A double dose of Deal or No Deal

Brian Taylor
Political editor, Scotland
@tannadiceladon Twitter

  • Published
Boris JohnsonImage source, Getty Images
Image caption,
Boris Johnson is bullish ahead of trade talks with the EU

Intriguing week anent fiscal matters. Firstly, the preamble to trade talks with the EU, now that the UK is no longer a member, as of Friday night.

Like two fighters at a weigh-in, the competing sides - for this is a competition - are sounding increasingly rumbustious about their rivals, at this early stage.

Boris Johnson declares that there is no need to follow or to match EU rules on trade in order to strike a deal with the EU.

Oh yes there is, says Michel Barnier for the EU. And, en passant, we'll be having reciprocal access to your fishing waters, merci bien.

Then, later this week, we will learn the details of the Scottish budget for the year ahead, covering both income tax and spending.

In practice, the two events are inter-related, not least because the Scottish Finance Secretary Derek Mackay stressed over the weekend that he viewed his budget - and the concomitant need for relative certainty - in the context of the continuing anxiety over Brexit.

Scottish government ministers say they want a role in the EU trade talks, because they will impact on Scotland and because some of the issues to be discussed will feature devolved powers.

Expect warm words from the UK about consultation. Do not expect all that much in the way of practical concessions of negotiating power, at least if the run-up to Brexit is any guide.

Image source, PA Media
Image caption,
UK fisheries minister George Eustice insists Scotland's fishing industry will benefit from Brexit

Scottish ministers will say that they are defending Scottish interests. UK ministers will think - but probably not say - that the EU trade talks are tough enough already without the complicating factor of an alternative, and rival, perspective.

At any rate, ministers and wider Scottish interests will watch carefully. Perhaps there will be a particular weather eye cast towards the fishing element of these talks.

Those with long memories will recall the private comment from an official in 1973, when the UK joined the Common Market in the first place, to the effect that the fishing fleet was "expendable" by comparison with the broader economy.

That would never happen again, would it?

Image source, PA Media
Image caption,
Will Derek Mackay reach out to the Scottish Greens or the Scottish Tories for a budget deal?

To the Budget then. We will get the details on Thursday. Derek Mackay is adamant that he will set out a full budget - including a break-down of allocations to individual local authorities - despite the fact that he won't know the UK financial framework because the Treasury Budget has been deferred until 11 March.

Already, the rival suggestions are coming in. Mr Mackay says he will provide a Green budget in line with the first minister's declaration of a climate emergency.

Not Green enough…..say the Greens. They want to see a much bigger shift to environmentalism and public transport, in particular, before they'll sign up to the Budget Bill in this Parliament of minorities; some big, some small.

The Tories have put forward suggestions - and insist they're potentially open to a deal. Mr Mackay might well be tempted, fiscally, were it not for the over-arching conflict about the constitution which will define most of the year ahead.

Could there still be an agreement? There could - although sources suggest a more likely option might be a situation where the Tories abstain.

Labour? Not looking likely partners. Quite apart from the ideological divide, Scottish government sources are none too impressed with Labour's offer which they characterise as strong on higher spending but light on ways of funding said projects.

Image source, Getty Images
Image caption,
In recent years the finance secretary has struck a budget deal with the Scottish Greens

Liberal Democrats? Not really a prospect, given their stand against cutting a deal with the party of independence.

So what do I expect on Thursday? Firstly, I reckon Mr Mackay will leave the five extant tax rates in Scotland pretty much alone.

He's signalled that he sees that structure as a constant. Of course, he may well alter the bands - the salary levels at which one enters a particular rate - but his objective will be to maintain what he calls a "progressive" approach, favouring low earners.

Tories say the overall package disadvantages Scotland by deterring investment. Mr Mackay says there's no evidence of that, insisting that his scheme is fairer.

On spending, he'll present his package as a fair allocation of available resources. But he would not be human - or a politician - if he did not also seek to deflate some bubbling controversies in this election year.

A 'short, tough fight'

So expect more for education - and for the NHS, including mental health. Expect more for police, lately a spending row. More for transport and tackling climate change, despite Green complaints that the package is likely to fall short.

And expect one more element. Mr Mackay will say that Brexit has created an atmosphere of uncertainty in Scotland and the wider UK. An atmosphere which has yet to be dispelled, despite the prime minister's election winning confidence.

So I reckon he'll say to other parties: this is it. This is the budget. There is no money down the back of a sofa. There's no time for protracted negotiations.

The alternative to his budget - or something very, very like it - would be a political crisis and the ending of the present Holyrood Parliament. Election anyone? Thought that might be the answer.

Do I think it will get to that? No. Do I think Mr Mackay will get his way entirely, at the first hurdle? Similarly, no. This could still be a fairly tough fight. Bruising, but short.