IT was inevitable that there would be problems in settling the so-called fiscal framework, which will determine Holyrood's funding. The whole procedure can be illustrated by the phrase “The immovable object of Barnett meets the irresistible forces of Calman and Smith”.

The Smith Commission decreed that the Barnett formula should remain. Currently, we send all our national taxes to the UK exchequer in return for a block grant which gives us a 20 per cent per head advantage over England. That leaves a balance for services reserved to Westminster and there is an element of subsidy by English taxpayers, they claim. We have to leave that in in this context. Once England's annual enhancement is decided, we receive a straight 10 per cent ratio of that. That can erode our funding by some one per cent which, on a block grant of £25bn, would cut £250m annually.

So long as we have that advantage, Barnett has to operate, at the outset, in any fiscal framework calculation in order to keep tabs on how our share is progressing, because the initial transfer of income tax responsibility and the proceeds, were that to be deducted from the block grant, would not alter our available funding. But, if we increased the rate of tax, and retained these proceeds, that would further antagonise the English, whose subsidy is based on our inability to be self-sufficient.

With the Calman tax-varying recommendations contained in the Scotland Act coming in in April 2016, assuming unreduced access to the proceeds of any tax increase, and Smith being implemented in 2017, with the constraint of a corresponding recovery from the block grant, we would have two different formulae in operation. How would HMRC cope with the need to identify separately the two components? Calman should have been suspended, leaving Smith to replace it.

Professor Anton Muscatelli (“Getting fiscal framework right is fundamental to Scotland’s future”, Agenda, The Herald, February 1) points to the need to “index” any recovery from the block grant, to obviate a loss of funding. Professor David Bell recognises the problem of later years, but he is relaxed about the simplicity of the first year. In the Annual Gers report, HMRC has historically relied on assessments and estimates of Scotland's tax-take, so how reliable will their figures be for year one, given that these would form part of the budget for that year? Would all the tax due for that year be available, or not? If their figure was erroneous, and the block grant has been reduced by too much, would we have access back to the block grant to make up the deficit? If we had to borrow meantime, who would bear the cost of that?

Oxford academic Professor Jim Gallagher is concerned about population changes – but these already feature in Barnett. The problem there is if England's population rises, with no associated increase in funding, then their per capita figure would reduce, thus increasing the per capita benefit we have, but on paper only.

I would bet on the whole edifice of a fiscal framework grinding to a halt.

Douglas R Mayer,

76 Thomson Crescent, Currie.

WE have heard for years now that there is a consensus in Scottish politics – anti-austerity, social democratic, if not full blown socialist, and willing to pay more in tax for a higher quality public services.

It is with that in mind that Kezia Dugdale’s plan to lift the Scottish rate of income tax was at once the boldest and the most fiscally credible proposal put forward by a Scottish politician since devolution began (“Dugdale’s challenge to the FM over bid to raise tax”, The Herald, February 6). Although the SNP and the Tories voted down the Labour proposal, we are seeing a party at Holyrood willing to take responsibility.

No amount of spin can hide two facts – that the SNP are now on the brink of imposing hundreds of millions of cuts that will be devastating for vulnerable families across the country, and that Labour’s credible and progressive solution has been rejected by the nationalists.

This episode has shown that where social justice and tackling poverty is concerned, the SNP has style in abundance, but no substance.

Dr Scott Arthur,

27 Buckstone Gardens, Edinburgh.