David Cameron is to press ahead with plans to give the Scottish parliament greater tax-raising and law-making powers after he held "positive and constructive" talks with the first minister, Alex Salmond, in Edinburgh yesterday.
The prime minister said that his government wanted a "fresh start" with Salmond's Scottish nationalist government in an attempt to rebuild trust in the Conservatives in Scotland and restore good relations between the Westminster and Holyrood parliaments.
He wanted to pursue a "respect agenda" with all the devolved administrations in Edinburgh, Cardiff and Belfast. That would mean Scottish ministers should appear before Commons committees, and he promised to address the parliament in Edinburgh every year, if invited.
"I want to see a real agenda of respect between our parliaments," he said. "Both because I think Scotland deserves that respect but also because I want to win that respect as prime minister of the UK. That was truly said and truly meant."
Cameron claimed his coalition had a stronger mandate in Scotland than the Scottish National party would admit. Although the Tories came fourth in Scotland, and have just one MP in Scotland, the Tory and Lib Dem votes combined were greater than the SNP vote when it won the Scottish parliament election in 2007.
He said that high on his agenda was to implement proposals from a cross-party commission last year to give Scotland greater financial powers, particularly control over income tax and other duties.
He also confirmed – in a move likely to cause friction and opposition within his own party – that the UK government would not impose any cuts on the Scottish government's £30bn-a-year block grant from the Treasury this year, despite his emergency budget in 50 days' time and £6bn in immediate spending cuts.
The Scottish parliament had already set and was implementing its budget for this year, he said. "We'd already agreed before the election that the Scottish administration could delay that process and stick to its original budget this year and that's a good example of the respect agenda in action," he said.
However, it is expected that cuts next year could be deeper as a result, Salmond later confirmed, increasing demands in Holyrood and Westminster for Scotland to have greater financial responsibility.
In a private meeting with Salmond and his finance secretary, John Swinney, Cameron also agreed to consider Salmond's demands for up to £700m in extra funding to be given to the Scottish parliament to increase economic investment.
Salmond said Cameron appeared most supportive of requests to release £170m in Scottish funds held by Ofgem from the fossil fuel levy – a request Labour repeatedly rejected. Salmond said he was struck by Cameron's willingness to listen to his case – a dramatic difference from the frequently hostile and dismissive attitude of the last prime minister, he said.
Their talks were "positive, constructive, detailed and substantive," Salmond said. "I prefer a 'respect agenda' to a 'disrespect agenda'." He added: "How we judge the outcome of that agenda will be based on the policy options the Westminster government pursues, not just the words."
Speaking to the media before he and the new Scottish secretary, Danny Alexander, met Salmond and Swinney, the prime minister said: "I believe, and Danny believes, that we should be pursuing the Calman agenda, and that that is a much greater degree of fiscal autonomy for Scotland."
The tax-raising powers were proposed by a commission headed by Sir Kenneth Calman and supported by the Tories, Lib Dems and Labour last year. Calman recommended the Scottish parliament be given the power to set its own income tax rates above 10p in the pound, as well as its own aggregates levy and stamp duty.
The commission said the Scottish government's £30bn-a-year block grant from the Treasury could then be cut by at least £5bn a year, making Holyrood responsible for its own spending. It also recommended giving Holyrood the power to set its own speed limits and drink-drive limits.
Salmond said Calman's precise proposals on income tax were now unworkable because of the new UK government's plans to abolish income tax for the first £10,000 of income. Tory officials confirmed this was accurate, and suggested it may take some time to investigate how the principle of Calman's proposals could be taken up. Treasury officials are known to have been very uncomfortable with allowing Scotland to set its own income tax rate.
The source said Treasury officials would have to "run the reality checks and financial checks, and make sure it does stack up". He added: "The Treasury will have to do some modelling. We take the Calman recommendations as a starting point, as the base line. But in terms of financial recommendations we need to do Treasury modelling, we have to make sure it's the right fit, that there's no unintended consequences, and that it's workable. But the commitment to implement Calman is absolute from both parties and it's in the coalition agreement."
David Cameron pictured here earlier in 2010

Newly-appointed UK Prime Minister David Cameron today travelled north to Scotland to meet with the country's First Minister, Alex Salmond, for the first time since the general election. According to ''The Scotsman'', around 200 noisy protesters greeted the new PM, forcing security staff to take him into the devolved parliament via a back door.

Cameron's Conservative Party have traditionally been unpopular in Scotland. They won just one out of 59 Scottish seats in the election, gaining around seventeen per cent of the vote. Prior to the meeting, Salmond told reporters he intended to press Cameron for greater Scottish financial independence from Westminster, including greater tax powers— something supported by the Liberal Democrats, the Conservatives' new coalition partners, and  the Lib Dem Scottish Secretary and on which Cameron has promised a cross-party commission. 
Alex Salmond shown here in 2008
Cameron had been seeking what he called a "fresh start" to restore ties between the parliaments at Westminster and Hollyrood. In addition to meeting the first minister, Cameron also met with the sixteen Conservatives currently sitting in the devolved Scottish Parliament. 

After the meeting, both Salmond and Cameron agreed that the conversation had been "positive and constructive" and Cameron pledged a mutual "respect agenda" which would see him address the devolved Scottish parliament every year if invited and, in return, MSPs would appear before Commons committees in Westminster.  

Cameron outlined part of his spending plans in preparation for an emergency budget, scheduled for fifty days after the election. He announced that no cuts would be made to the £30 billion annual budget for Scotland though that £6 billion in spending cuts would have to be made— something likely to cause controversy in Cameron's coalition government. However, both Cameron and Salmond anticipate that cuts may need to be made in subsequent years.

At a conference, Salmond said the talks had been "positive, constructive, detailed and substantive. I prefer a 'respect agenda' to a 'disrespect agenda'." He added that "how we judge the outcome of that agenda will be based on the policy options the Westminster government pursues, not just the words". At the same conference, Cameron told reporters "I believe, and Danny Alexander believes, that we should be pursuing the , and that that is a much greater degree of fiscal autonomy for Scotland."