LEADING economists have called on Westminster to give the Scottish parliament greater financial powers to boost business north of the border.

In a letter published today in The Sunday Times, 13 of Scotland’s most influential academics argue that Holyrood should be given control over taxation.

Led by Ronnie MacDonald, a professor of economics at Glasgow University, they state that a lack of financial levers is “damaging to Scotland’s economic prospects”.

Jack McConnell, the first minister, has ordered his policy advisers to devise ways to expand the powers of the Scottish parliament after a series of disputes with Whitehall.

Calling for greater financial powers, “especially over taxation”, the letter says greater fiscal responsibility is “essential for the prudent management of Scottish government spending and of the Scottish economy”.

The economists argue that the existing arrangements mean that there is little incentive for politicians to spend the money prudently or take account of the electorate’s wishes.

Fiscal devolution, they claim, would give MSPs the chance to alter financial incentives for companies and individuals.

One of the signatories, Professor Wright, told The Sunday Times: “There is a growing consensus among economists that further financial responsibilities for the Scottish executive are required if the parliament is going to be more successful.”

Further pressure for Holyrood to be given greater powers is coming from Unison, Scotland’s biggest trade union, which is calling for MSPs to be given control over a range of new areas, including firearms, energy and broadcasting. In a policy paper to be published early next year, the union also argues for separate Scottish immigration controls, which could make it easier for skilled foreigners to live and work in Scotland.

The economists named in the letter include Neil Kay and Robert Wright, of Strathclyde University; Angela Black, of the University of Aberdeen; Sheila Dow, of Stirling University and Anton Muscatelli, vice principal of strategy and budgeting at Glasgow University. The letter is also signed by Farhad Noorbakhsh, head of the department of economics at Glasgow University; Alex Kemp, Schlumberger professor of petroleum economics at the University of Aberdeen, Paul Hallwood, of the University of Connecticut, and Alistair Dow, professor of Scottish economy at Glasgow Caledonian University.

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