NICOLA Sturgeon yesterday vowed to prevent the Treasury from “short-changing” Scotland by £3 billion as talks over the country’s future funding ground to a halt.
The First Minister accused officials of trying to “systematically reduce the Scottish budget” as work continues to secure the transfer of further tax-varying powers.
The comments came as Deputy First Minister John Swinney wrote to MSPs asking for more time to hammer out a deal with the UK Government on the fiscal framework.
Despite weeks of talks, Swinney indicated an agreement may not be made by the February 12 deadline set out to allow Holyrood to scrutinise any accord and set a vote before parliament dissolves for the upcoming elections in May.
Speaking in Edinburgh yesterday, Sturgeon said talks have stalled over one of the key principles behind plans to transfer further financial powers to Holyrood.
The “no detriment” clause aims to ensure Scotland’s block grant is not dented by any funding arrangement.
However, Sturgeon claims the two governments do not have a “shared understanding” of the principle and, in an official letter, urged David Cameron to spell out his position to help talks proceed.
No detail has emerged from the ongoing discussions between Swinney and UK Treasury Minister Greg Hands, with both sides agreeing to maintain confidentiality. However, yesterday Sturgeon said: “It has become increasingly clear that what the Treasury seems to want to achieve is an outcome that would systematically reduce the Scottish budget as a result of our differential growth in population – even though the Scotland Bill gives us no additional powers to grow our population.
“The current proposal on the table from the Treasury – which has been described by them as a concession – would, by our estimation, and all else being equal, reduce the Scottish budget by almost £3 billion over the next ten years.
“That is simply not acceptable. It would mean Scotland having to grow receipts from income tax much faster than the rest of the UK just to stand still.”
She went on: “I do not believe anyone who signed up to the Smith Commission did so believing that it would result in a systematic reduction of our budget – even in circumstances where our tax policy and economic performance remain 100 per cent consistent with the rest of the UK.
“It was absolutely not what was promised to the Scottish people in the pre-referendum Vow.
“We were promised additional powers – not additional powers in exchange for an automatic and systematic reduction in our budget.
“I will not allow Scotland to be short-changed.”
The Scottish Government has already warned that the Scotland Bill will fail if no deal on the fiscal framework can be reached.
The SNP administration plans to submit a fresh proposal within days and yesterday Sturgeon insisted there is “no ambiguity” in the “no detriment” principle, which states that Scotland’s budget should be no better or worse if its tax policy and economic performance matches that of the rest of the UK.
Swinney and Sturgeon want the new deal to be based on per capita indexed deduction, a scheme which factors in the slower growth of Scotland’s population.
Yesterday Sturgeon said it comes down to “taxpayer fairness”, ensuring changes imposed in the rest of the UK covering taxes devolved to Scotland do not hit the budget north of the Border.
Last night Labour MP Ian Murray urged ministers to “stay around the table for as long as it takes”.
Meanwhile, Bruce Crawford, chair of Holyrood’s Devolution Committee, said his panel will “address the reality” that more talk time is needed.
Describing this as “less than satisfactory”, he said the committee would do all it can “to provide full scrutiny” of any agreement despite time constraints.
Last night Westminster insisted its offer would have delivered more funding for the Scottish Government than the Barnett Formula since 1999.
A spokesperson said: “The UK Government is absolutely committed to implementing the Smith agreement in full and in line with the ‘no detriment’ principle. We stand ready to do a deal that is fair for Scotland and fair for the rest of the UK.”
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