referendum.

On September 18, Scottish voters will be asked to vote 'yes' or 'no' to the question of whether Scotland should become independent from the United Kingdom.

Speaking on the BBC's Andrew Marr Show, Osborne said that if Scotland stays in the UK, it will be granted more tax and spending powers and have a greater say on the welfare state. A timetable for delivering these reforms will also be set out.

"The moment there is a No vote in the referendum, the clock will be ticking for delivering those powers. And then Scotland will have the best of both worlds. They will avoid the risks of separation but have more control over their destiny, which is where I think many Scots want to be," Osborne said.

The Chancellor's comments came as the 'Yes' campaign moved ahead in the polls for the first time. A YouGov/Sunday Times poll showed that 51 percent of those who intend to vote now would back independence for Scotland.

The 'Yes' campaign dismissed Osborne's announcement as a gimmick and "empty talk." Blair Jenkins, the chief executive of Yes Scotland, claimed: "This is nothing more than a panic reaction by George Osborne to the success of the Yes campaign on the ground and in the polls."

The move could spark a wider debate about fiscal devolution within the UK. Reacting to Osborne's pledge, the Welsh First Minister, Carwyn Jones, wrote on Twitter: "Whatever further devolution is offered to Scotland must also be on offer to Wales and Northern Ireland. But we must be wary of taking new powers that carry a significant cost without a transfer of resources."

"The method and structure of devolution should be the same across the UK, even if the devolved powers may be different. We need to assess carefully what is in Wales's best interest. Devolution of welfare and full income tax devolution would not be." He said a constitutional convention should be drawn up to deal with the issue of tax devolution.

Arrangements have already been made for the devolution of two new taxes to Scotland. Under the Revenue Scotland and Tax Powers Act, Revenue Scotland will be established as the tax authority. The Scotland Act 2012 will devolve responsibility for taxes on land and transactions and disposals to landfill from April 2015, when the current UK Stamp Duty Land Tax (SDLT) and Landfill Tax will be replaced with these Scottish levies.

TAGS: tax | tax incentives | revenue guidance | corporation tax | United Kingdom | tax authority | tax planning | tax rates | tax reform | individual income tax | Scotland

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