Salmond: Public spending to rise post-independence

ALEX Salmond has insisted public spending will rise in Scotland after independence, despite the emergence of a Scottish Government report which raised the prospect of widespread cuts.

The First Minister came under sustained attack over the economic viability of an independent Scotland from opposition leaders after the private document was leaked.

The paper, which was presented to the Scottish Cabinet by finance secretary John Swinney, warned that Scotland faces a £28 billion deficit in the coming years, blaming tumbling North Sea revenues for the bleak outlook.

The First Minister insisted that the estimates from the independent Office for Budget Responsibility (OBR) on which the report was based are wrong and unveiled plans to publish his own oil and gas figures.

But he was accused of attempting to “cook the books” by opposition MSPs.

Mr Salmond said the “detail of this document”, which was presented to Cabinet ministers last year, shows that from 2017-18 onwards, public spending is “expected to grow in line with the economy”.

He told MSPs yesterday this implies “real-terms growth in Scottish public spending of between 1.5 per cent and 2 per cent a year”. He added: “Real terms growth in public spending – translated by the Bitter [sic] Together campaign – Labour and their Tory allies – as being ‘cuts in public spending’.”

But Labour leader Johann Lamont said the “real deficit” for Scotland is between what SNP ministers are saying in public and then discussing in private.

“What in public the SNP claim is scaremongering, in private is the truth,” Ms Lamont said during First Minister’s Questions.

Liberal Democrat leader Willie Rennie said: “It’s only his Cabinet colleagues that get to know the truth about the real price of independence.”

Mr Salmond, a former oil economist who created the RBS oil index in the 1980s, told MSPs that the Scottish Government is to produce its own North Sea figures.

A spokesman for the First Minister yesterday pointed to the OBR’s $92-a-barrel estimate for the price of oil by 2017 and compared this with the Department of Energy and Climate Change which put the figure at $130 and the OECD which has this at $150.

“Other agencies are predicting much higher,” he said. “We will be publishing soon an oil projection paper.”

The decision to produce the oil figures “pre-dates” the Cabinet leak earlier this week and will be carried out by Scottish Government officials, he said. The SNP government also points to the recent report by industry body Oil and Gas UK which says that investments in the past couple of years alone will generate extra tax revenues of £3 billion by 2017.

Mr Salmond said a new wave of investment in the North Sea will spur Scottish growth for decades to come.

A key question for Scots in next year’s referendum, he said, is which exchequer will benefit from these revenues. “For 40 years we’ve had Tory politicians telling us that North Sea oil and gas is running out. We now have the evidence that the next 40 years will have greater value than the last.

“What we’re going to make sure is, having London had its turn for the last 40 years, the next 40 years will be Scotland’s turn.”

Labour’s Richard Baker accused the SNP of trying to “cook the books for the public”.

Tory leader Ruth Davidson said: “Alex Salmond is arrogant to think that figures he makes up to suit his own political agenda will carry more weight with the industry.”

The Scottish Government is also to carry out detailed work on the provision of state pensions and welfare benefits after the leaked report raised the prospect of cuts to these after independence.