Calls for wider Scottish tax powers

The Scottish Parliament would get more control over income tax, along with responsibility for some other taxes, including stamp duty and would also be given the ability to lower the drink-drive limit in Scotland, set different speed limits, and legislate on air weapons.

The proposals are all expected in the final report of the Calman Commission, set up in 2008 to study how devolution could be improved 10 years after the creation of the Scottish Parliament.

Holyrood at present has the power to alter the basic rate of income tax by up to 3p upwards or downwards, but this power has never been used.

Under the proposals in the report, UK income tax rates in Scotland would be set 10p lower at present, making them 10p for the standard rate and 30p for the higher rate, and the money raised would go to Westminster, sources said.

A Scottish government would then levy a "Scottish variable rate", the proceeds of which would go to Scotland.

This would be an additional 10p if present overall rates were to remain unchanged, but there would be no upper limit beyond what was politically possible. The catch is that the same variable rate would apply across all tax bands - so 11p on the basic rate, taking the present total to 21p, would mean 11p on the higher rate, taking it to 41p.

The effect is intended to make it difficult for Holyrood to impose a disproportionate burden by hitting higher-rate taxpayers alone.

This measure, combined with other tax measures proposed by the commission, would mean Scotland being responsible for raising about a third of its £32 billion annual spending. It would also lead to a corresponding reduction in the size of Scotland's block grant from Westminster.

Other tax measures proposed by Calman include devolving stamp duty, air passenger duty, the landfill tax and a mineral tax which together raise about £900 million.