Holyrood tax powers hint 'a sign of Brown's desperation'

SCOTTISH Nationalists today welcomed Gordon Brown's hint of more tax powers for Holyrood, but said it was a sign of Labour's desperation.

The Prime Minister told a business dinner in Glasgow last night: "Devolution has worked, but I do see one problem – the Scottish Parliament is wholly accountable for the budget it spends but not for the size of its budget."

And he said looking at the "financial accountability" of the Scottish Parliament was a "critical" part of the role of the cross-party Calman commission set up to look at the future of devolution.

It was the clearest signal yet that Mr Brown is willing to see more financial powers transferred from Westminster to Holyrood.

Senior SNP backbencher Alex Neil said it was a welcome step forward, but added: "We have yet to see where the meat is."

And he claimed Labour's defeat in the Glasgow East by-election and the prospect of a repeat result in Glenrothes had pushed the Prime Minister into conceding the principle of more powers.

He said: "He is probably having to bow to the inevitable. He realises Labour is in deep electoral trouble in Scotland.

"If I was the Labour Party, I would go for full fiscal autonomy, where the Scottish Government raises all the taxes in Scotland and, as long as we are part of the UK, contributes to shared services on an agreed basis.

"That's by far the simplest and most effective way to do it.

"But if he is just talking about fiddling at the edges, that's a bit of progress, but nothing like what the Scottish Parliament, the Scottish economy and the Scottish people need."

In his address to the CBI Scotland dinner, Mr Brown also launched a fierce attack on the SNP, accusing the Nationalists of a "bleak separatist obsession".

And he made clear any move on extra powers for Holyrood was to reinforce the Union.

He said: "Be under no illusion about my purpose. Devolution is intended to preserve the unity of the United Kingdom – and developing devolution is intended to strengthen Scotland's place within it." A spokesman for First Minister Alex Salmond hailed the comments as a change of heart.

The spokesman said: "Only last year, Gordon Brown was rejecting all calls for any increase in the powers and responsibilities of the Scottish Parliament.

"Since then, we have had SNP success in the Scottish Parliament election and in Glasgow East, and now Gordon Brown is singing a very different tune."

Scottish Liberal Democrat leader Tavish Scott said he wanted the Prime Minister to talk "the language of home rule". He said: "If he has woken up to the demands for greater tax powers, then that is progress. I want the Calman Commission to be radical, and the test of Brown will be whether he tries to water it down or whether he is prepared to implement real and lasting changes."