20 YEARS OF MISERY
Gordon Brown on why SNP’s plans will leave Scotland debt and buried
With poverty levels rising and public services under pressure, Scotland desperately needs a leadership committed to fairness.
The SNP’s Growth Commission report set out arguments for how an independent Scotland could boost its economy.
But writing exclusively for the Sunday Mail, Gordon Brown explains why he believes the document’s own figures show Scots would suffer decades of crippling debt.
The former PM is today addressing a Drivers for Change conference in Edinburgh to promote Labour’s alternative plan for a more federal UK.
We must look after our poor children and hard-up pensioners.
Funds are constantly required for everything from schools to care. Affordable housing is a must. All of that is about social justice. Yet it will never happen if Scotland goes for independence.
The evidence is right there, in black and white. Incontrovertible proof. Independence means 20 years of debt misery – denying the NHS the resources it needs and underfunding the welfare state.
There can be no other conclusion following a close examination of the SNP’s latest blueprint for independence – the 354-page Growth Commission report, which was published last month then backed heavily by Nicola Sturgeon during her party’s conference in Aberdeen.
So confident were the Nationalists that this is a prospectus they would implement that the Scottish Government’s Finance Secretary was a member of the inquiry team.
The SNP must now be subjected to a summer of scrutiny on their abandonment of Scottish public services and social justice in their headlong rush to abandon the UK.
We should never forget the background. For years, the SNP have dined out on the myth that independence is the only route to a fair society. In recent years, buoyed by oil revenues, they’ve brashly declared there is nothing an independent Scotland could not offer. In 2014, in the referendum, they promised that, following independence, pensions would rise, the NHS and public services would be awash with money and poverty would be eradicated. Now we know that all these promises were simply not true. With new evidence of the start-up costs of an independent Scotland and its debt levels, we can see there is no additional money available to fund what the NHS, schools and pensions need.
Independence is not the route to social justice but the barrier to it.
Each year, an additional £10billion in debt would be added to our liabilities as, year after year, the SNP borrow more and more money to replace the fiscal support we currently receive through the UK-wide Barnett formula.
After 10 years of independence, Scotland will have a total debt of nearly £250billion – the £150billion or so of legacy debt from our share of UK debt and then new debt of £100billion.
If we accept the SNP’s own calculation of interest rates – 2.3 per cent – debt interest payments will rise to more than £ 6billion a year. That’s £2.3billion for the new debt and £ 3.8billion for the inherited debt.
But most economists would assess the interest-rate costs as much higher. Indeed, a footnote in the SNP’s report projects UK debt interest rates of 2.8 per cent – and Scotland would pay one per cent more as a new country, which would bring total debt interest payments to more than £7.5billion. That’s money spent on debt interest which is so huge that it is more than half the current budget of the NHS and nearly as much as we spend today on education. And the bills don’t end here. Every year during the 2030s – well into what the SNP would hope would be a second decade of independence – they’ll be adding another £7billion or more of debt a year. That will catapult total Scottish debt beyond £ 300billion by 2040, with total debt interest payments near to £10billion a year – money taken from the NHS and from schools and from pensions.
To go through a dismal 2020s under the SNP’s independence plan and then face the misery of the 2030s locked into and swamped by debt is too much to bear.
None of that new Scottish debt would need to be incurred if we stay inside the UK.
It doesn’t end there. Start-up costs, which they count at £ 450million, could be as high as £2billion if recent governmental modernisation projects are anything to go by.
To set up a social security system to cover about 15 per cent of social security spending, the UK Government are forking out £200million.
If that costs £200million, just think what it will cost to create embassies, consulates, new departments of state and new computer systems as well regulatory agencies such as a Scottish Currency Board.
When the SNP adopted their fourth currency proposal in recent times, they didn’t tell us that it involved huge bills, too. You have to provide for an insurance scheme for Scottish savers and to back the issuing of Scottish pound notes with sufficient reserves to cover them.
And if your banks are Scottish-owned – the SNP policy until now – you’d have to be ready to stand by them, no matter what you said in advance of a crisis.
Experts estimate that the cost of building reserves runs into billions.
The Scottish people do not need, nor deserve, decades of pain.
What we need is Labour’s bolder, federal-style home rule under which the Scottish Parliament has the powers to deliver social justice without losing the economic benefits of being part of the UK.