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Fiscal framework talks to be held as deadline looms No deal after latest UK-Scots fiscal framework talks
(about 3 hours later)
The Scottish and UK governments are holding talks on the fiscal framework for new devolved powers, with just four days to go for a deal to be reached. The latest round of talks to establish a fiscal framework for devolved powers for Scotland has ended without a deal.
Scotland's Finance Minister John Swinney is meeting his Treasury counterpart Greg Hands in the hope of meeting the 23 February deadline. It was hoped a deal could be struck before representatives of the UK and Scottish governments are due to outline their positions at Holyrood on Tuesday.
Both sides will be called to give evidence to Holyrood's devolution committee on that date. Finance Secretary John Swinney and his counterpart Greg Hands have held their tenth meeting on the matter in London.
Mr Swinney and Mr Hands hope a deal can be struck this week. However, with the sides differing on key conditions of the settlement, no agreement has yet been reached.
However, both men have said the onus is on the other to give some ground. Both Mr Swinney and Mr Hands had voiced hopes a deal could be struck, but both men also said the onus is on the other to give some ground.
Ahead of the meeting, Mr Swinney said he remained "committed to reaching an agreement that is in line with the principles of the Smith Commission". BBC Scotland understands progress was made in Friday's talks, but they broke up without a final agreement.
He said: "For both parliaments to have adequate time to scrutinise an agreement, it is important that we make progress."
Analysis by Glenn Campbell, BBC Scotland political correspondentAnalysis by Glenn Campbell, BBC Scotland political correspondent
No deal. No further devolution. Holyrood can't take on extra tax and welfare powers unless there's a fiscal framework to underpin them. No deal? No further devolution. Holyrood can't take on extra tax and welfare powers unless there's a fiscal framework to underpin them.
Any framework will include a system to reduce the grant Holyrood gets from the Treasury, to reflect its growing ability to raise its own revenue.Any framework will include a system to reduce the grant Holyrood gets from the Treasury, to reflect its growing ability to raise its own revenue.
The two sides are struggling to agree the fairest way to achieve that. The Scottish government says the Treasury's current offer would leave it out of pocket. The Treasury disputes that and says SNP ministers can't expect taxpayers in the rest of the UK to underwrite all the risks that come with extra responsibilities.The two sides are struggling to agree the fairest way to achieve that. The Scottish government says the Treasury's current offer would leave it out of pocket. The Treasury disputes that and says SNP ministers can't expect taxpayers in the rest of the UK to underwrite all the risks that come with extra responsibilities.
The Scotland Office minister, Lord Dunlop, says the UK government is "committed to go the extra mile to get a deal". But First Minister Nicola Sturgeon says she "will not sign up to a deal that's unfair to Scotland".The Scotland Office minister, Lord Dunlop, says the UK government is "committed to go the extra mile to get a deal". But First Minister Nicola Sturgeon says she "will not sign up to a deal that's unfair to Scotland".
First Minister Nicola Sturgeon has written to Prime Minister David Cameron calling for him to step in over the matter. First Minister Nicola Sturgeon has previously written to Prime Minister David Cameron calling for him to step in over the matter.
He has said that "no one is keener" than he is to reach an agreement, but also warned the Scottish government would have to be ready to "move towards" his position.He has said that "no one is keener" than he is to reach an agreement, but also warned the Scottish government would have to be ready to "move towards" his position.
Despite months of talks, the deadline for agreement was pushed back earlier this month.Despite months of talks, the deadline for agreement was pushed back earlier this month.
On Wednesday, Scottish Conservative leader Ruth Davidson proposed a compromise that would see both sides give some ground to agree a shorter-term deal that would be reviewed in five years.On Wednesday, Scottish Conservative leader Ruth Davidson proposed a compromise that would see both sides give some ground to agree a shorter-term deal that would be reviewed in five years.
Earlier this week, Mr Hands was criticised for being on holiday with his family while negotiations were taking place.Earlier this week, Mr Hands was criticised for being on holiday with his family while negotiations were taking place.
A Treasury spokeswoman has said the UK government had shown it was willing to compromise and "go the extra mile" to secure an agreement.A Treasury spokeswoman has said the UK government had shown it was willing to compromise and "go the extra mile" to secure an agreement.
The two sides differ on key parts of the deal, in particular their interpretation of the "no detriment" principle called for by the Smith Commission on further powers for Scotland.The two sides differ on key parts of the deal, in particular their interpretation of the "no detriment" principle called for by the Smith Commission on further powers for Scotland.
This means neither the Scottish or UK budgets should be left worse off in future by the finalised agreement. This means neither the Scottish or UK budgets should be left worse off in future by the finalised agreement, but the negotiating teams differ in their interpretations of this.
'Not logical''Not logical'
The Scottish government claims the Treasury's latest offer would amount to an "almost £3bn cut", while Mr Hands insists an offer tabled by Mr Swinney is "not logical" and "not fair" to taxpayers across the rest of the UK.The Scottish government claims the Treasury's latest offer would amount to an "almost £3bn cut", while Mr Hands insists an offer tabled by Mr Swinney is "not logical" and "not fair" to taxpayers across the rest of the UK.
The key issue concerns population growth. With Scotland's population forecast to grow more slowly than that of the UK as a whole in coming years, the two sides differ on how compensation to cushion against the economic impact of this should be calculated.
The deal proposed by Ms Davidson would see both parties give some ground.The deal proposed by Ms Davidson would see both parties give some ground.
She wants the Scottish government to agree to the UK government's new method of calculating the amount of money it receives each year from the Treasury.She wants the Scottish government to agree to the UK government's new method of calculating the amount of money it receives each year from the Treasury.
In return, she wants the UK government to guarantee the devolved administration would not receive "a penny less" than it would under its preferred mechanism, effectively insuring Holyrood against any budget shortfall.In return, she wants the UK government to guarantee the devolved administration would not receive "a penny less" than it would under its preferred mechanism, effectively insuring Holyrood against any budget shortfall.
This deal would then be reviewed in full after a five-year trial period.This deal would then be reviewed in full after a five-year trial period.