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Fiscal framework: Ministers meeting in Edinburgh for crunch talks Fiscal framework: No agreement reached after latest crunch talks
(about 2 hours later)
Crunch talks on the financial arrangements to accompany the Scotland Bill have resumed. Crunch talks aimed at ending a dispute over the financial arrangements to accompany the Scotland Bill have broken up without agreement.
Deputy First Minister John Swinney and UK Treasury minister Greg Hands are meeting in Edinburgh. Deputy First Minister John Swinney and UK Treasury minister Greg Hands met in Edinburgh.
Scottish ministers want a fiscal framework deal agreed this week so it can be scrutinised by Holyrood. The row concerns how much should be cut from the block grant once Scotland gains new tax powers.
A source close to John Swinney said a massive gap remained between the two sides, but the UK government said it was optimistic a deal could be reached. Both the Scottish government and the UK Treasury said they would continue to seek a solution.
'Fair agreement'
Speaking after the latest talks, Mr Hands said: "We discussed a number of issues, there are still a number of issues out there.
"I think we need to get a deal that is fair to tax payers in Scotland and fair to tax payers across the UK.
"That is one of the key considerations of the Smith agreement - tax payer fairness - and we need to make sure we can get a deal that both governments can sell to their parliaments as well."
Mr Swinney told BBC Scotland: "We are working very hard to try to secure an agreement but I don't think we should underestimate the scale of the issues that we have to overcome to secure that agreement.
"We want a position whereby the tax payers in Scotland and tax payers in the rest of the UK are no better and no worse off as a consequence of the devolution of these responsibilities."
He added: "I am not going to set any barriers in the way of getting an agreement. I am determined to get an agreement - but only one that is fair to Scotland."
Scottish ministers had previously said they want a fiscal framework deal agreed this week so it can be scrutinised by Holyrood.
The breakthrough needed on the fiscal framework will underpin new powers for Holyrood.The breakthrough needed on the fiscal framework will underpin new powers for Holyrood.
Mr Swinney has repeatedly said he would not sign a deal which he believed was bad for Scotland.
It has been claimed the block grant ministers in Edinburgh get from the Treasury could be cut by £7bn if certain calculations are used.It has been claimed the block grant ministers in Edinburgh get from the Treasury could be cut by £7bn if certain calculations are used.
But the UK government has insisted that a good deal is on the table.But the UK government has insisted that a good deal is on the table.
On Sunday, Mr Swinney pledged that key documents used to agree any new funding deal for Scotland would be published for scrutiny.On Sunday, Mr Swinney pledged that key documents used to agree any new funding deal for Scotland would be published for scrutiny.
He said he was working "flat out" to get a deal, adding: "With time running out, we need to make substantial progress."
A source close to the deputy first minister said the Scottish government would use whatever time was possible to agree a deal.
That leaves open the possibility the deadline could be extended if the Scottish Parliament still has time to look at the framework before it breaks up for the May election.
'Too important'
Scottish Secretary David Mundell said there had been significant movement from the UK government to address Scottish government concerns over population growth.
He added the framework would be reviewed after "a few years" to make sure it was fair for Scotland and the rest of the UK.
The UK government has said it would not walk away from the talks.
Scottish Labour has, meanwhile, called for both sides to set out the principles behind their positions on the framework.Scottish Labour has, meanwhile, called for both sides to set out the principles behind their positions on the framework.
MP Ian Murray has written to Mr Hands and Mr Swinney saying the "negotiations are too important to be happening behind closed doors".MP Ian Murray has written to Mr Hands and Mr Swinney saying the "negotiations are too important to be happening behind closed doors".
Both sides have said they would not provide a running commentary on the talks.Both sides have said they would not provide a running commentary on the talks.