Home rule for Scotland: New devolved powers for Holyrood unveiled

Control over benefits and income tax rates are among the new powers for Scotland Credit: PA

Control over benefits and income tax rates are among new laws giving more power to the Scottish government, helping make Holyrood one of the "most powerful devolved parliaments in the world".

A total of 44 draft clauses have been drawn up to underpin the new legislation, which Prime Minister David Cameron said would secure the UK's "united future".

The powers were promised to Scotland as a bargaining chip during the Scottish independence referendum last year - and will be implemented regardless of who wins the general election in May.

The new powers will help make Holyrood one of the "most powerful devolved parliaments in the world". Credit: PA

The legislation states for the first time that the Scottish Parliament is a permanent institution.

It transfers powers over local government elections, the ability to control and set income tax rates and bands, and means that cash raised from the levy north of the border will stay in Scotland, rather than go to the Treasury.

Other powers to be devolved include air passenger duty and a £2.5 billion welfare package, though the new Universal Credit will remain under the control of Westminster.

The powers were promised to Scotland as a bargaining chip during the Scottish independence referendum last year Credit: PA

The Scottish Parliament will also be able to vary or even remove the controversial under-occupancy reduction on council house tenants - labelled the "bedroom tax" by critics.

The grant given to Scotland by Westminster will be reduced accordingly, to allow for the reduction in income from taxes raised north of the border.

Scottish leaders have joined their Westminster counterparts in welcoming the changes, first put forward by the Smith Commission, but argued the new powers do not go far enough.

The grant given to Scotland by Westminster will be reduced accordingly Credit: PA

Chief Secretary to the Treasury, Danny Alexander, welcomed the changes as "empowering".

And former Scottish Labour leader Iain Gray - who was a member of the Smith Commission - urged the Scottish Government to transfer more powers to local communities.

Prime Minister David Cameron with Scottish First Minister Nicola Sturgeon Credit: PA

But Scottish First Minister Nicola Sturgeon claimed there had been a "significant watering down" of key Smith proposals on welfare, employment support and borrowing.

Scottish Deputy First Minister John Swinney urged caution Credit: PA

And Scottish Deputy First Minister John Swinney urged caution, saying there was still a long way to go.