Wednesday, 24 February 2016 08:33

John Swinney nails fiscal deal by seeing off £7bn Treasury grab

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SCOTLAND’S financial future was finally secured yesterday after John Swinney fought off a £7 billion “cash grab” by the Treasury, Nicola Sturgeon said.

In an emergency statement after a tense day of discussions, the First Minister told MSPs the fiscal framework had been agreed following months of protracted negotiations.

Earlier in the day it looked likely that Sturgeon would have to meet with David Cameron to hammer out agreement on adjustments to the country’s block funding after the two sides repeatedly failed to hit deadlines.

But last night Sturgeon told the Scottish Parliament the deal was done – with no detriment to Scotland’s finances.

Details are yet to emerge, but the six-year agreement comes with a review set to follow UK and Scottish Government elections in 2020 and 2021, with an independent report to follow.

Papers will be published for scrutiny by parliament by the end of the week.

Sturgeon said: “I have been clear throughout that I would not sign up to a systematic cut to Scotland’s budget – whether that cut is being applied today or by a pre-judged review in five or six years time.

“There will be not a single penny of detriment to the Scottish Government’s budget as a result of the devolution of powers during the transition period, for the next six years to March 2022.”

The deal came after the Treasury agreed to adopt the Scottish Government’s population-related model of block-grant adjustment in line with the “no detriment” principle outlined by the Smith Commission on devolution.

Any change to that adjustment after the transitional period will have to be agreed in fresh negotiations.

Praising John Swinney, Sturgeon said: “We have secured no detriment now, and for the next six years, and we have ensured that there can be no detriment imposed on Scotland at any point in the future.

“As the Deputy First Minister and I have made clear, there has been give and take in these negotiations: we did not get everything we wanted.

“But when these discussions began in June last year, the Deputy First Minister faced a proposal from the Treasury which would have delivered £7bn of detriment to the Scottish budget over the next 10 years.

“During these negotiations we have made absolutely sure there will not be £7bn or £3bn of detriment.

“This deal will not allow a single pound, or even a penny, to be taken from the Scottish Government’s budget.

“This deal will ensure that the funding for Scotland cannot be changed without the Scottish Government’s agreement.

“It protects the Barnett formula. And it will allow the powers in the Scotland Bill to be delivered.”

The announcement was met with cross-party welcome, with Tory leader Ruth Davidson hailing the uplift of Holyrood to the most powerful “substate legislature” in the world and Labour leader Kezia Dugdale heralding a “historic moment for Scotland”.

However, Green MSP Alison Johnstone criticised the secretive negotiations, calling for more transparency in the proposed review.

Sturgeon said the Scottish Government had tried to “flush much of what was being discussed into the open” and said lessons had to be learned.

Describing the talks, she said: “It has been much harder work than it should have been to avoid the Treasury trying to cash-grab to the tune of £7bn pounds from the Scottish Government.

“Perhaps it is the biggest tribute of all to the Deputy First Minister that as a result of what I’ve just announced to parliament, he probably is the person with more success now than anybody else in seeing off a cash grab from Her Majesty’s Treasury.

“Ultimately, it’s for this parliament to decide if it constitutes a good deal for Scotland.”

The Scottish Government will receive £200 million to implement the new powers in a deal Chancellor George Osborne said would protect the Union.

He said: “Today we’ve secured a stronger Scotland in a stronger UK. The arrangements we’ve reached with the Scottish Government are fair to Scotland and fair to taxpayers in the rest of the UK.

“This enables us to deliver on the vow we made to the Scottish people and delivers one of the most powerful devolved Parliaments in the world and the economic and national security that comes from being part of the UK.

“This clears the way for the debate in Scotland to move on to how these tax and spending powers should be used.”

Campaign group Business for Scotland urged caution, calling for immediate cross-party action on “unworkable” tax powers.

Chief executive Gordon MacIntyre-Kemp said: “We have sprung the fiscal trap and it can only be good news that there will be no detriment to Scotland.

Source: the National

“But it’s still not the devolution we were promised and it does not deliver the economic and social levers essential for real growth and equality for Scotland.

“You just have to look at the unworkable 1p tax rise suggested by Labour, which clearly demonstrates the limited nature of the proposed tax powers. There is no sensible way to actually use these powers.

“Businesses and people in Scotland want real devolution and the parties should consider a unified call from Holyrood for a complete re-evaluation of the powers.”

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