Pensions bombshell

Tax hikes or spending cuts needed if Scotland quits UK, warns respected think-tank

Sturgeon’s bid to break up Britain was under fresh attack last night after experts warned an independent Scotland would struggle to fund state pensions.

In a highly damaging intervention, an influential economic research centre said tax rises or drastic cuts to public services would be needed to pay for pensions if Scotland left the UK.

The Institute for Fiscal Studies (IFS) warned that Westminster would never agree to continue funding Scottish pensions after independence, meaning the Scottish Government would face a massive funding gap.

Separately, age campaigners said the problems of funding a state pension in an independent Scotland have been magnified by the demographic changes since the last referendum.

In the run-up to the 2014 poll, the Yes campaign was weakened by claims pension income could not be guaranteed under independence. Age Scotland says Scotland has a rapidly ageing population, while the number of people of working age is declining.

Scots Tory constitution spokesman Donald Cameron said the comments highlighted the weakNICOLA ness of the case for independence, adding: ‘The IFS analysis underlines the huge budget problem at the heart of the SNP’s shaky pension claims.’

SNP Westminster leader Ian Blackford has previously said the UK Government has an obligation to fund state pensions in Scotland after independence.

But IFS deputy director Carl Emmerson said: ‘A solution where the Scottish pension population got to enjoy state pensions paid by our UK taxpayer is not going to happen.’

To pay for Scotland’s pensions, Mr Emmerson said: ‘There would have

‘Scotland has a rapidly ageing population’

to be spending cuts or tax rises. What they can’t do is claim it is not a problem because the UK Government will pay all our state pensions. I can’t see a world where that happens.’

Adam Stachura, head of policy at Age Scotland, said: ‘Scotland has a rapidly ageing population, at a faster rate than the rest of the UK. There will be more people who are less active in the labour market and contributing less to the tax base.’

A Scottish Government spokesman said: ‘The UK’s state pension provision is lower than many of our neighbours, and independence will give us the chance to ensure Scotland’s pensioners are properly provided for.’