HOLIDAYING Greg Hands has given in to pressure and will meet with John Swinney face-to-face tomorrow to discuss the fiscal framework.
As the world watches the negotiations between David Cameron and the EU leaders in Brussels, let us genuinely hope that Hands and Swinney can find common cause.
It may be cynical to suggest that there is an element of theatre to the European talks. Cameron’s reforms are, as most on both sides of the debate seem to agree, effectively quite weak.
They will be negotiated back to become even more weak in a bid to keep the Eastern European countries happy. There will be late-night discussions, agreements, disagreements, walk-outs, and then, as the sun rises over the commission’s headquarters in Rue de la Loi on Friday morning, there will be a deal.
It’s in the best interests of the EU and the UK and the commission and the European Parliament to accept a deal. All the players are well aware of that. But, as politicians, they must stand up for the honour of their compatriots.
There doesn’t seem to be much theatre when it comes to the fiscal framework negotiations.
The letter-writing and column-writing over the past fortnight shows that there is real frustration between the two sides. We are both so close and yet so far away from compromise. And despite Treasury insistence that there are no deadlines, it knows that the Scottish Parliament needs this agreement by February 23 if there is time for it to be scrutinised.
The principle of “no detriment” remains the stumbling block.
The powers in the Scotland Bill will see approximately £2.5 billion of spending powers devolved to Holyrood.
As the Scottish Parliament raises its own taxes, this is offset by a reduction in the block grant. And as Scotland takes on the spending powers it must also see that block grant increase.
How that is calculated, given Scotland’s decreasing tax base and slowing population growth, is where Hands and Swinney disagree.
The UK Government is still refusing to accept the Scottish Government’s proposed per capita indexation deduction (PCID) model for estimating population growth.
The problem for them is that pretty much every single expert in the country is backing this model.
Anything other than this seems likely to cost Scotland billions, which seems, well, detrimental.
That, and the offer to pay just £50m for a benefits system expected to cost several hundred million makes it almost seem like the Tories are setting these talks up to fail.
If Swinney gets the compromise of PCID and more money towards establishing the Scottish welfare state, then it will be impossible for him to walk away. It would represent a deal supported by the majority of Scots.
A refusal from the Treasury to budge would lead to a demand from most of Scotland to reject that deal. As well they know.
Perhaps, after all, there is some theatre in these negotiations.
Benefit fraud: First Minister's warning to Westminster over potential £660m cost of welfare powers transfer
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