Nicola Sturgeon writes to David Cameron calling for a common understanding of the Smith Commission’s no detriment principles

The First Minister has written to Prime Minister David Cameron in an effort to move forward with negotiations on the fiscal framework.

In her letter, Nicola Sturgeon says it is “vitally important” that the two governments have a shared interpretation of the key no detriment principles of the Smith Commission if they are to make progress on the fiscal framework.

Sturgeon reiterated that provided tax policy in Scotland remains the same as the rest of the UK and Scotland’s economic performance is in line with the UK’s, Scotland should be no better or worse off than under current funding arrangements and neither should the rest of the UK.

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“I do not think there is any ambiguity whatsoever in what the Smith Commission said about these vitally important issues,” she writes.

It comes as Finance Secretary John Swinney pushes back the 12 February deadline for completion of the deal.

She adds: “I want to make clear that we are prepared to accept the responsibilities that the Smith Commission indicated should fall on Scotland, both the upside and the downside.

“If future Scottish governments decide to vary tax rates, or if our economic performance diverges from the rest of the UK, then the costs and benefits of those decisions and trends would fall on the Scottish budget.

“What we are not prepared to do is to accept risks which are not symmetrical, over which we have little influence and no control, and about which Smith made no recommendation.

“The UK Government’s proposals for adjusting the block grant would require Scotland to grow receipts from devolved taxes more rapidly than the corresponding receipts in the UK simply to ensure its budget was not reduced.

“This does not meet the Smith Commission’s no detriment principles.”

She adds that the Scottish Government could not accept the risk that Scottish funding might be reduced below what it would be under current funding arrangements simply as a result of different population growth when the Scotland Bill does not give the Scottish Parliament any powers that would allow it to increase the Scottish population.

The Scottish Government favours a per capita index method of calculating the block grant, which takes account of population fluctuations, while Treasury Secretary Greg Hands has said another, known as the ‘levels deduction’ mechanism, “best answers Smith in its entirety”.

Negotiations between the Scottish and UK governments on the fiscal framework are ongoing.

A decision on the fiscal framework had been expected by the end of this week, but in a letter to the Bruce Crawford MSP, convener of the Scottish Parliament’s Devolution (Further Powers) Committee, Finance Secretary John Swinney has asked for flexibility in relation to the timing of the fiscal framework scrutiny.

This will allow him to present “further proposals” to the UK Government later this week and continue negotiations beyond 12 February.