SNP manifesto ‘ignores cost of independence’

SNP leader John Swinney at the manifesto launch in Edinburgh, on Wednesday
SNP leader John Swinney at the manifesto launch in Edinburgh, on Wednesday - Jeff J Mitchell/Getty

The Scottish National Party’s sums for its general election promises have failed to add up after the party ignored the costs of independence, impartial economists have found.

The respected Institute for Fiscal Studies (IFS) said the Nationalists’ manifesto overestimated how much its proposed tax hikes would generate and called for UK spending plans to be “topped up”, in particular on the NHS, benefits, overseas aid and green energy.

In an initial analysis of the plan David Phillips, the think tank’s associate director, said the SNP argued the cost could be met by UK-wide tax rises, more borrowing and increased economic growth from the UK rejoining the EU.

But he said the SNP “ignores the potential hit to economic growth from leaving the UK, and the big fiscal challenges an independent Scotland would immediately have to confront”.

In addition, he said the Nationalists had botched their calculations for funding their keynote policy to hike NHS spending by £16 billion across the UK, generating £1.6 billion for Scotland.

Mr Phillips said the SNP proposed to fund some of the spending increase by hiking income tax in the rest of the UK, mirroring the rises they have already implemented north of the border.

But he said these new increases would not apply in Scotland so “the Scottish Government’s own funding would not increase by as much as the SNP appears to assume”.

The IFS verdict is particularly embarrassing for John Swinney as he has repeatedly cited the think tank’s criticisms of the Tory and Labour manifestos during the election campaign.

It was published shortly after Mr Swinney unveiled the manifesto. A summary of costings, which covered barely two pages, was published shortly afterwards and claimed to be based on “moderate estimates of revenue generation”.

The SNP manifesto urged the UK Government to match Scotland’s higher income tax rates, claiming this would generate around £16.5 billion more for the Treasury.

Tax revenue from rejoining the EU and the European single market would rise by £30 billion, the SNP claimed, while scrapping the Trident nuclear deterrent would save £6.5 billion.

Mr Phillips said the tax plan would see income tax bills in England, Wales and Northern Ireland surge by £1,600 per year for workers earning £50,000, while those earning £125,000 would see an increase of £5,200.

He said that “by far the biggest revenue raiser” was the UK rejoining the EU and that £30 billion would “not be an unreasonably high figure” for the economic boost.

But he noted this was “unlikely” to happen and that the SNP had failed to cost independence. The value of Scottish exports to the UK is three times that to the EU.

Although the SNP is proposing an upper limit on debt servicing costs, Mr Phillips said that “on their own figures” the SNP plans would lead to extra borrowing.

He warned that “spending on debt interest is already running at much higher levels than we have been accustomed to in recent decades, and the SNP plans would involve higher borrowing and public sector net debt rising as a share of national income for longer”.