Another difficult deal

Scottish bank notes

It's all Brexit, isn't it? Well, no. Admittedly, there are one or two mildly entertaining votes due in the Commons tomorrow evening.

Whether they are meaningful will no doubt emerge in due course. The prospect of a further Meaningful vote on the deal itself (that capital letter matters) is currently pending the raft of divisions due tomorrow.

But there is more on the political horizon this week. The Scottish government will try on Thursday to secure stage one support in principle for its £34bn budget.

As the SNP currently lack a majority in parliament, they need a chum or chums. Perhaps they will seek advice from Theresa May on how to win over politicians from other parties. Then again.

Now, Scottish ministers have some helpful offers before them today. Both the Tories and the Lib Dems say they're willing to talk. About spending and tax rates. About the budget.

Just one thing. Derek Mackay, the Scottish finance secretary, would have to agree to abandon any prospect of an independence referendum for the remainder of this Holyrood parliament. That's not a problem, is it?

Well, of course, it is. Despite one or two mischievous suggestions that Nicola Sturgeon might find it rather handy to put her long-term aspirations on ice for a bit, while the constitutional crisis clarifies a little further.

Nah, it's a non-starter for the SNP to shelve its founding objective, albeit temporarily. The party's leaders need to enthuse their membership, not stun them into silence.

Further, the Tories and the Lib Dems know that fine well. Their offer is designed to depict the SNP as independence obsessed, rejecting potential deals on the budget which, in practical terms, might suit them better than the alternative.

Image caption The SNP are listening to Patrick Harvie, but will they thrash out a deal with the Greens?

And that alternative? Not Labour. Their objective has been to depict the SNP as pusillanimous on taxation.

Rather Derek Mackay is looking to the Greens. As he has done in previous budgets. And, as has happened prior to previous budget votes, the Greens are playing rough.

At the weekend, Patrick Harvie, the Green co-convener, said his party could not support the budget proposals as they stand. Too little, in particular, for local government.

Cue much eager talk of an early Holyrood election. I understand such talk although it is perhaps a little premature. The budget process deliberately allows for several attempts to carry the financial package.

After stage one, there comes stage two. And then? Ach, you're ahead of me there.

Taxing issues

But before that final stage three, there has to be a separate vote on a resolution enabling the proposed Scottish income tax rates and bands to be levied in the year ahead, 2019-20.

That's the Scottish Rate Resolution, or SRR (nothing to do with the old rates, it's the rate of income tax).

I'm reminded that parliament needs to pass this SRR in order to enable any Scottish tax to be raised in 2019/20. That is, to say the least, designed to concentrate minds somewhat. No vote, no tax.

If the SRR passes, but stage 3 then falls, the new rates and bands apply for the following tax year but the Scottish government would not be able to spend money on services above the limits set in the current year.

Image caption If the SRR doesn't pass, Holyrood can't collect income tax

So Derek Mackay is seeking a deal - with the Greens, with whomsoever - which covers all three stages of the Budget process, plus that crucial rate resolution.

How's that going? Not bad, in one respect. An outline deal has been reached on a key Green demand - which is for significant progress towards a substantial reform of local government finance.

That includes, I am told, "a host of things" - such as the prospect of a local tourist tax, a parking levy, etc.

It also includes, crucially, a pledge to legislate within the term of the present parliament for a revised form of council funding. The precise form yet to be determined.

Greens will look for a new system which places maximum autonomy in the hands of local authorities. Conservative critics will look out for anything which, from their standpoint, loads higher charges on working families. Derek Mackay will look, carefully.

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Media captionDerek Mackay announced his budget plans in December

But there is a second element to the Green demands. They want a substantial hike in the cash allocated to local authorities right now, for 2019-20. That's where the talks are stuck.

One source suggested to me that the Greens want an extra £300m directed to councils in order to alleviate the concerns which they have voiced about service cuts.

Talks have stalled, for now, as to other areas of the budget which might be scaled back in order to fund the cash for councils. Mr Mackay (and Nicola Sturgeon) have repeatedly stressed that there is no spare, unallocated cash. No sofa to raid.

The alternative, of course, is to hike income tax in Scotland. Mr Mackay is decidedly reluctant to do that. One, for fear of the potential impact on the economy at a time of general uncertainty. Two, for fear of the vote-winning opportunity arguably - I stress, arguably - thus granted to the Tories.

Which is where we are. For now, stuck. Do I think there will be a deal? Ultimately, I do. But it won't be easy. Brexit, anyone?

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