'Final hurdle' in Scots fiscal talks

Swinney and HandsReification copyright Getty Images
Image caption Finance Secretary John Swinney and Chief Secretary to the Moneys Greg Hands are to meet for further talks

Representatives of the Scottish and UK dominations are to meet for last-ditch talks to establish a fiscal framework for new devolved powers.

Accounting Secretary John Swinney said he hoped a deal could be done this week.

Holyrood’s devolution cabinet has set a deadline of 23 February if there is to be time to scrutinise the agreement.

Mr Swinney’s Exchequer counter rt Greg Hands warned that walking away from a mete out would be “letting down the people of Scotland”.

The two sides both tabled renewed proposals in the deadlocked talks last week, with Mr Swinney lesson that “very significant issues” remain.

The rties disagree on their working-out of the “no detriment” principle laid out by the Smith Commission on new powers for Scotland, which promises that neither the UK or the Scottish budgets should be left worse off by a distribute.

Writing in the Scotland on Sunday news per, Mr Hands said both authorities had “shared an objective to make the Scottish rliament one of the most powerful devolved furnishings in the world”.

He said there remained an obstacle at the “final hurdle”, affirming the deal the Scottish government was proposing is “not fair”.

Population growth

The key strife concerns population, with that of Scotland set to grow more slowly than that of the UK in fall years.

The Scottish government backs a model known as “per capita needled deduction”, which would compensate financially for the slower citizenry growth.

Mr Swinney said this was the best way of satisfying the “no detriment” probity, but Mr Hands said it was “not logical” and instead proposes a model which intention update Scotland’s population share of tax revenue over time.

Median captionDavid Cameron: “I want the SNP, here and in Holyrood, to deliver to start making decisions.”

First Minister Nicola Sturgeon, who has exchanged cultures with Prime Minister David Cameron on the matter, claimed the Funds’s position amounted to an “almost £3bn cut” for Scottish budgets over 10 years.

Mr Cameron responded that it intention be “very difficult” for him to to explain to tax yers in the rest of the UK that “Scotland last wishes a stop ying income tax into the central pot yet somehow still learn a share of it”.

David Phillips, of the Institute of Fiscal Studies, told the BBC’s Sunday Public affairs Scotland programme that there would need to be “goodwill” on both sides virtuous to reach a “fudge”.

He said: “It’s a very complicated picture, because of the ‘no harm’ principles and tax yer principles in the Smith Commission report.

“You might imagine they are both very sensible principles, but it turns out with the Barnett Directions in place you can’t have a system that satisfies both principles while being S rtan and trans rent.”

Fiscal forecasts

Mr Hands also said the UK government was down about the Scottish government’s proposal that it would set its own fiscal and cost-effective forecasts.

MSPs had called for the Scottish Fiscal Commission to be given the power to set prognoses instead, but SNP members on the finance committee backed down after understanding evidence from Mr Swinney.

Holyrood’s devolution committee wants both sides to nearby a “full explanation of their position” by its next meeting on 23 February, when they command be called to give evidence to MSPs.

Convener Bruce Crawford has notified there would be “very substantial im cts” on the Scottish rliament’s cleverness to scrutinise the deal before dissolution on 23 March if a deal is not scratch soon.

Mr Swinney said: “Our proposal is with the Treasury and I daydream, and believe, we can now agree the remaining outstanding issues this week.”

Putting, Mr Hands said “the ball is fully in the court of the Scottish government”, amplifying: “We must all hope they do not miss this opportunity”.

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