Scotland '˜could lose billions' under new powers deal

TALKS between the governments in Westminster and Holyrood over a new funding settlement remained deadlocked with time running out to strike a deal.

Nicola Sturgeon criticised the current offer from the UK Government. Picture: Lisa Ferguson

Scottish finance secretary John Swinney said there was a “considerable distance” to go before an agreement could be reached following discussions at the Treasury last night.

First Minister Nicola Sturgeon has warned that Scotland stands to lose billions of pounds over the next few years under the Treasury’s proposals.Speaking after talks with Treasury Chief Secretary Greg Hands, Mr Swinney said Westminster had put forward new proposals but they were still a long way from a deal.

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“There is still some considerable distance to travel to resolve these issues,” he said.

There is a 12 February deadline on reaching an agreement to allow proper parliamentry scrutiny, leading to claims of brinkmanship by the Scottish Government.

But Mr Swinney said: “We can only sign up to an agreement that is right for the people of Scotland and we will not sign up to an agreement that is not right for the people of Scotland.”

The talks focused on the financial arrangements accompanying the Scotland Bill, which will give new powers to Holyrood.

The bill, which arose from the recommendations of the post-referendum Smith Commission, will bring new responsibilities over tax and welfare to Holyrood but the Scottish and UK governments have yet to agree on the fiscal framework underpinning it.

An agreement would set out how Scotland’s annual block grant from the Treasury will be adjusted to take account of the new tax powers.

Mr Swinney said: “The powers that are coming to Scotland are valuable powers, powers that we want to exercise on behalf of the people of Scotland, but we can’t exercise those powers at any price.”

Asked whether he was prepared to “crash” the process for political gain, Mr Swinney said: “I will not sign up to an agreement that is bad for Scotland and we need to get to a point where the agreement is right for Scotland.”

Further talks between the two governments will take place by telephone this week, with the possibility of further face-to-face meetings.

A Whitehall source stressed that ministers and officials in Westminster had moved “a long way” towards meeting the concerns of Scottish ministers.It was up to “both sides” to show willingness to reach a compromise, the source said.