UK prepares for constitutional upheaval as Scots get new powers

Some are predicting that Britain is being put on the path to a federal system. Credit: Reuters

If you thought a No vote in September's referendum would prevent the constitutional upheaval predicted in the event of a Yes vote, you were wrong.

This morning an agreement will be set up which could put the UK on the path to further devolution not just for the Scotland but for Wales, Northern Ireland and England. Some are predicting that Britain is being put on the path to a federal system.

The Smith Commission which was set up following the referendum to look into more powers for the Scottish Parliament will report the agreement which has been reached by its cross party members - Labour, the Liberal Democrats, the Conservative, the Green Party and the SNP.

It will announce plans to give Holyrood the power to set its own income tax rates and band but stop short of giving Scotland full control by leaving Personal Allowance under UK control - it’s the threshold above which you start paying tax on your earnings.

Agreement to grant such powers signals a major shift in Labour thinking - it had been the only party opposed to such a step. The former Chancellor Alistair Darling who led the Better Together campaign only this week said such a move would end in a ‘’flood of tears.’’

In a move which could anger some regional airports in England, the Scottish Parliament is also set to gain the ability to set, or likely scrap, Air Passenger Duty. It was a move tabled in the SNP’s White Paper and is an excise duty viewed by some of Scotland’s airport operators as an inhibitor to business.

The Commission is also believed to have gone further than expected on Welfare with plans to devolve £3 billion worth of benefits including the disability living allowance, the carers allowance and the winter fuel payments. This will give the Scottish Government the ability to scrap the bedroom tax, create new benefits and top up existing benefits.

Scotland could get more power over welfare spending under the plans. Credit: PA Wire

ITV News understands an agreement has also been reached to allow the Scottish Government to keep a slice of VAT receipts.

Under EU law VAT cannot be fully devolved but this step will give Holyrood an additional revenue stream.

However the plans outlined above have led to calls for England to gain similar powers.

A group of leading figures from English Local Government have written the following letter to The Times newspaper.

The Scottish people may not have voted for independence but it seems that Scotland, and its UK counterparts, are about to become more independent from one another.