Leader Johann Lamont says Holyrood would get more powers to set Scottish income tax and to reform housing benefit

The Scottish Labour party has promised to raise taxes for the wealthy, block cuts in business taxes and increase spending on housing in a bid to secure a no vote in September's independence referendum.

The party's Scottish leader, Johann Lamont, said the Holyrood parliament would get wider powers to set Scottish rates of income tax, including higher rates for high-earners of at least 50p in the pound, which would raise around £100m to invest in NHS services.

A new lock would be introduced to prevent a future Tory government in Edinburgh from cutting only the highest rates of tax to attract millionaire residents, while Holyrood would also be allowed to run Scotland's single rail franchise as a mutualised "not for profit" company.

Claiming the new powers would allow MSPs to raise 40% of Scotland's £30bn a year budget, Lamont said Holyrood would also be handed control over the housing benefit system, worth about £1.7bn in Scotland.

Reforms to housing benefit payments would allow councils and social landlords to build more affordable housing, and Scotland's council tax system would eventually be overhauled to introduce higher property taxes for more valuable homes.

Expected to form the centrepiece of the party's 2015 general election manifesto in Scotland if independence is defeated at the referendum in six months' time, her plans were immediately endorsed by Ed Miliband, the UK Labour leader.

As the Scottish National party and devolution campaigners derided the proposals as "lacklustre" and half-hearted, Miliband insisted they would bring "people and power closer", signalling to hostile Labour backbenchers that the plans would be supported at Westminster.

Lamont said the proposals from her party's devolution commission were not an "exercise in political vanity" or designed to appease nationalists. They were designed to "bolster, defend and energise" devolution, she said. Labour's devolution commission had originally said there was a "strong case" for devolving complete control over income tax but that proposal was dropped after tax experts and business leaders said it could undermine the UK's complex pensions and tax credits system.

Lamont said entirely devolving income tax could leave Scotland more vulnerable to economic shocks, with Holyrood's spending currently protected by the UK Treasury. Labour wanted to protect the sharing of risks within the UK's larger economy. "This is the right balance between fiscal accountability and ensuring us against risk," she said.

Holyrood is already getting powers to set income tax rates from 2016 under legislation agreed by the UK parties, but only to change each tax rate by exactly the same amount to at most 10p in the pound. Labour strategists believe the new tax proposals will resonate with poorer, urban centre-left voters who are being wooed by the Scottish government and independence movement, and are the most likely to vote yes in September. Labour also believes it will highlight the absence of clear tax plans in Alex Salmond's blueprint for independence.

The income tax proposals also set up a confrontation with the Tories; one senior Scottish Tory said the block on cutting just the highest rates of tax were "pathetic" since it undermined the central principle of devolution. Labour has also rejected proposals to devolve air passenger duty (APD), alcohol, fuel and tobacco duties, corporation tax and capital gains tax, to avoid tax competition with the rest of the UK and to avoid appealing to business interests.

Senior sources said the decision to reject devolving APD was also influenced by the loud applause from BA boss Willie Walsh and Ryanair boss Michael O'Leary for Salmond's policy of phasing out APD after independence.

Nicola Sturgeon, the Scottish deputy first minister, said Labour's proposals were "a huge watering down" of its original plans, to placate hardline anti-devolutionists on Labour's backbenches. It also left Westminster still controlling 85% of Scotland's welfare system, falling far short of proposals from pro-devolution groups.

"There are no proposals to create jobs, no proposals to tackle child poverty, and no proposals to grow the economy – if this report marks the limit of their ambitions for the Scottish parliament, it says it all about the ambitions of Scottish Labour for the people of Scotland," Sturgeon said.

Ben Thomson, chairman of the Devo Plus thinktank, which has Labour, Lib Dem and Tory membership, said he was deeply disappointed by the new proposals and said it remained unclear how Labour believed the limited tax devolution was equal to 40% of Holyrood's spending.

It would not make Scottish politicians accountable enough for the money they spend, he said. "It's just tinkering with the current system," Thomson said. "It's just lip service towards real devolved powers. The SNP will benefit from this; they will just say that the unionist parties aren't interested in real devolution."