03/02/2016 Politics Scotland

Good afternoon and welcome to Politics Scotland.

Coming up on the programme: We'll be bringing you live coverage as MSPs

debate the budget, with the opposition challenging

And after many months of meetings like this, the Prime Minister

Here at Westminster, David Cameron tells the Commons his EU reform

proposals are "an important milestone" but there's more work

Even so, are we on course for a June referendum?

Holyrood is holding a showdown vote on income tax this afternoon

as Opposition leaders challenge the Scottish Government to raise

extra money to protect public services.

Ministers are determined to resist the demands for a tax increase,

pledging instead to boost pay, by extending the Living Wage

The budget for 2016-17 marks the first time Holyrood ministers

have been required to set income tax rates in Scotland.

This from our political editor Brian Taylor.

Nicola Sturgeon offers social care, visiting a centre in Midlothian that

helps adults with learning disabilities. Care workers are paid

a Living Wage. The First Minister wants that extended across Scotland

and says there are funds for that the budget being today. It she says

that Labour's plan to increase income tax. This is a policy that

will take money out of the pockets of those we are trying to push up

the income scale by boosting the incomes of low paid public sector

workers, to claw that back through an increase in the basic rate of

income tax is the wrong thing to do. Back to school for Labour's minister

in Cowdenbeath. She says all MSPs need to learn a lesson and support

her plans for 1p on tax to support rebates for the low paid. The

proposal strip hundreds of millions rebates for the low paid. The

of pounds out of vital public services including schools, 50% of

what our councils do. I am not prepared for the next generation of

children to pay the price of Tory austerity. Members of the GMB union

warned that thousands of jobs are at risk from council spending cuts.

Scottish ministers' reply is, use a tax rise we see pay rise. Today will

help define Scottish politics for the elections in May.

I'm joined this afternoon by Andy Maciver, who was formerly

Head of Communications for the Scottish Conservatives

I think I know what your answers is going to be, but is putting people's

taxes up evil twin? No. I can see why they are trying to do this --

vote winner. It is a reasonable thing to do at this point but what

the strategy fails to grasp of the hangover of constitutional politics

we still love. She is trying to move left to attract voters back from the

SNP and we are not in a climate where but as possible at the moment.

Why? We are still in constitutional politics and people voting SNP are

doing so for more than ideological reasons, they are voting for a party

that they things done is up for Scotland more than anyone else. The

only voters it might attract our left-wing unionists. I do not think

it is a vote winner. I do not think it is going to attract anybody knew.

It might hold onto some votes. Presumably that applies to the

Liberal Democrats as well. Yes. More curious for them to have done it. It

is the obvious mode of differentiation to go down for

Labour. I was surprised that the Lib Dems did it and I do not

Labour. I was surprised that the Lib will do his vote any good. Why is

the cure for education... We already spend more per capita than in

England on education and the English education system seems to be at the

very least as good as the one in Scotland so why spend more money? In

the fullness of the next three of Scotland so why spend more money? In

four years Michael Gove reforms will make the system much better than the

one we have here. Or not. There is no evidence that the cure for

education is money. Spending has been going up and education has been

getting worse. Reform is required rather than more money. John Swinney

is speaking about his budget. A programme that will enhance our

social infrastructure and help address climate change. It takes

forward a bold and ambitious programme of public sector reform to

ensure the sustainability and quality of our services and delivers

on our commitments to the people of Scotland at a time of pressure on

household incomes. The government proposed a Scottish rate of income

tax on the first time. The limited nature of their income tax power

available only allows for a single rate be set and then applied to all

three income takes rate bands. This means the rate on the wealthiest

would apply to the lowest taxpayers. Proposals to increase income tax by

1p would hit those taxpayers least able to pay. How does that comment

match the comment from last able to pay. How does that comment

the Finance committee when he said he viewed the Scottish rate of

income tax as the progress of power? Clearly people on higher incomes

paid more than those on lower incomes are surely what he has just

said is wrong. Order. What I said is that the proposals to increase

income tax by 1p next year that the proposals to increase

those taxpayers least able to pay. Of course it will, it puts up tax

for the lowest paid people in our society. Whether those individuals

are newly qualified teachers, they would be hit by this rise, and

police officers, firefighters, bus drivers, charity workers, shop

workers, hotel workers, workers across the land would see their

income tax rise. I wondered if the across the land would see their

cabinet secretary would reflect on the fact that teachers are doing

their own photocopying, buying jobs as for the classroom. There are no

resources and our classroom -- jotters. They might understand why

this is being done. Would he welcomed the rebate that we put in

place to protect those on the lowest incomes? I want to say to the

teachers and public service workers across the country who have had to

injure his constraints because of the austerity programme of the

United Kingdom government that I value the Cyprus faces they have

made and the last thing I am going to do is put up their taxes --

sacrifices. She has just raised the issue of the rebate proposal to

mitigate the effects of the tax rise. The immediate conclusion to

draw from that very announcement of area bit proposal is the recognition

that this tax rise is damaging to the incomes of low paid workers. No.

Then there are the legislative and practical issues that would have to

be quickly overcome to make that concept and reality from April this

year. Let us go through the detail. Labour will need to clearly

demonstrate the legal basis under which they believes such a payment

can be made. Order. Let us hear the Deputy First Minister. I am only

going to dismantle Labour's proposal. If it is a tax relief it

is outside the powers of the Scottish parliament in relation to

income tax has conferred by the Scotland act 2012. If it is a social

security payment that is outside the competence of Parliament as defined

in the original Scotland act of 1998. Further evidence this proposal

is not properly thought through is provided by the lack of clarity

about how it would be administered and in particular how it could be

done within the ?75 million allocated to this proposal by

Labour. An estimated 1 million taxpayers, workers and pensioners

could be eligible for the rebate which would cost ?100 million. More

than Labour have targeted for the rebate which does not even meet the

needs of individuals within our society. The second problem is on

top of that the cost of setting up and operating administrative systems

by 32 local authorities across Scotland. We know already that it

costs local authorities many millions to administer help with

council tax bills were Makkah for it is have a lot of information about

the circumstances of claimants. The rebate payment is likely to be

candid of income tax for tax purposes and those who receive it

would be liable to pay tax on it. It does not seem too much to expect

those who propose policies of this kind to have at least considered

these issues but there kind to have at least considered

evidence this happened. The only conclusion we can draw is it is

unlikely anyone would receive the rebate on the basis they were

offered that proposition to the rebate on the basis they were

people of this country. His speech is reminiscent of what we heard from

the backbenches yesterday, all about fine as big some detail -- aspects.

Order. Let us hear. This is an excuse and not addressing the

question of principle. What do you think of the principal of what we

are proposing? That politically is important. That was a very relieved

revealing intervention. The detail matters. On the 1st of April a

citizen of this country who was going to have their tax raised by

Labour and will not haven't raised by the SNP would have the right to

expect that what has been promised by Labour can actually be delivered.

What Jackie Baillie has got to do is explain why the legal practical

operational issues that I have raised are somehow overcome by the

back of the fag packet which she has written a song. -- this one. This

government will deliver a pay rise to around 50,000 of the lowest paid

workers in Scotland. The upgrade of the living wages extension to social

care workers and uplift of ?400 for those covered by public sector pay

policy earning ?22,000 less will see tens of thousands better off because

of this budget. That is the difference between the SNP and

Labour. We want to give the lowest paid a pay rise and Labour want to

give them a tax rise. I understand he was too busy to come out to the

parliament today to talk to local government workers who were lobbying

outside Parliament. Since he has reiterated that he has said this

against any increase in tax what is his message to the 16,000 local

government workers liable to lose their jobs as a result of ?500

million of cuts? The SNP is determined to protect their income

is not punished them with a tax rise that the Labour Party is coming out

with. This budget reaffirms... No afternoon would be complete without

him. It is simple, how can you protect their income when they do

have a job? Let us hear the Deputy First Minister. This is the

government that has given public sector workers the guarantee of no

compulsory redundancies. That is what we have given the people of

this country. This budget reaffirms our commitment to deliver in growth

through investment in education and skills. Almost ?5 billion is

invested annually in delivering school education with averages spent

at your power pupil hired in Scotland than in England. It will

reach ?13 billion. We will protect the budget in Scotland and ensure

that higher education spending is over ?1 billion in 2016-2017. That

was John Swinney. The Finance Secretary

John Swinney there. We'll have more from the chamber

later in the programme. David Cameron has made

a statement to the Commons, outlining his draft deal

with the European Union on reforming The Labour Leader, Jeremy Corbyn,

criticised his efforts, saying he'd negotiated

"the wrong goals, in the wrong But the Prime Minister

insisted his fresh settlement would ensure Europe

works for Britain. If we stay, Britain will be in there

keeping a lid on the budget, shopping away unnecessary regulation

and securing the commitments. Ensuring that Britain can have the

and securing the commitments. best of both worlds. In the parts of

Europe that work for us and out of those that don't. In the single

market free to travel around Europe free to travel around where Britain

and its partners can be safer and more prosperous but with guarantees

we will never be part of the Europa, never part of a European army --

euro. And never be part of a European superstate. That is a path

that can lead to a fresh settlement for Britain and a reformed European

Union that will offer the best future for jobs, security, and

strengthen our country. A settlement which will offer families security

at every stage of their lives. That is what we are fighting for.

not a full and reader Prime Minister's ended up exactly where he

would be, making the case to remain in Europe which is what was always

intended, despite renegotiating spectacle, choreographed for TV

cameras all over the continent. Mr Speaker, as his own backbenchers

keep telling us, the proposals from the European council are simply

tinkering round the edges. They have little impact of the EU delivers for

tinkering round the edges. They have Britain's workers and businesses. We

welcome proposals for a veto over commission legislation, even if it's

heavily qualified, it seems the Prime Minister has moved towards the

Labour Party's view on this issue and we welcome him to that.

Protecting non-Eurozone states is necessary, but we cannot let these

opposable is hamper efforts to regulate the financial sector,

including bankers' bonuses. The crucial detail the emergency brake

for EU migrants is to entirely absent. When is that information

going to be made available? In any case, the Prime Minister calls the

strongest package ever on abuse of free movement doesn't begin to

tackle the real problem of the impact of migration on communities

and wages. First Minister of Northern Ireland has rendered the

Minister today. They see the following, and I think honourable

Right Honourable members should listen. We believe that hoping a

referendum as early as June will maim that a significant part of the

referendum campaign won't necessarily run in parallel and risk

confusion when clarity is required. We believe that the European

referendum is of vital importance that the whole of the United

Kingdom, and the debate leading up to it should be free of other

Kingdom, and the debate leading up campaigning distractions. We believe

it would be better for you, the Prime Minister to commit to a

referendum later in the year. So, will the Prime Minister take the

agility and confirm that he will be respectful of the governments of

Scotland, Wales and Northern Ireland and defer until June? We were

promised we would deal with the excessive immigrant numbers, which

is now being dealt with a European court of human just it -- European

court of justice. We were told that these would be legally binding, and

also irreversible. But, now it will be stitched up by a political

decision, by the European council and not by a guaranteed treaty

change, at the right time, and this, I had to say to the Prime

change, at the right time, and this, is a wholly inappropriate way of

dealing with this matter. Our Westminster Correspondent David

Porter and his panel of parliamentarians

were listening to that. No prizes for guessing what we'll be

talking about this week. Let me introduce, Malcolm Bruce, Lord

Bruce, Ian Murray for Labour, Drew Hendry for the SNP. First of all,

Drew, you asked a question today and you got a telling off from the

Speaker. You got a telling off, what was that about? You get told off for

going out to votes. I've spoken to the Speaker and we've cleared that

up. I'm glad your no longer on the naughty step. Let's move to Europe.

The Prime Minister says it's an important milestone, this deal, that

he is negotiated. Your party wants to stay in the EU but you don't want

the vote as many people? It's disrespectful to the Scottish, Welsh

and Northern Ireland Parliament during a time when elections are

going on for those bodies. I think people need to have a clear view,

understanding of the issues will be voting on in Europe and this is the

wrong time to muddy the waters with this kind of panic exercise to make

sure they can get something through this kind of panic exercise to make

as quickly as they possibly can. But there could be 6-7 weeks between the

Scottish elections and any EU bikes. Surely voters can consider two

things at one time, can't make? What they can can clearly consider

different things, but if you consider the Scottish Referendum

they had time to discuss the issues. People are being given no such time

with this issue. June 23 is this -- disrespectful to all the assemblies,

to the Scottish Government, and the London mayor elections to be

happening at the same time. We need clarity. This affects every single

person, their incomes, their future. Do you buy this argument that if

David Cameron decides to go forging the 23rd is being disrespectful to

Scotland? I don't think it is a tall, and the first thing to bear in

mind we don't yet have a negotiation or a date. But if it's June 23, I

think it's a bit insulting to the Scottish Electric to say that they

cannot digester European arguments which had been going around for

years, in a period of six weeks. Alex Salmond said that it's a

sensible time. It's within the time gap that he set out side ending is

being this respectful. Ian Murray, what about this timing issue. Your

leader once the referendum soon and if it's June then, so be it? Week in

re has -- re-rehearsing this argument. Let's get on with having

those arguments, making sure that the people across United Kingdom now

the strength of those arguments and get into the polling station. The

last thing we need is another paused referendum, where it goes round and

damages the economy of the UK, and the -- and Scotland. Let's start

talking about process and benefits of staying in. Do you have any

problems with a date? The pro Minister can't carry his party with

him, because they are split over it. The sooner it happens the better.

The good of the country, for this issue to be resolved, we need to

know what's involved, so I think it should be possible to decide that

issue at the end of June. And I rather agree that running it all

through the summer would damage business confidence, create greater

uncertainty. I don't think I would be prepared to put my party's

interest about the nation. Unfortunately, the dryness does the

everyday. The deal that David Cameron has outlined, with a few

everyday. The deal that David nips and tucks, that will be the

deal that Europe agreed to. Is it good enough? It won't be given at

the Eurosceptics. It likes Scottish Nationalists, it's never enough.

the Eurosceptics. It likes Scottish They want outcome of the Scottish

Nationalists want out, but for most people, they had to balance the view

that there's been some good will towards the UK. Fundamentally, in

the end, we have to decide whether we go to be part of adventure or

leave it. We don't really want to face up to the consequences, because

nobody really knows, if we'd leave. face up to the consequences, because

You will live with this deal if the Prime Minister is the best it can

get? If he can convince the UK Electric that we can stay in Europe

then sat that particular argument. He hasn't touched the issues of

holiday pay, maternity leave, though socialist issues being stripped

away. There are pros and cons, and there are many more prize of staying

within the European Union, and Malcolm is right, the Europe

sceptics that once out, nothing will ever please them. Let's get the

referendum outweighs quickly as possible. The Prime Minister is

trying to fix his party and not the country. When not in the euro, were

not in Schengen arts we need to create alliances from inside the

tent rather than outside. This is more about the Prime Minister try to

fix his party rather than get a deal for Europe? There are 20 of Labour

members of Parliament about the campaign to leave Europe. It cuts

across all political parties. Where I agree with Ian Malcolm is that

this is an issue where you have to weigh up pros and cons. Most of us

have put the the pros and cons. I'm currently undecided. The deal that

the pro Minister has negotiated, if that's what's finally agreed will be

a big improvement on what we have now, but we also have to face up,

this is a global issue. What is Britain's role in the world? The

generations to come. That's what we need to resolve. It makes it sound

though, that you're not entirely convinced by the deal that the pro

Minister has put forward? This is my individual perspective. What I want

to get us back to is a common market. If you go shedding gets us

further towards that... But I want to see the small print, which will

be most important. I say, this is a once in a generation chance. I was

three when a last referendum happen. We must settle it the next

generation, have a proper debate, way up pros and cons. All our votes

will have the same lecture in power as the rest of the country. We need

to decide our future and let's get on with it. Drew Hendry, whatever

the date is, whether it's June or put back to September, this is such

an important issue, that with all due respect to the other elections

which take place, it's going to overshadow everything, isn't it?

That's twice part of the problem. That's why is this respectful to the

rest of the governments and assemblies that are having

elections. This issue of the EU, it's not perfect, nobody is saying

that, it there are things that need to be done with it. Nobody is

convinced by David Cameron's argument. What's important is that

Scotland benefits from being in the EU, and the EU benefits from

Scotland benefits from being in the Scotland as a member. We need to

know the impact this will have, as you have that at the same time when

we got the Scottish elections going on is very bad. Is it right that

because this is such a big constitutional issue, that it will

dominate editing? We have a mature enough electric -- Electric and --

electorate and media that they will be a substantial periods between the

elections that that will be inadequate time to weigh up as a

country and make our decision. We had enough time, Ian Murray, if the

pro Minister wanted to go even sooner? The electorate are

intelligent enough to work out the issues that are important to them. I

would have thought that Drew Hendry would have want -- wanted to get

that moving so he doesn't have two answer how terrible his Government

have made Scotland. Once the elections are closed down, they can

move on to the arguments about the Scottish elections. Do you think

it's one of those issues that he will have already made their mind up

about? Six weeks seem to be long enough. The question is, do we stay

or do we leave? I think if people are going to engage with this debate

they can do it in six weeks. Do we are going to engage with this debate

stay or do we leave? Gentlemen, we are going to leave and we are going

to return to the studio. What about having the referendum six

weeks after a Scottish election will. No leader up here, I can't

figure many parliamentarians who actually want exit the EU. So it's

not really... You can't see that topic overshadowing the Scottish

elections, because everyone things the same way in it. So I actually

don't think it's going to be that big a deal. I think it will be seven

weeks, not six. In seven weeks is a reasonably long time. If you think

about the independence referendum campaign, it in get very, very

heated until quite near the end, so I think it's probably OK. I don't

see overshadowing the Scottish elections much. What did you make of

what happened in the count -- House of Commons today? I was expecting

very impassioned speeches by the Eurosceptics on the Tory side and it

seemed a little bit muted. They looked a bit out of puff. The deal

that Cameron has reached is quite superficial. If you look at what he

was promising before and what his rhetoric was today. He's saying we

won't have to join Schengen, being the European army, none of these

things were going to happen, so you think it would be a reasonable day

for Eurosceptics to put a little bit of bite into what they were saying,

but I don't think they organise themselves enough. They can't decide

what campaign is going to be official. They're just not together.

We had Liam Fox, OK, he may have Liam Fox was though he's got other

irons in a fire, but Bill Cash? His very existence is to do with getting

out the European Union. It sees -- it should be his moment? It looks

like they lost a bit of a PR war this weekend. There was a lot of

Cameron backing away from deals, and new lease is going out saying deals

were going ahead. But actually, if you look at the substance of it...

They'll be hoping for a big figure to lead to big get out campaign. It

looks like it's not going to be Theresa May. I don't think it will

be Boris Johnson, either. So you start to wonder where that big

figure is actually going to come People who want to stay in the EU

want this out of the way quickly. There is probably an underlying bias

against staying in in the polls so they are probably further ahead than

the polls say they are. The people who are for the EU want this done

and to move on. Back to the Chamber now,

where the Scottish Government's budget is up for debate

this afternoon. The Finance Secretary has pledged

not to change income tax rates but Labour and the Lib Dems are both

pushing for a 1p increase Kenneth Gibson is speaking on behalf

of the finance committee. Expert witnesses have explained how

taxpayers could be expected to change their behaviour in response

to tax changes. Evidence suggests that higher rates of income tax are

likely to lead to behaviours that impact negatively. Including tax

avoidance and migration. These are particularly important in relation

to high earners who are more likely to have the means and mobility to

change their behaviour in response to tax changes. The highest

change their behaviour in response more than half of income tax

revenues while the top 1% contributes a fifth. 11,000

additional rate taxpayers are in Scotland. Such a large proportion of

tax revenue depends on a small number of taxpayers. It is

imperative the impact is assessed before are made. The intention

underlying will be responsible for raising more of the money than it

spends that be accountable to the electorate. A large part of this

income will continue to be dependent and the members will know the

mechanism by which it will be reduced is of supreme and

importance. We have raised concerns about the impact of relative

population growth on the adjustment and we welcome the fact that the

Deputy First Minister supports the index deduction per capita method

and we recommend this is a great within a fiscal framework that will

underpin the devolution settlement. Time is of the essence of Parliament

is to scrutinise it Parliament to do solution. We look forward to

questioning the finance minister in the coming weeks to consider if

these criteria are met and it meets the no detriment principle. The

finance committee has consistently raised concerns about the lack of

transparency arising from the devolution of financial powers I

believe that full transparency is essential to secure public

confidence. It is imperative that the fiscal framework contains

detailed explanations of how it will be adjusted. Regarding already

devolved tax we have followed operations regarding land and

buildings transaction tax. Stakeholders raised concerns that it

had a negative effect on sales of the higher end of the property

market. It is not possible the higher end of the property

assess the impact without full year figures but indications are that

high value sales are returning to previous levels. We are supportive

of the proposal to maintain the current rates and bands. We

recommend that the government conducts and publishes a review once

the figures for the first year of operation become available. This

will assist Parliament in its scrutiny of next year's proposals.

The committee takes 18 interest in the Scottish Fiscal Commission's

work. Discussions take place next week. I look forward to discussing

issues raised and do not intend to discuss the commission outlined

today but reiterate a recommendation that later acquire is needed on the

role of the commission and how it works in practice and how it was

agreed -- to agree the forecasting. We invited written evidence on how

successful the Scottish futures trust is. To improve the efficiency

by working collaboratively with public bodies and industry leading

to better value for money and public services. The overwhelming majority

of responses were positive and indicated a high level of regard for

the staff and collaborative approach. Suggestions were also made

and we look forward to hearing their views. Staying with capital

investment, the European system of accounts regulations which have led

to certain nonprofit distribution projects being reclassified as

public sector spending. ?398 million was allocated to cover projects and

full transparency is required particularly where it resulted to

the latest other investment projects. This is relevant to those

fiscal framework negotiations related to additional borrowing

powers and we would welcome an update. The committee continues to

scrutinise the government's commitment. While there is evidence

of progress the committee remains frustrated by the lack of evidence

of any large-scale shift towards prevention. We received 40 responses

to our calls for evidence of barriers including a lack of

to our calls for evidence of ownership among public sector

partners. If the shift does not take place we will have growing demands

for services against the backdrop of diminishing resources. The committee

would need to take further evidence on prevention before reporting

conclusions. The budget focused on accountability and processes. Many

other topics were also covered and I am sure will be raised later. I hope

to have given a flavour of the broad range of subjects considered by the

finance committee. I look forward to hearing from other members. Maximum

six minutes. The Deputy First Minister is fond of telling us the

extent to which he is a victim of so-called Tory austerity from

Westminster so I thought it would be useful to add buys were the total

budget stands in relation to previous years. The total budget for

2016-2017 will be higher in real terms than in every year of

devolution from 1999 until 2007, higher in each of the year 2011, 20

12-2013 and 2013-2014 and nearly ?400 million higher than the current

year. The Scottish Government will always complain they do not have

enough money and always put the blame at Westminster. The difference

in this budget is that the finance secretary couldn't make the choice

if he wished to increase taxation and chose not to do so -- could have

made the choice. In 1999 a fresh faced John Swinney was the architect

of the penny for Scotland campaign. It is with irony we are year and

that campaign has been taken up by Labour and the Liberal Democrats and

John Swinney is holding the line against increases in income tax. I

will not. He is right to do so. The members said no. People in Scotland

should not be more highly taxed than people in the rest of the UK.

Sometimes that was a lonely message to boot out but no more. It makes me

glad to hear these self-proclaimed social Democrats and political

progressives on the SNP benches arguing so vigorously and

passionately against increases in taxation. We on the Conservative

benches will stand shoulder to shoulder with the SNP in holding the

line against the tax grabbers on the Labour benches and the Liberal

Democrat benches who would punish Scottish families. We are happy to

be Better Together with the SNP, to coin a phrase. The SNP can hardly

complain about Tory austerity when they had the choice to do otherwise.

What this means is that in the coming election those who are

unionist and those who voted no in the referendum, there is only one

party which will protect their pockets and

party which will protect their that of the Scottish Conservatives.

-- and that is. Order. Willie rainy. Tax grabber. ?189 million in tax

cuts and spending increases. I can only see ?50 million worth of cuts

to the bus pass. Where has the rest of the money come from and how is he

going to be for it? He could have seen if he had studied it in detail,

?42 million behind projections they are, so we think some of the sons --

his sons are wrong. He will see that we have a package of proposals. I

will spell out in more detail by these are important. Our priority

should be the Scottish economy. A strong and vibrant economy is

essential for the benefit of the people of Scotland and for

generating the tax income the Scottish Government requires and

this will be important in the coming year and subsequent years as a

closer link between Scotland's economic performance and the

Scottish Government's tax take is established. We have proposed a

number of changes. We are concerned about the increase in nondomestic

rates with the doubling of a large domestic supplement to 2.6%. This

will hit many relatively modest businesses applying to properties

with erect a ball value of ?35,000 or more. The First Minister has told

she wishes to see Scotland become the most competitive part of the UK

in which to do business. Having a supplementary rate doubled that

payable south of the border lies in the face of this.

The Conservatives' Murdo Fraser there.

Negotiations are continuing between the Scottish and UK

governments in an effort to agree on the fiscal framework

The Chief Secretary to the Treasury, Greg Hands, has been giving evidence

to the Scottish Affairs Committee at Westminster this afternoon.

Put simply this means that neither Scotland or the rest of the UK

should be better or worse off as a result of the initial act of

devolution. Thereafter the Scottish Government should bear the fruit of

good policy decisions and the consequences of poor policy

decisions. David Porter has been following the story. Can you cast

any light, this is a complicated subject, on what he said which

eliminated what these discussions are about? You are right, these

discussions are very complicated and have had eight sets of talks. Greg

hands announced that he would be clearing his diary and going to

Edinburgh on Monday at the night session of talks to try to get a

deal which could go on longer than that. It underpins the way that

further devolution will work. To some extent it is more important in

financial and economic terms than a lot of what is in the Scotland bill

because it will help determine the financial mechanism that will decide

the amount of the block grant in future, how much Westminster will

send to Holyrood and how that could change over time. It is very

important and intricate. Where the difficulty seems to be and this

sticking point between the UK and Scottish governments is whether you

index linked in future the way that the payments will be made therefore

of the population did not grow as much in Scotland would Scotland be

disadvantaged by changes to the Barnett formula? Lots of clever

people with politicians have been trying to square the circle and have

not done it. The clock is ticking. They need to get agreement by the

end of next week. If not it could make it very hard see the Scottish

Government to get everything that needs to be done in time for the

Scottish elections and to get the Scotland bill on the statute. There

will be a lot of hard negotiating next week and if they get a deal it

will probably go down to the wire. from what was the tone of his

remarks? Did he say we could get this sorted out? He did tell

remarks? Did he say we could get committee that he believed they

could reach a deal, but he says there's got to be goodwill on both

sides. I spoke to him earlier this week after the discussions, a little

earlier in the week, at the Treasury. He sounded quite upbeat,

perhaps a little bit more upbeat in -- than John Swinney did when he

came out of the meeting, but in many ways, this is

came out of the meeting, but in many is turning into a game of poker,

where perhaps neither side wants to give all their ideas on what they

will will not talk about at the moment. Both sides are both saying

they refused to give a running commentary. I think both sides want

to get a deal on this one, but it has to be a deal that is good for

both Westminster and for Holyrood. And that might be easier said than

done. Banks David, we will let you get

back to your deckchair! Time for some final thoughts

from Andy Maciver. You don't want a situation where

Scotland was following through, whether Scottish Government starts

losing money, on the other hand you can't have a situation where the

Scottish have and make some policy decisions which adversely affect the

economy, and doesn't have to take responsibility for or that,

there effectively getting subsidy. This is wedded to detrimental clause

becomes difficult, and very difficult to meet. One of the

positives is that you can make the difficult to meet. One of the

outcome different from another part of the UK. It's difficult to make

that clause. I think there will be a deal, I don't think they'd seen in

anyone's interest for their not to be. David Bell, the Economist, who

dreams about this in his state, he argued in detail paper he's produced

for the Institute For Fiscal Studies that there is no way of meeting

everything because of no detriment? Yeah. I think there'll effectively

come out with something that has an outcome which is very similar to

Barnet. People are going to be exposed to the detail on this unless

they're going to search it out. There will be a big PR battle for

who wins. Has the SNP secured a great deal for Scotland? And if they

get something like the Barnett Formula, or better... How do you go

about indexing? And who takes responsibility for things going

wrong, things changing? On either side? One of the options that you do

for that extra part, the part decreasing the Barnett Formula

grants, how you get that top part is very similar to Barnet. So I think

the Scottish Government have it -- has its preferred model. I think

there would be something relatively similar in place to the Barnett

Formula. There are areas around the world's... In federal states, there

are still fiscal transfers, whereby the richer parts of the country

transfer money to poorer parts. Clearly, they'll be able to do it.

The tricky part, as David Bell and I say, is trying to meet the no

detriment clause, because it's hard to see how they would be detriment

from any settlement to Scotland are other parts of the UK that will

happen. Regarding the debate on tax, has it changed your mind any about

putting up taxes being a vote winner? I don't think so. The one

party in Scotland who knows how to win votes is the SNP. They haven't

raised taxes since they've been in Government, they've only raised land

building transaction tax which replaced Stan GT. The reason they

haven't done that is because they are not popular, and there's not

much evidence that they're actually necessary in Scotland, because

public services have continued reasonably well under austerity and

John Swinney thinks he can carry on doing that without raising taxes.

I'll be back with Sunday Politics Scotland, on Sunday at 11am.