More powers and a fair deal for Scotland

This SNP Government will always do what we believe is in Scotland’s best interests.

We believe in independence – but short of that, we are focussed on using all of the powers we currently have to make this country a better place for everyone who lives here.

And we want to see the additional powers promised by the UK Government in the wake of the independence referendum transferred to the Scottish Parliament, so that we can use them in Scotland’s best interests.

In fact, we do not simply want them – we insist upon them. These powers formed a key part of the UK Government’s prospectus at the referendum, and now that promise must be honoured.

That is why we are giving such commitment to talks with the UK Government about the so-called fiscal framework which accompanies the new tax and welfare powers contained in the Scotland Bill.

Make no mistake, the fiscal framework is just as important, arguably more so, than the legislation on new powers – because it will influence how much money this and future Scottish Governments have to invest in our vital public services. That’s why we must get it right. The Scottish Government is not asking for any special favours. But we do demand a fair deal – one that lives up to the key principles at the heart of the Smith Commission report – and we will not sign up to a deal which will leave Scotland worse off. The UK’s pledge at the referendum was new powers – not new powers at a cost.

A deadline has been set for February 12th for our talks with the Treasury to be concluded and a deal to be done. The Scottish Parliament committee leading scrutiny of the proposals is clear that the talks cannot be allowed to drag on beyond then if the parliament is to have time to fully consider and approve any deal before the Holyrood election.

But there is a long way to go to get a deal and major issues need to be resolved before we can get a satisfactory outcome.

Unless we can get a deal that adheres to the principles of the Smith Commission, there will be no agreement and the deadline will be missed.

That would leave the Scotland Bill and the new powers that are supposed to be being delivered in a constitutional limbo.

We would be into uncharted territory – and the UK Government would be breaking its promise of more powers.

That is because for the Scotland Bill and all its tax and welfare provisions to come into effect it requires Holyrood to pass a so-called legislation consent motion (LCM) – but if there is no deal on the fiscal framework, we will not be able to vote for that motion.

Recent days have seen some ill-informed suggestions from Labour sources that the Scottish Government is deliberately trying to scupper a deal.

Nothing could be further from the truth. But it speaks volumes about Scottish Labour that their instinct is to attack a Scottish Government which is in negotiations with a Tory Treasury, rather than joining us in defending Scotland’s national interest.

The reality is the Scottish Government is doing all that we can to get an agreement, and we are ready to go the extra mile over the next few weeks to try and get a deal.

That will start tomorrow (Monday) when I will be in London for more talks with Treasury counterparts.

A number of big issues must be agreed to fulfil the Smith Commission agreement; more capital borrowing powers to boost the economy, greater revenue borrowing powers to smooth fluctuations in the public finances, sufficient resources to set up and administer Scotland’s new welfare powers.

All of these issues have big implications for Scotland, for any Scottish Government’s practical ability to actually use the new powers, and for the public finances of our country.

But at the heart of the negotiations over the fiscal framework is the discussion on the so-called block grant adjustment – in other words the amount by which Scotland’s grant from Westminster should be cut going forward to take account of the fact Holyrood would be raising a share of its own revenues under the Scotland Bill powers.

Some suggested mechanisms would lock in a financial disadvantage for Scotland’s public finances,costing us potentially many billions of pounds in the years ahead, meaning that even if Scotland grows our economy faster than the rest of the UK, we could still see our budget slashed.

I was part of the Smith Commission and cannot find that anywhere in the agreement.

I have read and re-read the famous ‘Vow’ and cannot find the clause that reads: ‘Heads the UK wins; tails Scotland loses’.

This wasn’t the Vow; it’s not Smith and we will not sign any deal which does that.

Any deal that systematically cuts Scotland’s budget would have a potentially catastrophic effect on public services, and no Scottish Government worthy of the name should be prepared to sign up to such a deal.

We have already enthusiastically embraced the new powers that have already come our way – such as Land and Buildings Transaction Tax (LBTT) – and we look forward to more financial powers coming to Scotland.

But we need to agree a deal that is fair to all, in line with the Smith Commission principle of “no detriment”. That, bluntly, is what needs to be done.