Scotland should be handed economic freedom from the UK to allow Holyrood to bring an end to austerity cuts, MSPs were told today.
Deputy First Minister John Swinney said Holyrood should control “virtually all the taxes and spending” on public services and the welfare system as he set out the SNP’s plan for “full fiscal autonomy” today.
We seek the opportunity to try to shape a better future by obtaining the powers that would enable Scotland to build a stronger economy, a more productive economy and an economy that would enable us to deliver a level of economic performance which we would then be able to reinvest in the delivery of public services.John Swinney
Opponents accused him of “fantasy economics” and demanded the Scottish Government publish their calculations about the impact of their plans, amid fears it would result in a multi-billion pound black hole in the public finances.
The demand for full fiscal autonomy has been at the heart of the SNP’s plans since the referendum defeat and the prospect of the party holding the balance of power after the election means it could become a reality.
The Deputy First Minister insisted it would mean Scotland could deliver a “stronger economic performance” and face challenges like inequality which the UK system has failed to allow Holyrood to tackle.
“We have to do something differently,” Mr Swinney told MSPs told.
“We seek the opportunity to try to shape a better future by obtaining the powers that would enable Scotland to build a stronger economy, a more productive economy and an economy that would enable us to deliver a level of economic performance which we would then be able to reinvest in the delivery of public services.”
The Deputy First Minister told MSPs today that the SNP’s plans would see Scotland remain within the “fiscal and economic” framework.
Scotland’s output is already £1600 per head higher than the rest of the UK if North Sea revenues are included, MSPs were told, while Scots per head have generated more in taxes for the past 30 years than the UK as a whole.
And since the Scottish Parliament was set up, Scotland has seen exports increase and productivity has increased to the same level as the UK.
“To those who say we cannot possibly, in exercising distinctive responsibility, create a better level of economic performance, I just dispute that dismal assessment that is put forward,” Mr Swinney said.
“What fiscal autonomy enables us to do is take a different course of action.”
But a number of independent experts, like the Institute for Fiscal Studies, have suggested that Scotland could face a black hole in Scotland’s budget of up to £7-8 billion.
Tory finance spokesman Gavin Brown said this undermined SNP claims that it would result in an end to austerity.
“They’re not saying it might be round about the same, they’re not saying we would be slightly worse,” he said.
“They’re saying we will be so much better off there will be no requirement for any spending reductions whatsoever over the course of the next Parliament.
“They even have the audacity to suggest this would boost revenues available to spend by the Scottish Government.”
He said the SNP has “failed” to publish any figures setting out the impact of full fiscal autonomy on the public purse.
“The Government has a duty to publish these figures so that people can make their own decisions.”
Labour finance spokeswoman said recent revenue accounts published for 2013/14 would leave Scotland with a black hole of £4 billion in the country’s finances .This would rise to an estimated £6 billion the following year - and could go up to £7.6 billion after the oil slump is taken into account.
“You would either need to slash services or increase taxes by a huge amount to fill that gap,” he said.
This is about 60% of the NHS budget, or the entire schools budget, Ms Baillie added. Alternatively it would mean a tax hike of £1400 for every Scot.
She said the SNP had no answer about “what they would do to deal with that black hole.”
“There is a suggestion we can just grow ourselves out of that situation - that’s just fantasy economics.”