IFS thinktank: SNP plans would prolong austerity

First Minister Nicola Sturgeon meets Andrew Clair on a campaign walkabout in Portobello. Picture: Andrew O'Brien
First Minister Nicola Sturgeon meets Andrew Clair on a campaign walkabout in Portobello. Picture: Andrew O'Brien
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BRITAIN’s leading economic thinktank has seriously undermined the SNP’s central election pitch that it will bring “an end to austerity” by warning that Nicola Sturgeon’s proposal to increase spending by £180 billion will mean “a longer period of austerity” for the UK.

The Institute for Fiscal Studies (IFS) also warned that SNP plans will mean less public spending in 2019/20 than planned by Labour in an analysis of all the main parties’ economic plans which was critical of the messages being given to voters.

There is a considerable disconnect between [the SNP’s] rhetoric and their stated plans for total spending, which imply a lower level of spending by 2019–20 than Labour’s plans

Institute of Fiscal Studies

The IFS also said that the SNP and Labour’s plans for reducing the deficit are “broadly the same” but said that SNP plans would mean a reduction of funding in Scotland.

The report attacks the main UK parties for not spelling out cuts and coming up with unproven figures on money that can supposedly be retrieved from clamping down on tax avoidance.

It is the second blow dealt to SNP plans by the IFS which earlier this week predicted a £10 billion spending black hole on Scotland with the Nationalist proposal for full fiscal autonomy.

The SNP have dismissed the report, claiming the thinktank has got its figures wrong and “made flawed assumptions.”

The report said: “The SNP’s fiscal numbers imply the same reduction in borrowing over the next parliament as Labour, although the reduction in borrowing under their plans would be slower.

“While their plans imply a slower pace of austerity than those of the other three parties, they imply a longer period of austerity.”

It also questioned Tory, Lib Dem and Labour proposals.

While it noted that the Conservatives are planning the largest reduction in borrowing over the next parliament, of 5.2 per cent of national income, to eliminate the deficit by 2018–19 “they would require some large spending cuts or tax increases to achieve this.”

It describes Labour’s plans as “vague” about extra borrowing.

The thinktank praised the Liberal Democrats for being “more transparent about their overall fiscal plans” through to 2017–18.

The report also commended the SNP for being “the one major party not to have used largely made up assumptions about how much they could raise from clamping down on tax avoidance to try to make their sums add up.”

But it was critical of the gap between the SNP rhetoric and its stated plans.

The report noted: “The SNP’s manifesto states that ‘we reject the current trajectory of spending, proposed by the UK government and the limited alternative proposed by the Labour Party’.

“There is a considerable disconnect between this rhetoric and their stated plans for total spending, which imply a lower level of spending by 2019–20 than Labour’s plans.”

Shadow Scottish Secretary and Scottish Labour Glasgow East candidate Margaret Curran said: “This is the day the SNP’s rhetoric collided with the reality.

“This revelation from the IFS exposes the true reality of the SNP’s plans. The independent experts at the IFS show clearly that the SNP will cut Scotland’s budget.

“For all the bombast and the bluster of the SNP it has now been conclusively shown that their anti-austerity posturing is nothing more than a front. Their plans would extend austerity and harm Scotland. And as is always the case the cuts would be felt by the poorest and most vulnerable in our communities. We cannot let that happen.”

She added: “The choice is now simple – continued austerity with the SNP, or an end to Tory austerity with Scottish Labour.”

However, the SNP attacked the IFS and pointed out that UK Labour leader Ed Miliband had claimed it had got its figures wrong over his party’s plans.

Scottish Lib Dem leader Willie Rennie said the report exposed the SNP as “austerity myth peddlers”.

He said: “The SNP said they would bring an end to austerity. This independent analysis shows it would be dragged out for longer, saddling the next generation with more debt.

“The SNP’s reckless borrowing plans would mean the SNP will spend more on debt interest and less on public services than the Liberal Democrats.”

In its response the SNP argued that the IFS has made “a flawed assumption” that the SNP would match Labour’s cuts to borrowing – when the SNP plans for 2019/20 would see borrowing at 1.6 per cent not 1.4 per cent as stated by the IFS.

The Nationalists also claimed that the IFS have not credited the SNP with any income from tax avoidance or from other tax increases although the party would largely mirror Labour tax increases and have made it clear they would support a tough crackdown on tax avoidance.

SNP Finance Secretary John Swinney said: “When Labour have publicly said they will introduce cuts across departments and have voted to meet Tory budget plans – claims they would spend more than the SNP are simply ludicrous.

“The reality is there are flaws in the IFS analysis of SNP plans. The IFS have assumed SNP borrowing would be the same as Labour’s borrowing in 2019/20. That is wrong.”

He went on: “SNP plans will see real terms increases in government spending, not cuts. We will protect the NHS and provide the support for those who need it.

“The only way to end austerity and to protect spending in Scotland is with a vote for the SNP and a strong team of MPs in Westminster.”