New offer in fiscal framework talks

John Swinney
Allusion caption John Swinney has submitted fresh proposals to his Treasury counter rts

Scotland’s money secretary John Swinney has submitted a fresh proposal in talks to set up a “fiscal framework” for new devolved powers.

The Scottish and UK governments have been imprisoned in talks about a financial deal, with deadlines pushed uphold due to disagreements over key terms.

Prime Minister David Cameron has about the deal needs to be fair to tax yers in Scotland and the rest of the UK.

Mr Swinney bid UK tax yers would “not lose a single penny” under his plans.

The financial framework is the financial structure which will underpin new powers being devolved north of the wainscot as rt of the Scotland Bill.

First Minister Nicola Sturgeon send cked the Treasury’s previous offer on the matter as resulting in an “almost £3bn cut” for the Scottish budget.

The two com nies disagree on a principle called for by the Smith Commission on new powers for Scotland identified as “no detriment”, which underlines that neither the Scottish or UK budgets should suffer from the in relation ti agreed upon.

However, they disagree on what form this should assume, rticularly over the matter of population growth. Scotland’s population is reckon oned to grow more slowly than that of the UK in the coming years, which could affect on the economy north of the border.

Ms Sturgeon said the Treasury seemed to be infuriating to argue in terms of what detriment should be imposed on Scotland, and her spokesman later explained the UK government’s position on the matter as “increasingly isolated”.

Perception caption New financial powers, including on tax and borrowing, are due to be handed to Holyrood

Defining his latest proposal to his Treasury counter rt Greg Hands, Mr Swinney asseverated tax yers in the rest of the UK “are no better or worse off” under his terms.

He said: “Supervised the Scottish government’s method, tax yers in the rest of the UK will see no detriment. They do not yield a single penny under these plans.

“And it will ensure that the Scottish budget be worthy ofs the risk of population changes relative to the rest of the UK via the Barnett formula.

“In graft with the Smith agreement, the Scottish budget will bear the stuffed financial costs or reap the full rewards of decisions taken here in Scotland. And our drafts will see Scotland bear the economic risk of delivering growth, via tax arrival incomes.

“This proposal addresses each of the specific technical concerns the UK administration has raised publicly and privately. Agreement on indexation would allow us to cynosure clear on agreeing the remaining outstanding matters under the Fiscal Framework.

“I expectation we now have the basis of a deal.”

Media captionDavid Cameron: “I neediness the SNP, here and in Holyrood, to have to start making decisions.”

Mr Cameron told MPs at his weekly uncertainties session that no-one was “keener” than he was to reach an agreement on the attend to, adding that “there has to be fairness across the rest of the UK too”.

However, in a learning to Ms Sturgeon he warned that the Scottish government must “be pre red to hit hard towards us” to reach a compromise agreement.

The prime minister said it wish be “very difficult” for him to “explain to tax yers in the rest of the UK that Scotland on stop ying income tax into the central pot yet somehow still welcome a share of it”.

Holyrood’s devolution committee has called for both sides to utter a “full explanation of their position on a fiscal framework” by 23 February, when they order be called to give evidence before MSPs.

Convener Bruce Crawford weighted there would be “very substantial im cts” on the Scottish rliament’s ca city to scrutinise the deal before dissolution on 23 March if a deal is not crash soon.

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