Fallout from virus ‘is devastating blow’ to SNP’s economic plan
AN INDEPENDENT Scotland would face even greater financial woes as a result of the coronavirus crisis, according to leading economists.
The Institute for Fiscal Studies (IFS) warned the deficit would soar beyond the £11.2billion suggested by the SNP.
Today the Scottish Government will publish the latest report showing how every penny of public money is raised and spent.
The IFS claimed the Government Expenditure and Revenue Scotland (GERS) report will show an independent Scotland would face austerity. Last year, the figures showed the deficit had fallen to £12.6billion, 7 per cent of GDP, with former finance secretary Derek Mackay claiming that this helped build the case for leaving the UK.
However, this was seven times higher than the UK as a whole, which had a deficit of 1.1 per cent of its GDP in 2018-19.
With the Covid pandemic, which has led to businesses across Scotland entering ‘hibernation’, experts have warned of higher taxes or spending cuts.
IFS associate director David Phillips said the figures will likely show the deficit for an independent Scotland would exceed that suggested by the SNP’s Sustainable Growth Commission. Its report, published in 2018, was the Nationalists’ economic blueprint for separation.
‘The deficit would likely be higher than they assumed, Mr Phillips told the Scottish Sun. ‘This is partly due to the impact of Covid-19 and partly because even prior to the crisis the UK Government had released the purse strings.’
He added: ‘Addressing this bigger deficit would require greater tax rises and/or spending restraint – effectively austerity – or a strong uptick in growth.’
Scotland in Union chief executive Pamela Nash warned that leaving the UK would have ‘devastating’ consequences for schools and the NHS amid the pandemic.
She said: ‘The SNP’s blueprint for separation would cause economic hardship for families and wreck our hopes of economic recovery following Covid-19. The publication of this year’s GERS figures must come with some honesty from the SNP about how much it would cut from the health service and how much it would put taxes up by.
‘But rather than force deeper austerity on Scotland with separation, by remaining in the UK we can invest in jobs, education and the NHS. Scotland is better off in the UK.’
Scottish Tory finance spokesman Murdo Fraser said: ‘The SNP must admit an independent Scotland would have to impose draconian cuts on schools and hospitals.’
More than 900,000 Scots have been furloughed, with economic activity down by nearly a quarter.
Scotland in Union has said the SNP must be ‘honest’ about the economic outlook of an independent Scotland if Nicola Sturgeon does secure a second independence referendum.
Miss Sturgeon has said next year’s Holyrood election will be the biggest of our lifetime – and that independence will play a central role in the SNP campaign and manifesto.
SNP deputy leader Keith Brown said: ‘Every country has had to borrow substantially to combat the pandemic. However, Scotland is unique in that we do not ourselves have the power to borrow to meet the specific challenges we face – independence will give us those powers.’
Last week Michael Gove suggested Scots in the rest of the UK could be given a vote in any referendum.