The UK Government has submitted its response to the Calman Commission, calling for improvements in the Scottish Parliament's "financial accountability".

The Scottish Government wants tax-raising powers which go further than the current "tax varying" power – allowing an increase or decrease of three per cent in the basic rate of income tax – which the UK Government notes in its submission has not been used to date.

However, today's document fails short of recommending specific measures to make the Scottish Government more accountable for its spending, while stressing that the Government "stands ready" to discuss with the Commission how this could be achieved.

The Government argues that ministers in Scotland have "wide freedom" to allocate spending, which "matches the wide legislative and executive discretion on policy matters devolved to Scotland".

"The devolved funding arrangements provide the Scottish Parliament with not only a rising budget but also continuity and a stable, transparent and predictable way of funding public services in Scotland."

The document later adds: "The wide range of competence already enjoyed by the Scottish Parliament forms a sound basis for continuing success, and clearly remains in line with the wishes of the Scottish people.

"Nevertheless the Government remains open to proposals, in accordance with these principles, to adjust the settlement further to strengthen devolution."

Speaking yesterday before the submission's publication, Labour's leader in Scotland, Iain Gray, backed increased accountability "to ensure that devolution functions as effectively as possible", while stressing that devolution must ensure "harmony" in the "sharing" of powers.

However, Nationalist MSP Alistair Allan yesterday criticised the Calman Commission as "a toothless exercise", preferring instead to back the Scottish Government-commissioned National Conversation "which is inclusive and offers everyone a chance to contribute by engaging fully with the people of Scotland".

The Calman Commission was set up as an independent review of devolution backed by the Scottish Parliament. The UK Government gave its backing shortly after.