JOHN Swinney last night warned there was one last chance to strike a deal on securing new tax and welfare powers for Holyrood before the election.
The Finance Secretary said he would meet Chief Secretary to the Treasury Greg Hands this week for a tenth and “final attempt” to agree the fiscal framework needed to make the new Scotland Bill work in practice.
It follows weeks of stalled talks on how to adjust the annual £30bn block grant to Scotland to account for the new tax powers and VAT receipts devolved by the Bill.
This weekend was to have been the deadline for a deal, but that was extended a week.
Any later, and MSPs will not have enough time to study the framework and vote the Scotland Bill into law before Holyrood is dissolved on March 23 for the election campaign.
Swinney said: “Following eight months of negotiations, we now have one week to agree a deal if the Scottish Parliament is to be able to effectively scrutinise, take evidence on and debate the fiscal framework.
“The fiscal framework must remain true to Smith Agreement [on greater devolution] which said the Barnett Formula will remain and that Scotland and the rest of the UK should be no better or worse off as a result of having new powers.”
Swinney said his revised offer to the Treasury on Friday would ensure the Scottish budget bore responsibility for using the proposed powers “and that taxpayers in the rest of the UK are no better or worse off as a result of the new powers being devolved”.
"No-one should be in any doubt that there remain very significant issues that are yet to be resolved. Our proposal is with the Treasury and I hope and believe we can now agree this issue, and the remaining outstanding issues, this week.”
The key issue is to how to adjust the block grant in line with the Smith Commission's “no detriment” principle, which says neither Scotland or the rest of the UK (rUK) should lose out simply because of the other’s policies.
The SNP government has pushed for a formula known as “per capita indexed deduction” to protect Scotland’s budget if the country’s population grew more slowly than rUK’s.
The SNP said yesterday that Scotland would lose £3bn over 10 years under the Treasury's rival plan, enough for 8,000 nurses or 6,000 police officers a year.
The Treasury says its scheme would let Scotland let it keep all its tax growth plus an extra £4.5bn to account for the differing rates of population growth.
First Minister Nicola Sturgeon last week dismissed it as "not new or serious".
A UK government source said: “If the SNP had got their way in the referendum Scotland would be getting nearly £10bn less funding per year by the end of the Parliament.
“The offer we have placed on the negotiating table is not only in line with the no detriment principle…. but would have delivered £6.5bn more funding for the Scottish Government than the existing Barnett formula since devolution in 1999.
“From the outset our position on the fiscal framework has been clear – we stand ready to do a deal that is fair for Scotland and fair for the rest of the UK.”
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