Britain agreed to further dismantle its highly centralized system of government on Thursday, striking a political deal to grant Scotland new tax-raising powers in a move critics fear could trigger the beginning of the end of the United Kingdom.
The deal, unveiled on Thursday after an agreement between all the Scottish chapters of Britain's main political parties, will trigger the biggest transfer of powers to Scotland from the United Kingdom since 1999 when a Scots parliament was set up and will be implemented after a U.K.-wide election next year.
It is likely to spur demands for similar powers from England, Wales and Northern Ireland, teeing up political uncertainty and heralding an eventual redistribution of power in the world's sixth largest economy to its constituent parts.
Scotland, which already enjoys a large measure of autonomy and voted to reject full-blown independence in September, will get the power to set income tax rates, some influence over welfare spending, and powers to decide how the Scottish parliament and other structures are selected and run.
Nicola Sturgeon, the leader of the pro-independence Scottish National Party (SNP), said the deal didn't go far enough.
"I welcome all new powers," she said. "But 70% of our taxes and 85% of welfare staying at Westminster is not real home rule," she said, referring to the British parliament.
Under the settlement Scotland will have control over tax revenues worth 20 billion pounds ($32 billion U.S.) a year and welfare spending worth 2.5 billion pounds a year.
Part of a power play by Britain's established parties to neutralize a threat from the SNP two months after it lost an independence referendum, the left-leaning opposition Labour party is hoping but cannot be sure it will revive its flagging fortunes in Scotland before next year's U.K.-wide vote.
Just weeks after seeing their dream of an independent Scotland wiped out in a historic referendum defeat, Scottish nationalists have turned failure into a revival which could transform British politics.
