Fiscal framework: No agreement reached after latest crunch talks

New financial powers, including on tax and borrowing, are due to be handed to Holyrood

Crunch talks aimed at ending a dispute over the financial arrangements to accompany the Scotland Bill have broken up without agreement.

Deputy First Minister John Swinney and UK Treasury minister Greg Hands met in Edinburgh.

The row concerns how much should be cut from the block grant once Scotland gains new tax powers.

Both the Scottish government and the UK Treasury said they would continue to seek a solution.

'Fair agreement'

Speaking after the latest talks, Mr Hands said: "We discussed a number of issues, there are still a number of issues out there.

"I think we need to get a deal that is fair to tax payers in Scotland and fair to tax payers across the UK.

"That is one of the key considerations of the Smith agreement - tax payer fairness - and we need to make sure we can get a deal that both governments can sell to their parliaments as well."

Mr Swinney told BBC Scotland: "We are working very hard to try to secure an agreement but I don't think we should underestimate the scale of the issues that we have to overcome to secure that agreement.

"We want a position whereby the tax payers in Scotland and tax payers in the rest of the UK are no better and no worse off as a consequence of the devolution of these responsibilities."

He added: "I am not going to set any barriers in the way of getting an agreement. I am determined to get an agreement - but only one that is fair to Scotland."

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Scottish ministers had previously said they want a fiscal framework deal agreed this week so it can be scrutinised by Holyrood.

The breakthrough needed on the fiscal framework will underpin new powers for Holyrood.

It has been claimed the block grant ministers in Edinburgh get from the Treasury could be cut by £7bn if certain calculations are used.

But the UK government has insisted that a good deal is on the table.

On Sunday, Mr Swinney pledged that key documents used to agree any new funding deal for Scotland would be published for scrutiny.

Shadow Scottish Secretary, Labour MP Ian Murray, said it was "deeply disappointing" that a deal had not been reached.

He added: "Both John Swinney and Greg Hands need to clear their diaries until a deal is done. This deal is now all that stands between our politicians and the powers necessary to make Scotland fairer.

"We all agree on that - it's time to get on with it."