PM says Scotland needs to 'move towards us' on fiscal deal

David Cameron has urged the Scottish government to "move towards" his position on the fiscal framework for new devolved powers.

During weekly questions at Westminster Mr Cameron said "no one is keener on agreement" than he was.

But in a letter to Nicola Sturgeon, the PM said he was disappointed, adding that the Scottish government "need to be prepared to move towards us".

Finance Secretary John Swinney said he would not sign up to a "damaging" deal.

The Holyrood and Westminster governments are locked in talks over a financial deal to underpin new devolved powers.

• What is the fiscal framework and why does it matter?

• Why the deal matters to David Cameron - Brian Taylor's blog

Mr Cameron told MPs he was keen to complete the "very important piece of devolution" in a fair way for Scotland and the rest of the UK, after SNP group leader Angus Robertson warned that "time is running out" for a deal.

Talks over the fiscal framework have been going on for several months, and are yet to be resolved. The Scottish government is set to submit a further proposal.

Holyrood's devolution committee wants a quick conclusion to the matter so any deal can be discussed in the Scottish Parliament before it is dissolved on 23 March ahead of elections in May.

First Minister Nicola Sturgeon wrote to the prime minister earlier in the week outlining parts of the Scottish government's case over the "no detriment" principle.

The Smith Commission on further powers said any deal should not impact adversely on Scotland or the rest of the UK, but Ms Sturgeon said the Treasury seemed instead to be trying to decide "what level of detriment that Scotland should bear".

At prime minister's questions, Mr Robertson claimed the plans as they stand could cost Scotland £3bn, and said time was running out to deliver a fair deal.

Mr Cameron responded that the deal struck needed to be fair for taxpayers across the UK as well as north of the border.

Ms Sturgeon criticised the Treasury's approach to 'no detriment' in her letter to Mr Cameron

In his reply to Ms Sturgeon, Mr Cameron underlined his commitment to "securing an agreement between our governments", but warned that the Scottish government would need to be ready to compromise.

He said: "We have consistently listened to your concerns, put a number of alternatives on the table and moved substantially towards you; you will need also to be prepared to move towards us.

"In the interest of reaching an agreement, we tabled a significant new proposal that would see the Scottish government retain all growth in Scottish taxes plus a share of the growth in corresponding taxes from the rest of the UK."

Addressing the matters raised by Ms Sturgeon in her letter, Mr Cameron said: "We will not accept any proposals that would diverge systematically from the taxpayer fairness element of the Smith Agreement principle of 'no detriment'.

"It would be very difficult for me to explain to taxpayers in the rest of the UK that Scotland will stop paying income tax into the central pot yet somehow still receive a share of it."

Angus Robertson, the SNP leader at Westminster claimed "time is running out" for a deal

During prime minister's questions earlier in the day, Mr Cameron said he wanted to "successfully complete this very important piece of devolution in a fair way".

He said: "There's an ongoing negotiation to reach a fair settlement, and I would say to the Scottish first minister and the Scottish finance minister they have to recognise there has to be fairness across the rest of the UK too.

"With goodwill, I can tell you that no-one is keener on agreement than me.

"I want the SNP, here and in Holyrood, to have to start making decisions. Which taxes are you going to raise, what are you going to do with benefits?

"I want to get rid of this grievance agenda and let you get on with a governing agenda, so we can see what you're made of."

John Swinney said he was working hard to come to an agreement on the fiscal framework

Scottish Secretary David Mundell told MPs that the Scottish and UK governments are "within touching distance" of a fiscal framework deal.

Labour's Ian Murray had claimed that tennis star Andy Murray's newborn daughter could win Wimbledon before a deal is done.

However, Mr Mundell welcomed Ms Sturgeon's letter to Mr Cameron as good progress on the matter, saying: "We are within touching distance of striking a deal and I remain optimistic that we will do so."

'Difficult discussion'

During portfolio questions at Holyrood, Scottish finance secretary John Swinney said he remained "committed" to the discussions.

He said: "I don't think anyone could question the amount of time and energy and commitment I have put in to trying to resolve these questions.

"What I want to make clear is that we have a very difficult discussion to have to resolves the differences of opinion we have on the 'no detriment' principle.

"I am committed to continuing these discussions to come to an outcome which is fair to the people of Scotland, and fair to the people of the rest of the UK - which the no detriment principle is.

"What the Scottish government will not sign up to is a mechanism which is damaging to the people of Scotland."

A spokesman for Mr Swinney said Mr Cameron's letter was "deeply disappointing", saying it "completely fails to engage with the central point" of Ms Sturgeon's letter.

He said: "We will put a further proposal to the UK government this week that will meet in full the principles of the Smith Commission and which no government seeking to secure a deal based on the principles of Smith could reject.

"If the UK government is not able to reach an agreement which respects that core principle of no detriment, it would be crystal clear that they have no intention of honouring the Vow or the Smith Commission. We sincerely hope that's not the case."