Sturgeon warned as deal agreed on Scots powers


David Cameron said it was a “significant day for devolution” as the two sides reached an agreement on how the annual Scottish budget will be delivered after months of deadlock.

It means the SNP will have to take more responsibility for taxes and welfare spending north of the Border. Scottish Conservative leader Ruth Davidson said: “The buck stops with them.”

Talks over the so-called ‘fiscal framework’ put forward by the cross-party Smith Commission in the wake of the No vote in the referendum began in March last year.

The negotiations had stalled amid claims from the Nationalists that Scotland would be “worse off” under the new arrangements, sparking fears that the new Scotland Bill would have to be scrapped.

However, both sides have made concessions in recent weeks, with the ­final deal understood to be close to the compromise suggested by Ms Davidson of a “safety net” to protect Holyrood’s coffers.

The agreed package will see the Scottish budget protected for the next six years and guaranteed to receive “not a penny less” than it would under the current setup until 2022.

There will also be £3billion of additional borrowing powers and £200million to introduce all the new changes.

The deal was agreed during a telephone conversation between First Minister Nicola Sturgeon and Chancellor George Osborne following a revised offer from the Treasury yesterday afternoon.

Mr Osborne said: “This enables us to deliver on the Vow we made to the Scottish people and delivers one of the most powerful devolved parliaments in the world and the economic and national security that comes from being part of the UK.

“This clears the way for the debate in Scotland to move on to how these tax and spending powers should be used.”

The Prime Minister said: “The agreement is a major milestone in delivering a powerhouse parliament for Scotland and will enable us to make Holyrood one of the most devolved parliaments in the world.

“We have reached a deal which is fair to Scotland and fair to the whole of the UK. It delivers accountability to the Scottish Government and transforms politics in Scotland.”

Mr Cameron continued: “It means May’s Holyrood elections can be fought on the issues which matter the most: how the Scottish Government should use these new powers rather than what they are.

“I welcome this agreement, which shows that Scotland’s two governments can work constructively together for the benefit of Scottish people.”

Ms Sturgeon announced the agreement in a statement to the Scottish Parliament at 5.30pm, just hours after ­Finance Secretary John Swinney said there was still one “persistent” issue remaining between the two sides.

The biggest stumbling block has been the principle agreed by the Smith Commission which said that any deal should result in “no detriment” to taxpayers in Scotland or the rest of the UK.

After receiving the fresh offer from the Treasury, the First Minister told Holyrood: “There is now an agreement in place in principle that I believe we can recommend to Parliament. This deal will not allow a single pound or even a penny to be taken from the Scottish Government budget.”

Ms Davidson welcomed the deal and described it simply as “devolution delivered.” She added: “It delivers the stronger, more responsible Scottish Parliament that the people of Scotland were promised.

“It delivers on exactly the kind of Scotland that most people want – not separated from our neighbours but a Scotland with more power and control over its own affairs, still backed up by the strength and security of the United Kingdom.

The Scottish Tory leader continued: “It has not been easy and compromises have been required by both sides, but today’s deal shows that our two governments can work together for the good of Scotland.

“In the longer term, it now throws a major challenge to the SNP. Grudge and grievance will no longer wash. On tax, on welfare, and on our public services, the buck stops with them.”

Her Labour counterpart, Kezia Dugdale, described the news as “a historic moment for Scotland and one that we should all celebrate”. She added: “Scottish Labour’s position has been clear all along – we would only support a deal that protected the Barnett formula, which has benefited generations of Scots. It appears that this deal does exactly that and has our support.

“Now that an agreement has been reached every single political party in Scotland must focus on what we can do with these major new powers. The opportunities they provide are huge.

“Scottish politics will never be the same again thanks to these new powers. We have entered a new and exciting era of devolution.”

However, Lib Dem leader Willie ­Rennie was critical of both the Treasury and the SNP. 

He said: “The SNP and Tories have not agreed a good long-term deal for Scotland. The First Minister has still been unable to explain why she has agreed to the Treasury funding model given she has bitterly opposed it for months.”