Alexander says windfall is ‘wishful thinking’

THE Chief Secretary to the Treasury has branded claims that Scots could net an “independence bonus” of £1,000 a year as “pure wishful thinking” at the same time as he has been challenged to set out potential cuts to public spending north of the Border if there is a No vote in September’s referendum.

Danny Alexander says claims of a £1,000 independence windfall for Scots are 'pure wishful thinking'. Picture: TSPL

Danny Alexander likened the Scottish Government to a “gambler trying to persuade us to bet the house on a six-horse accumulator” after it published a report which claimed that Scotland could be £5 billion a year better off 15 years after independence.

Meanwhile, Holyrood Finance Secretary John Swinney has pressed the senior Westminster politician on whether the system for allocating funds to the different parts of the United Kingdom would be changed if Scotland voted to stay in the UK.

Swinney fears that changing the Barnett Formula could lead to a £4bn cut in public spending in Scotland.

He said that the Liberal Democrat manifesto for the 2010 general election had proposed replacing this with a “new needs-based formula to be agreed by a Finance Commission of the Nations”, but added that Danny Alexander’s remarks earlier this week appeared to contradict this.

On a visit to Edinburgh to launch a Treasury paper which claimed everyone in Scotland could benefit from a £1,400 “UK dividend” if the country stayed in the United Kingdom, Alexander reportedly said no party in the UK was planning to change the Barnett Formula.

Swinney challenged him, asking the United Kingdom Government minister: “Why did you give that answer when you had full knowledge that your own party’s Home Rule and Community Rule Commission report (the Campbell Commission) says: ‘The Liberal Democrats have long believed that the Barnett Formula should be replaced by a genuineneeds-based assessment’?”

The Scottish Finance Secretary said that “many leading Liberal Democrats” had “long called for the Barnett Formula to be scrapped”.