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| SNP fails to account for billions in welfare and pensions pledge, says IFS | |
| (35 minutes later) | |
| Nicola Sturgeon has failed to include billions of pounds of extra welfare and pensions costs in her plans to increase UK public spending by £165bn in the next parliament, the Institute for Fiscal Studies has said. | Nicola Sturgeon has failed to include billions of pounds of extra welfare and pensions costs in her plans to increase UK public spending by £165bn in the next parliament, the Institute for Fiscal Studies has said. |
| The IFS told the Guardian that key Scottish National party pledges, including freezing the state retirement age, increasing universal credit payments, scrapping the bedroom tax and retaining child benefit, are not covered in the first minister’s proposal to raise public spending across the UK by 0.5% a year. | The IFS told the Guardian that key Scottish National party pledges, including freezing the state retirement age, increasing universal credit payments, scrapping the bedroom tax and retaining child benefit, are not covered in the first minister’s proposal to raise public spending across the UK by 0.5% a year. |
| To pay for the list of promises would require cuts or tax rises of tens of billions of pounds a year if implemented UK-wide, increasing pressure on the SNP to detail the total costs of its pledges and how they affect its longer term deficit reduction target. | To pay for the list of promises would require cuts or tax rises of tens of billions of pounds a year if implemented UK-wide, increasing pressure on the SNP to detail the total costs of its pledges and how they affect its longer term deficit reduction target. |
| Gemma Tetlow, a senior IFS analyst, said Sturgeon’s £165bn pledge only covered day-to-day departmental spending on areas such as education, health or transport. | Gemma Tetlow, a senior IFS analyst, said Sturgeon’s £165bn pledge only covered day-to-day departmental spending on areas such as education, health or transport. |
| “Many of the other explicit policy objectives, such as anything on welfare and state pensions, lies outside [departmental spending] and thus would have to be funded separately,” she said. | “Many of the other explicit policy objectives, such as anything on welfare and state pensions, lies outside [departmental spending] and thus would have to be funded separately,” she said. |
| The SNP has yet to cost any of these pledges, increasing opposition attacks on its economic strategy. | The SNP has yet to cost any of these pledges, increasing opposition attacks on its economic strategy. |
| Kezia Dugdale, the Scottish Labour party’s deputy leader, said: “The SNP’s economic credibility is in tatters. It’s bad enough that the SNP have made billions of pounds of uncosted welfare spending promises without even a hint of how they would be paid for. | Kezia Dugdale, the Scottish Labour party’s deputy leader, said: “The SNP’s economic credibility is in tatters. It’s bad enough that the SNP have made billions of pounds of uncosted welfare spending promises without even a hint of how they would be paid for. |
| “What’s worse is that the SNP’s plan for full fiscal autonomy would break up the UK welfare state, would mean an extra £7.6bn of cuts for Scotland, and remove the safety net from underneath the most vulnerable people in Scotland. It’s a reckless plan that would be devastating for Scotland.” | “What’s worse is that the SNP’s plan for full fiscal autonomy would break up the UK welfare state, would mean an extra £7.6bn of cuts for Scotland, and remove the safety net from underneath the most vulnerable people in Scotland. It’s a reckless plan that would be devastating for Scotland.” |
| The fiscal analysis comes the day after Sturgeon recommitted her party to pursuing full tax, welfare and fiscal autonomy for Scotland within the UK. | The fiscal analysis comes the day after Sturgeon recommitted her party to pursuing full tax, welfare and fiscal autonomy for Scotland within the UK. |
| According to the Department for Work and Pensions, postponing an increase in the state retirement age from 66 to 67 would cost £6bn over eight years in Scotland, and £74bn for the UK as a whole. The loss in tax and national insurance payments from those pensioners not then working would be a further £11bn. | According to the Department for Work and Pensions, postponing an increase in the state retirement age from 66 to 67 would cost £6bn over eight years in Scotland, and £74bn for the UK as a whole. The loss in tax and national insurance payments from those pensioners not then working would be a further £11bn. |
| Abolishing the bedroom tax across the UK – a policy backed by Labour, the Lib Dems and the SNP – would cost £360m a year, rising in several years to £500m. The Tories are debating moving all child benefit payments into Universal Credit, which could save £4.8bn depending on what income cap is introduced. | Abolishing the bedroom tax across the UK – a policy backed by Labour, the Lib Dems and the SNP – would cost £360m a year, rising in several years to £500m. The Tories are debating moving all child benefit payments into Universal Credit, which could save £4.8bn depending on what income cap is introduced. |
| A separate analysis by the IFS has already concluded that Scotland would be left with a £7.6bn black hole in its finances if it pursued fiscal autonomy because falling oil revenues would leave the country with a tax shortfall. | A separate analysis by the IFS has already concluded that Scotland would be left with a £7.6bn black hole in its finances if it pursued fiscal autonomy because falling oil revenues would leave the country with a tax shortfall. |
| It remains unclear how Sturgeon could collaborate with other parties at Westminster to slowly cut the deficit and protect welfare spending across the UK, while pressing ahead with her quest for fiscal autonomy. | It remains unclear how Sturgeon could collaborate with other parties at Westminster to slowly cut the deficit and protect welfare spending across the UK, while pressing ahead with her quest for fiscal autonomy. |
| Sturgeon told a BBC debate on Wednesday night: “I don’t think it is any secret that I want Scotland to have as many powers over our own economy and our own fiscal levers as soon as possible. | Sturgeon told a BBC debate on Wednesday night: “I don’t think it is any secret that I want Scotland to have as many powers over our own economy and our own fiscal levers as soon as possible. |
| “As Scotland’s voice in the House of Commons, if the SNP is there in numbers we will be arguing for as many powers to come to Scotland as quickly as possible. I would like it as quickly as the other parties agree to give it.” | “As Scotland’s voice in the House of Commons, if the SNP is there in numbers we will be arguing for as many powers to come to Scotland as quickly as possible. I would like it as quickly as the other parties agree to give it.” |
| Meanwhile, Labour attacks intensified after the SNP minister Derek Mackay confirmed on BBC Radio 4’s Today programme that the Scottish government had accepted the forecast of a £7.6bn black hole. | Meanwhile, Labour attacks intensified after the SNP minister Derek Mackay confirmed on BBC Radio 4’s Today programme that the Scottish government had accepted the forecast of a £7.6bn black hole. |
| Mackay said: “I’m not challenging the work that the IFS has done,” before insisting that fiscal independence would allow the Scottish economy to grow fast enough to close the gap. | Mackay said: “I’m not challenging the work that the IFS has done,” before insisting that fiscal independence would allow the Scottish economy to grow fast enough to close the gap. |
| Paul Johnson, director of the IFS, told the same programme that moving Scotland out of the current UK-wide spending system “would leave Scotland with a much more substantial fiscal deficit, and it’s worth putting that in context: [in] the UK context, £7bn would translate into about £70bn, so it really is quite a substantial number.” | Paul Johnson, director of the IFS, told the same programme that moving Scotland out of the current UK-wide spending system “would leave Scotland with a much more substantial fiscal deficit, and it’s worth putting that in context: [in] the UK context, £7bn would translate into about £70bn, so it really is quite a substantial number.” |