The SNP is still trying to “scam” Scottish voters on the cost of independence – five years after their fantasy economics in the independence referendum were exposed, the Scottish Conservatives have said today.
It follows the publication of yesterday’s GERS figures which revealed that Scotland is currently running a £12.6bn a year deficit.
A major Oxford University report coinciding with the report has now found that, under the Nationalists’ new plan to pay for independence, Scotland “would quickly amass unsustainable levels of debt and the cost of servicing it would require large cuts in public services.”
Despite this, Nicola Sturgeon is expected to accelerate her bid for a second independence referendum, having said she wants to hold one as early as next year.
Murdo Fraser, Scottish Conservative Shadow Finance Secretary said:
“In 2014, Alex Salmond promised oil would pay for separation. Now everyone knows that’s nonsense, Nicola Sturgeon’s replacement plan is to break the bank and borrow billions to try and cover the cost.
“As this authoritative Oxford university study makes clear, it won’t. Instead, we’d have to slash spending on school, hospitals and the police.
“Five year on from the independence referendum, the SNP is still scamming voters with promises from the magic money tree. The cost for us all would be immense.
“Not only is the SNP failing to be straight with people, Nicola Sturgeon is now trying to ram through a second independence referendum as early as next year.
“She must listen for once – dump indyref2 and instead focus on getting Scotland’s economy back on track.”
Notes to editors:
The full Nuffield College report can be found here: https://www.nuffield.ox.ac.uk/media/3707/2019-05-arithmetic-and-independence-final-post-gers.pdf
“Scotland’s fiscal position, set out in GERS, presents a major challenge for the independence movement. Today, within the UK, Scotland is part of a fiscal union which regularly shares large proportions of its GDP to equalise tax resources and support at least common standards of welfare and public services. Scotland is unusual in that fiscal sharing system in that it receives large fiscal transfers not just to make up for what is now lower than average tax take but much higher than average spending, mainly due to the Barnett formula. Losing fiscal transfers of around 7% of GDP would be an immediate impact of independence.
“The SNP and Scottish government’s first response to this challenge, in 2013, was to hope oil revenues would grow to fill the gap. This was surely deliberate over-optimism, and came seriously unstuck when those revenues fell to zero in what was to have been the first year of independence.
“Their more recent approach, the Growth Commission, regards any oil revenues as a windfall to be set aside (which makes sense) and proposes instead to borrow heavily to make up for the immediate loss of UK fiscal transfers, and restrict the growth of public spending for a decade or more in the hope of reaching a sustainable fiscal position in time. This too suffers seriously from over-optimism. It pays no heed to the fiscal implications of the Commission’s own currency plan. It assumes that Scotland’s deficit will reduce markedly before independence. It also assumes that while Brexit is economically damaging to Scotland because of the barriers to trade with the EU it will create, independence will create no such barriers to trade with the UK (even though Scotland is inside the EU trading system). This is having your cake and eating it, which does not work for the UK and the EU and will not work for Scotland and the UK either.
“Any more realistic look at the Commission’s approach, starting from Scotland’s actual fiscal position, swiftly shows that the newly independent country would quickly amass unsustainable levels of debt, and the cost of servicing it would require large cuts in public services. This is hardly surprising: today’s relatively high spending is supported by large UK fiscal transfers, and to avoid cutting it large borrowing would be needed. That swiftly adds up to very large debt, which cannot be afforded. All this strategy would achieve is to delay the inevitable big cuts in spending until Scotland is heavily indebted and so has to make even more cuts. The price of over-optimism would be a very heavy one.”