Scotland to be given new tax powers

By Avril Ormsby

LONDON (Reuters) - Scotland will be given greater tax-raising powers under the biggest shake-up in the nation's finances for 30 years, the government said on Wednesday.

But some critics have accused Labour of adopting spoiler tactics ahead of the pro-independence Scottish National Party's (SNP) publication of its White Paper on its Referendum Bill on independence next week.

The proposals, contained in the government's White Paper "Scotland's Future in the United Kingdom," would also not be introduced until early in the next parliament, after an election Labour is tipped to lose.

Under the proposals, Westminster would cut basic and higher rates of income tax by 10 pence in Scotland, leaving the devolved parliament to decide on the overall tax level.

As a result, 4.5 billion pounds would be cut from the annual block grant from London, which finances Holyrood's yearly budget of 30 billion pounds.

"Since the first day of devolution, the Scottish government has been accountable for how it spends taxpayers' money," Secretary of State for Scotland, Jim Murphy, told the House of Commons.

"Under today's proposals, they will also be held to account for how they raise it. We will give the Scottish Parliament greater freedom -- but also the responsibility -- to set the level of income tax in Scotland."

The transfer in tax powers would also cover stamp duty, landfill tax and aggregates levy. The Scottish Parliament would also be given new borrowing powers.