The Smith Commission proposes further powers for Scotland
Scotland should have the power to set its own income tax rates, the Smith Commission said on Thursday.
The commission was set up by David Cameron to make devolution commitments on further powers for the Scottish Parliament in the wake of the independence referendum in September this year.
The proposals, such as the power to control air passenger duty from its airports and to allow 16 and 17-year-olds to vote in the country's elections, are expected to be in place only after next year's parliamentary elections regardless of which party wins.
David Cameron said: "I'm delighted with what's been announced. We are keeping our promises and we're keeping our United Kingdom together.
"I always said that a 'no' vote didn't mean no change. Indeed, we made a vow of further devolution to Scotland. And today we show how we're keeping that vow and we'll continue to keep that promise."
The Confederation of British Industry director-general John Cridland said the proposals were "clear and ambitious".
“Following many months of political uncertainty, the focus for all parties must now be on building a stronger and more prosperous Scottish economy," he continued.
David Lonsdale, director of the Scottish Retail Consortium, said the news "heralds a fresh chapter of devolution".
"For us the priority is simple, make it easier and less costly for retailers and other firms to invest, grow and hire," he argued.