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Last Updated: Friday, 30 November 2007, 17:01 GMT
Call for devolution review body
Wendy Alexander
Ms Alexander called for a more "balanced" home-rule settlement
The leader of the Scottish Labour Party has called for the creation of a Scottish constitutional commission to examine the devolution settlement.

Wendy Alexander said the body should consider introducing more tax raising powers for Holyrood - rather than the one-off block grant from Westminster.

She made the call as she tried to draw a line under the party's funding row.

The SNP said her speech made a referendum on Scotland's future more likely in this parliamentary term.

Ms Alexander said the SNP's victory at the recent Scottish elections was down to many voters believing the Nationalists could "stand up for Scotland" against Westminster.

Miss Alexander said there remained "unfinished business" from the 1999 Scotland Act, which was the cornerstone of the devolution settlement, and that it was up to pro-unionist parties at Holyrood to "fix it".

Financing the parliament almost wholly through grant funding does not provide the proper incentives to make the right decisions
Wendy Alexander

"My objective is for Labour, in partnership with other major pro-union party leaders at Westminster and Holyrood, to establish an expert-led independent Scottish constitutional commission to review devolution in Scotland in 10 years and develop a more balanced home-rule package," she said.

She said it should have a mandate from Holyrood, unlike the SNP's current "national conversation" consultation on the constitution.

A motion will be brought forward in the Scottish Parliament next week to secure support for the commission.

Ms Alexander said the body should comprise a main group along with contributory panels in areas such as finance, but she added that a key issue must be to strengthen "the financial accountability" of Holyrood.

"In short the financing of the parliament almost wholly through grant funding does not provide the proper incentives to make the right decisions," she said.

Spending levels

"Hence strengthening the financial accountability of the Scottish Parliament by moving to a mixture of assigned and devolved taxes and grant is something the commission should consider."

She claimed this would address concerns in the rest of the UK about relative spending levels in Scotland compared with England.

"As one commentator has put it, there is not much point in getting a divorce over the housekeeping bills," she said.

An SNP spokesperson said: "The task for the main opposition parties - who all now advocate more powers for the parliament - is to define exactly which powers they mean, so that the option can then be included on a referendum ballot paper.

"It would make no sense to define the 'more powers' option, and then not support a referendum so that the people can choose."

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