The Scottish Government could block plans to hand more powers to Holyrood if a “fair deal” over funding cannot be agreed with Westminster, Nicola Sturgeon has warned.
The Scottish First Minister said it was “a statement of the obvious” that she would “not be prepared to agree to something that is unfair to Scotland”.
New powers over tax and welfare are set to be devolved to MSPs as a result of the Scotland Bill going through Westminster, with the legislation based on a package of proposals drawn up in the wake of last year’s independence referendum.
As she outlined her plans for the coming year, Ms Sturgeon signalled her intent to UK ministers, saying MSPs would only back the Bill if the accompanying deal on Scotland’s funding is “fair”.
While she said she hoped the Scottish Parliament would be able to give its consent to the legislation by March next year, she stated: “Let me make clear that we will only recommend consent if the accompanying fiscal framework is also fair to Scotland.”
The Scotland Bill proposes giving Holyrood the power to set thresholds and rates of income tax as well as to retain the cash raised in Scotland.
But, as a result of this, the block grant the Scottish Government receives from Westminster each year is to be reduced.
Ms Sturgeon claimed the UK Treasury could attempt to “penalise” Scotland by cutting the grant by a greater amount than Scottish ministers could hope to raise, effectively cutting the country’s budget.
Talks between the two governments over the funding arrangements are taking place at the moment, the SNP leader said.
She told BBC Radio Scotland’s Good Morning Scotland programme: “I want to see many more powers than are proposed right now come to the Scottish Parliament, but it would not be in the interests of the Scottish Parliament for more powers to come and at the same time have a fiscal framework that effectively cuts our budget.
“We’re in a discussion, a negotiation just now. I’m simply making the point – and I can’t believe anybody in Scotland would have expected me to say anything different – that I would not sign up to or support something that was an inherently unfair deal for Scotland.
“As we get responsibility over tax, then our block grant is reduced by a commensurate amount. But the devil is in the detail of that discussion.
“What I’m saying is if the Treasury – and the Treasury is wont to try to do this sometimes – tries to penalise us by taking away more in our block grant than is reasonable to expect us to raise through the taxes we’re getting, then that would be unfair.”
She added: “I hope these discussions conclude in a fair and satisfactory way, that’s what the Scottish Government is seeking to achieve, but I was simply signalling what most people would take as a statement of the obvious – I will not be prepared to agree to something that is unfair to Scotland.
“We’re working hard to get a fair deal so before the election next year we can have a legislative consent motion in the Scottish Parliament that the Scottish Parliament agrees to and signs up to.
“But it would be completely wrong of me as First Minister to say that regardless of what the UK Government seeks to do in terms of a fiscal framework, that we would accept that.”