Treasury Minister Greg Hands will travel to Scotland in effort to reach fiscal framework deal

UK Treasury Minister Greg Hands will travel to Edinburgh on Monday for talks aimed at reaching agreement on the fiscal framework underpinning the imminent transfer of powers to Holyrood.

The chief secretary to the Treasury told the Scottish Affairs Committee he remains “hopeful to confident that we are going to get a deal in the coming days”.

However, committee chair Pete Wishart warned the UK and Scottish governments appeared to be “miles apart” on the mechanism that will be used to adjust the block grant following powers being devolved under the Scotland Bill.

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Finance Secretary John Swinney warned earlier this week that the governments have “some distance” to travel before a deal is struck.

“I’ve cleared my diary and will be going to Edinburgh on Monday with the firm intention of continuing our negotiations and getting a deal, a deal which is good for Scotland and good for the whole of the UK,” Hands told MPs on the House of Commons committee.

The Scottish Government has said it wants an agreement in place by February 12 in order for a legislative consent motion to go before Holyrood ahead of May’s election.

Hands added: “I am not saying that I disagree with that deadline, I’m saying that I am working as hard as I can to make sure that we get this deal as soon as we possibly can and a deal that will be defensible in both parliaments and will be fair to taxpayers in Scotland and in the rest of the UK.”

The Chelsea and Fulham MP said the UK Government was “committed” to parliamentary scrutiny of the fiscal framework, though he failed to expand on what form this might take. Hands agreed to write to the committee setting out how the fiscal framework would be considered by the House of Commons and the House of Lords.

It followed a warning from Labour MP David Anderson, who represents the north-east of England constituency of Blaydon, that people “in my part of the world feel more like second-class citizens” due to a lack of consultation on further devolution elsewhere in the UK.

Hands said he remains hopeful that a fiscal framework that is “built to last” can be settled on. “We don’t want to have a fiscal framework that is continually either rewritten or subject to huge number of appeals over the years - it should operate in a mechanical, in a transparent and in a fair way,” he added.

The Treasury Minister also claimed the ‘levels deduction’ mechanism - one of three mooted to determine the reduction in Scotland’s block grant - “best answers Smith in its entirety”, denying a suggestion from SNP MP Wishart that the method – which is not favoured by the Scottish Government - was seen as a means to try and “blunt” the Barnett Formula.   

Hands said: “We are wholly committed to the continuation of the Barnett formula. If you don’t mind me saying so, I think the only people who are against Barnett are those who either favour independence or full fiscal autonomy and I can tell you I am not one of those.”

SNP MP Chris Law, who sits on the committee, said: “The chief secretary to the Treasury assured us he would be coming to Edinburgh to seek a resolution – I hope that he has looked at the evidence presented to this committee and comes prepared to fall in line with the emerging consensus and ensure the Scottish budget is not subject to unfair cuts which would run totally contrary to the letter and spirit of the Smith Commission.”