MSPs have split over John Swinney's attempts to reach a deal with the U.K. Government on Holyrood's new powers, amid growing signs talks on the 'fiscal framework' are heading for failure.
In a report out today, Labour and Conservative MSPs refused to endorse the Finance Secretary's preferred method for reducing the Scottish Government's annual grant from Westminster when Holyrood takes control of income tax and other levies.
It followed other signs agreement on the fiscal framework will not be reached, potentially scuppering new powers due to be devolved under the Scotland Bill.
Speaking during First Minister's questions, Nicola Sturgeon questioned whether the UK Government was acting in good faith in the long-running talks.
She also appeared to pre-empt the explosive row that would follow if talks fail when she accused both Labour and Conservative MSPs of pressing for a deal "that will not be good for Scotland".
Bruce Crawford, a senior SNP MSP, heaped further pressure on the process when he underlined the need for an early deadline so the Holyrood committee he chairs would be able to scrutinise the agreement fully.
It followed claims, revealed in The Herald, that the February 12 deadline imposed by SNP ministers was "artificial" and the talks could run an extra two or three weeks, if required, and still be approved in time for the Holyrood election on May 5.
In a letter to both governments, Mr Crawford called for a deal to be reached even earlier, before February 11, so ministers could give evidence on that date.
The Scottish Government and the Treasury have been in talks for months over the fiscal framework, which is described as the financial underpinnings to the Scotland Bill.
Under the Bill Holyrood will raise and retain approximately £11billion in income tax so its annual block grant from Westminster must be reduced accordingly.
The dispute centres on how the reduction should be calculated in future years.
Mr Swinney favours a mechanism known as per capita indexation, which would protect Scotland if, as expected, its population grows more slowly than England's.
Leading economists agree the method would be the most advantageous for Scotland, potentially adding hundreds of millions of pounds to Holyrood's budget within three or four years compared with other systems for adjusting the block grant.
However, it has also been claimed it would be unfair on the rest of the UK as increasing amounts of income tax raised south of the Border would be used to fund services in Scotland despite the tax being devolved.
In a report today, Holyrood's finance committee split on party lines over the per capita indexation method, with Tory Gavin Brown and Labour's Lesley Brennan refusing to back Mr Swinney's support for it.
The report also reveals how Mr Swinney changed his mind after backing an alternative system for recalculating the block grant known as indexed deduction.
The system - which Mr Swinney previously described as the "the most robust mechanism" - has already been agreed as the basis for budget adjustments required by Holyrood's income existing tax powers.
Speaking during First Ministers Questions, Ms Sturgeon said she wanted to reach agreement but told MSPs: "We will not sign up to a deal that systematically cuts Scotland’s budget regardless of anything that this Government does or future Scottish Governments do. "The big question now is whether the Tory Government in London will also act in good faith to try to get that deal."
She claimed Tory MSPs were "asking us to sign up to a deal that will not be good for Scotland" and said she was "aghast" that "Labour appears also to be asking us to do that".
She added: "The negotiation is between the Scottish Government and the Treasury: it is astounding how quickly Scottish Labour defaults to taking the side of the Tory Treasury. "It seems that the better together alliance is alive and well."
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