Ian Murray urges action to end funding deal uncertainty

Talks have so far failed to produce an agreement on how the cash paid by Westminster to Holyrood should be calculated in future once the planned transfer of more tax powers to the Scottish Parliament takes effect.

The SNP has set mid-February as a deadline for a deal, but after a meeting with the Treasury this week, Finance Secretary John Swinney said there was “still a significant distance to be travelled”.

The so-called new “fiscal framework” is needed because control over most aspects of income tax is due to be handed to Holyrood from next year in line with the recommendations of the cross-party Smith Commission.

But failure to secure what has been dubbed a “Valentine’s Day deal” would mean postponing implementation of the new tax and welfare powers until April 2018.

Mr Murray, who is MP for Edinburgh South, said: “Last December, following her meeting with David Cameron, Nicola Sturgeon claimed a deal on the revised fiscal framework was likely by mid-February. Now her deputy, John Swinney, is going out of his way to dampen expectations.

“The people of Scotland – taxpayers, businesses and public services – need to know when the substantial new powers in the Scotland Bill will be delivered and these mixed messages from the SNP are not helpful.”

He claimed greater transparency in the discussions between the two governments would have helped. “If the UK and Scottish governments had agreed to publish papers and minutes from their negotiations, as I requested, then this unwelcome uncertainty and confusion would have been avoided.”

He said Mr Swinney had warned that if agreement could not be reached on the fiscal framework by February 12 he would not ask MSPs to approve the new powers before the Scottish Parliament is dissolved for the May elections.

“If that is the case then both governments must redouble their efforts to ensure a deal is reached by that date.

“If they fail to do so and the new powers are not ratified before the Holyrood elections, then both the UK and Scottish governments will have a duty to explain to the people of Scotland exactly why the new powers are being delayed.”

Following talks in London on Thursday, Mr Swinney claimed a Valentine’s Day deal was still possible. He said: “A lot of ground has been covered, but there are still a lot of remaining significant issues to be resolved.”

He acknowledged the timetable for achieving an agreement was “tight”.

Academics have warned that if the right mechanism is not arrived at for calculating the appropriate reduction in the current £30 billion block grant from Westminster – to take account of the increased tax powers – then Scotland could lose hundreds of millions of pounds in the coming years.