Granting full devolution of income-tax raising powers to Scotland could undermine the right of Scottish MPs to vote on English matters, an economics think-tank has argued in a study issued today.

In its submission to the Smith Commission, set up after the independence referendum to secure agreement among the main political parties on Scottish financial devolution, the National Institute for Economic and Social Research (NIESR) position has given backing for the Labour party position, which alone has not called for full income-tax devolution, but a maximum three quarters limit.

NIESR's paper claims full devolution of income tax would break three key economic rules and undermine the political union with England, Wales and Northern Ireland.