Holyrood funding talks to resume


Crunch talks over how Holyrood will be funded when MSPs are handed new powers are to resume, with the deadline for reaching a deal between the Scottish and UK governments looming.

Deputy First Minister John Swinney has travelled to London for further discussions with Chief Secretary to the Treasury Greg Hands.

The protracted negotiations are taking place in a bid to strike a deal over how the block grant Scotland receives from Westminster will be adjusted when tax raising powers are devolved.

SNP ministers had wanted an agreement in place by February 12.

Scottish First Minister Nicola Sturgeon has told the Prime Minister a deal on the "key areas of principle" needs to be in place by the end of this week.

Meanwhile, with the Scottish Parliament being dissolved next month ahead of May's elections, MSPs on the Devolution Committee have warned there would be "very substantial impacts" on their ability to scrutinise any proposals if talks go beyond Friday.

The SNP administration in Edinburgh has been in lengthy negotiations with the UK Treasury over the fiscal framework, the financial deal which will underpin the new Scotland Bill.

The two governments must agree on how Scotland's budget - the block grant - should be adjusted to take into account new tax-raising powers being transferred to Holyrood.

Any deal must meet the principles of taxpayer fairness and ''no detriment'' - the idea that neither government should gain or lose financially simply as a result of the decision to devolve.

The Scottish Government has already warned it will pull the plug on the Scotland Bill by recommending MSPs veto the legislation if an agreement over funding cannot be found.

With the deadline looming, Mr Hands took time out from his holiday for telephone talks with the Deputy First Minister earlier this week.

Mr Swinney said: "For both Parliaments to have adequate time to scrutinise an agreement it is important that we make progress. That is why I am travelling to London as part of our efforts to secure a fair deal for the people of Scotland and for the rest of the UK.

"Crucially, for there to be an agreement which the Scottish Government could consider recommending we must ensure that the Barnett Formula is retained and that Scotland and the rest of the UK are no better or worse off as a result of the devolution of further powers, that is a key test of any proposal.

"I remain committed to reaching an agreement that is in line with the principles of the Smith Commission."

Ms Sturgeon stressed on Wednesday that the Scottish Government was "committed to reaching an agreement" but added that to achieve this "we must make substantial progress - and see significant movement from the Treasury - in a short space of time"

The UK Government insists its latest offer goes ''beyond the letter of the Smith Agreement'' but says it is ''willing to compromise'' to secure a deal.

However, it said the SNP administration ''has not moved from a position that is unfair to the taxpayers of England, Wales and Northern Ireland''.