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You can find the current article at its original source at https://www.theguardian.com/politics/2018/jun/15/independent-scotland-austerity-snp-ifs-institute-fiscal-studies
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| Version 1 | Version 2 |
|---|---|
| Independent Scotland would face 'extended austerity' under SNP | Independent Scotland would face 'extended austerity' under SNP |
| (4 months later) | |
| An independent Scotland would face an extra 10 years of austerity if it implemented plans outlined by a Scottish National party report, the Institute for Fiscal Studies has warned. | An independent Scotland would face an extra 10 years of austerity if it implemented plans outlined by a Scottish National party report, the Institute for Fiscal Studies has warned. |
| The IFS, a highly regarded economics research institute, said proposals from the SNP’s growth commission published in May would leave Scotland’s weak public finances facing continued cost-cutting and restraint. | The IFS, a highly regarded economics research institute, said proposals from the SNP’s growth commission published in May would leave Scotland’s weak public finances facing continued cost-cutting and restraint. |
| Analysis by David Phillips, an IFS economist, said the commission should be commended for being honest about “the challenging public finance position an independent Scotland would start life with”. | Analysis by David Phillips, an IFS economist, said the commission should be commended for being honest about “the challenging public finance position an independent Scotland would start life with”. |
| However, he disputed its claims that its economic strategy would end austerity. Its analysis in fact implied cuts in spending and benefits equal to 4% of GDP over a 10-year period. | However, he disputed its claims that its economic strategy would end austerity. Its analysis in fact implied cuts in spending and benefits equal to 4% of GDP over a 10-year period. |
| “Their proposals imply another decade of the sort of restraint on public spending that Scotland is currently experiencing. If this is austerity, then austerity would be extended under the commission’s proposals,” he said. | “Their proposals imply another decade of the sort of restraint on public spending that Scotland is currently experiencing. If this is austerity, then austerity would be extended under the commission’s proposals,” he said. |
| His analysis was seized on by pro-UK opposition parties. Murdo Fraser, the Scottish Conservatives’ shadow finance secretary, said Sturgeon “should simply admit it: independence comes at a huge cost. Until she does, nobody should believe a word she says.” | His analysis was seized on by pro-UK opposition parties. Murdo Fraser, the Scottish Conservatives’ shadow finance secretary, said Sturgeon “should simply admit it: independence comes at a huge cost. Until she does, nobody should believe a word she says.” |
| Patrick Harvie, co-leader of the pro-independence Scottish Greens, said the IFS was right to challenge the SNP’s report. | Patrick Harvie, co-leader of the pro-independence Scottish Greens, said the IFS was right to challenge the SNP’s report. |
| “The compelling case for independence will be one which abandons rather than extends austerity economics,” he said. “Broadening the tax base to include both corporate profits and asset wealth will offer a better way forward.” | “The compelling case for independence will be one which abandons rather than extends austerity economics,” he said. “Broadening the tax base to include both corporate profits and asset wealth will offer a better way forward.” |
| The IFS’s conclusions will be seen as a challenge to Nicola Sturgeon, the first minister, who strongly defended the commission’s work at the SNP’s spring conference six days ago. | The IFS’s conclusions will be seen as a challenge to Nicola Sturgeon, the first minister, who strongly defended the commission’s work at the SNP’s spring conference six days ago. |
| An SNP spokesman rejected the IFS conclusions and insisted the commission had explicitly rejected further austerity and planned real-terms growth in spending. | An SNP spokesman rejected the IFS conclusions and insisted the commission had explicitly rejected further austerity and planned real-terms growth in spending. |
| “The growth commission contrasts the clear opportunities of independence with the despair and economic damage of Brexit – and replaces fear with optimism and hope about Scotland’s future,” he said. | “The growth commission contrasts the clear opportunities of independence with the despair and economic damage of Brexit – and replaces fear with optimism and hope about Scotland’s future,” he said. |
| Phillips said the most recent Scottish government spending and taxation data covering both devolved and UK public spending in Scotland meant the country currently had an effective budget deficit of 8.3%. | Phillips said the most recent Scottish government spending and taxation data covering both devolved and UK public spending in Scotland meant the country currently had an effective budget deficit of 8.3%. |
| The UK’s overall deficit, which included Scotland’s overspending, was 2.3% of UK GDP. That meant UK taxpayers were subsidising Scottish spending by about £1,750 per person, a “fiscal transfer” equivalent to 6% of Scottish GDP. Under the commission’s forecasts the deficit would be more than 7%. | The UK’s overall deficit, which included Scotland’s overspending, was 2.3% of UK GDP. That meant UK taxpayers were subsidising Scottish spending by about £1,750 per person, a “fiscal transfer” equivalent to 6% of Scottish GDP. Under the commission’s forecasts the deficit would be more than 7%. |
| He said the commission report was far more sober than the Scottish government’s previous claims before the 2014 independence referendum. The commission was right to ignore future oil revenues in its forecasts because they were finite, but that increased the pressures on spending. | He said the commission report was far more sober than the Scottish government’s previous claims before the 2014 independence referendum. The commission was right to ignore future oil revenues in its forecasts because they were finite, but that increased the pressures on spending. |
| He chastised the commission for failing to set out where cuts would fall or taking any account of the likely trade barriers that would affect trade with the rest of the UK if Scotland rejoined the EU after Brexit. | He chastised the commission for failing to set out where cuts would fall or taking any account of the likely trade barriers that would affect trade with the rest of the UK if Scotland rejoined the EU after Brexit. |
| Philips said he could quibble with other assumptions in its report but added that it did make sensible proposals on increasing productivity and increasing immigration, to counterbalance Scotland’s ageing population. | Philips said he could quibble with other assumptions in its report but added that it did make sensible proposals on increasing productivity and increasing immigration, to counterbalance Scotland’s ageing population. |
| His analysis was released soon after the Scottish and Welsh governments published a letter they had sent to Sajid Javid, the home secretary, complaining that the UK government had failed to consult them on his plans for allowing EU citizens to remain in the UK after Brexit. | His analysis was released soon after the Scottish and Welsh governments published a letter they had sent to Sajid Javid, the home secretary, complaining that the UK government had failed to consult them on his plans for allowing EU citizens to remain in the UK after Brexit. |
| Sturgeon called for immigration powers to be fully devolved to Scotland last weekend. She is worried that Scotland’s ageing population and weak birth rates are damaging the economy, and wants to boost immigration to help increase productivity. | Sturgeon called for immigration powers to be fully devolved to Scotland last weekend. She is worried that Scotland’s ageing population and weak birth rates are damaging the economy, and wants to boost immigration to help increase productivity. |
| Fiona Hyslop, the Scottish external affairs secretary, and Mark Drakeford, the Welsh finance secretary, asked for an urgent meeting with Javid. They added they remained “deeply troubled” that they had yet to see any details about the UK government’s new but much-delayed immigration bill. | Fiona Hyslop, the Scottish external affairs secretary, and Mark Drakeford, the Welsh finance secretary, asked for an urgent meeting with Javid. They added they remained “deeply troubled” that they had yet to see any details about the UK government’s new but much-delayed immigration bill. |
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