The next stage of Scottish devolution can deliver the best deal for taxpayers across the UK in contrast to the “disastrous” alternative of full fiscal autonomy, according to Treasury Secretary Greg Hands.
The Scottish Government has refused to sign up to the Scotland Bill until it can negotiate a funding package – known as the fiscal framework – that causes no detriment to the people of Scotland.
Mr Hands is meeting Deputy First Minister John Swinney today to continue negotiations over the fiscal framework, and pledged to secure “the right deal for all taxpayers in Scotland and the rest of the UK”.
He said his over-riding objective is to fulfil the Smith Commission’s principle that the next stage of devolution should cause no detriment to Scotland or the UK.
Speaking at RBS headquarters in Edinburgh, Mr Hands told the Press Association: “So far it’s been a very constructive and cordial set of discussions between myself and John Swinney.
“John and I are both clear that we need to make sure that we get the right deal for all taxpayers in Scotland and the rest of the UK.
“We’ve done it before in terms of the Scottish rate of income tax in the 2012 Act and I think we can do it again.
“I’m confident of getting a deal, and building an agreement that is fair and built to last over a long period.
“The over-riding objective of the Fiscal Framework is to fulfil the Smith Agreement.
“When you look at what the alternative would be, full fiscal autonomy would be a disaster for the people of Scotland.
“It’s not just me saying that, it’s SNP MPs saying that.
“That would be a very bad alternative for Scotland.
“I am keen that we get the best deal for Scotland and the best deal for the taxpayers in the rest of the UK, and I am confident that John Swinney and I can deliver this deal.”
Mr Hands also pledged to listen to Scottish Government pleas to make the police and fire services exempt from VAT, as the old regional services were, but said there are “good reasons” why the exemption has not been granted.
Mr Swinney has made repeated representations to the Treasury to relieve Police Scotland of its annual £30 million VAT bill – which would be more than enough to close the force’s current budget gap.
He also warned that the Emergency Services Mobile Communications Programme, a collaboration to provide inter-operable communications across the emergency services, could result in an additional £50 million VAT cost to the Scottish public sector which other blue light services in the UK will not have to pay.
Mr Hands said: “He has not raised this specifically with me.
“I will happily look at at, but I think there are good reasons why that is the situation.”