Mundell slates SNP threat to veto new deal as ‘ludicrous’

SCOTTISH Secretary David Mundell yesterday accused the SNP of a ‘ludicrous’ attempt to seize more cash from English taxpayers as the row over Holyrood’s new powers escalated.

He also discussed the possibility of a cash deal between the two Governments being delayed until after May’s election, which could scupper hopes of income tax being devolved by 2017.

It is understood that senior Westminster figures are privately preparing for the SNP to veto the new powers, triggering a fresh constitutional crisis.

Finance Secretary John Swinney has set a deadline of next Friday for agreeing the ‘fiscal framework’ that must underpin the Scotland Bill, but Mr Mundell branded this ‘illogical’ as the stand-off continued.

The f ramework i s the mechanism required to ensure Scotland’s block grant from Westminster is cut by the right amount once tax and welfare powers are devolved, so neither the Scottish Government nor the Treasury is worse off – a ‘no detriment’ principle. But there is a row over whether that should apply only when the new powers are devolved, or whether – as the SNP argues – it should continue for years to come.

Mr Swinney – backed by Labour – favours a system which would protect Scotland’s budget if, as is expected, its population grows less quickly than England’s and the economy does not grow as fast as a result.

Mr Mundell said: ‘I can’t believe that the Scottish Government position is really that they should bear absolutely no risk from the decisions that they take.

‘It’s simply ludicrous to suggest that tax growth in England should somehow come to Scotland, whereas in Scotland, if we have tax growth we keep it.

‘I don’t blame John Swinney for chancing his arm and saying, “We’ll keep the Barnett Formula, we won’t bear any risk and, by the way, if we get any extra money we will keep it and, actually, if there’s any extra money raised in England we’ll have a bit of that too”.

‘I would describe that as having your cake and eating it – and having a bit of everybody else’s cake too.’

Mr Mundell said the two Governments were close to reaching a deal, adding: ‘I don’t think the people of Scotland would forgive either Government if they walked away from this agreement. It would mean this significant package of powers that people made clear they wanted during the referendum campaign would be set aside.’

Asked what happens if an agreement is not reached by March 23, when Holyrood is dissolved for the election campaign, he said he would ‘revisit the situation with a new parliament and a new Government’.

Mr Swinney said: ‘We will continue to work on achieving a fair deal – but one that delivers on the principle of no detriment.

‘We will only sign up to a deal that is fair. We will not sign up to a deal that systematically cuts Scotland’s budget regardless of anything that this or future Scottish Governments do.’