Independence: Swinney promises end to austerity

John Swinney will set out an alternative to Westminster's 'austerity agenda'. Picture: Lisa Ferguson

He insisted that spending on key public services like schools and hospitals would not be cut after a Yes vote as he set out the SNP government’s “different priorities” for Scotland on a visit to Dundee yesterday. But the claims were branded “gobbledygook” by opponents who pointed to “big holes” in the Nationalists’ economic blueprint for independence.

The worst of the UK austerity cuts are expected to hit Scotland in the next two years, biting even harder than the widespread reductions in public spending since the Conservative/Liberal Democrat coalition came to power in 2010.

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Mr Swinney set out plans yesterday to increase Scottish spending after a Yes vote by £1.2 billion in 2017-18, the second year of independence, and £2.4bn in 2018-19.

He has previously indicated that he could do this through additional borrowing.

“With the UK government set to implement £25bn of spending cuts after the next election, the ability to manage our economy and public finances in the best interests of Scotland is one of the key benefits independence can bring,” he said.

“Future Scottish governments would have the opportunity to match their spending and tax policies to the priorities of the people. With the powers of independence, we can ensure we use that wealth to boost the economy, create jobs and support public spending whilst reducing the deficit through faster economic growth and increased revenues, not spending cuts.”

He was in Dundee yesterday to review the progress of the city’s waterfront regeneration.

“Scotland is one of the wealthiest countries in the world, and we will start life as an independent nation with huge economic potential,” he added.

Scotland’s balance sheet is forecast to be broadly similar to the UK’s in the first year of independence and public sector debt will be falling as a share of GDP, Mr Swinney said.

This could mean greater spending on infrastructure as well as helping deliver the “transformational” policy on greater free childcare aimed at getting a generation of mothers back into the workplace.

At present, Scottish welfare spending will fall by about £6bn over the six years to 2015-16, a report published by the Scottish Government found.

The majority of this total reduction, nearly 70 per cent, is expected to be in the current financial year (2014-15) and next (2015-16), according to the report entitled UK Government cuts to welfare expenditure in Scotland – Budget 2014 update.

Scotland’s welfare bill in 2015-16 alone will be reduced by almost £2.5bn. The heaviest cuts are in the changes to how benefits are uprated, tax credits and child benefit.

But Lib Dem leader Willie Rennie said Nationalists are blinded to the “big holes” in the SNP’s plans for independence.

“The Scottish Government is telling people that their independence plans would see them borrow more to put into an oil fund whilst bringing down the deficit and cutting taxes,” he said.

“These gobbledygook plans would be thrown into more uncertainty given the unpredictable nature of oil receipts. People managing their own budgets know you can’t have it all ways. Why don’t the Nationalists?”

One of Alex Salmond’s economic advisers, Professor Andrew Hughes Hallet, recently produced figures suggesting that the Scottish Government’s oil revenue forecasts are out by around £2bn, leaving a shortfall.

Scottish Conservative finance spokesman Gavin Brown also criticised Mr Swinney’s proposals. He said: “This is the SNP outlining plans to borrow its way out a deficit. It’s starting to get worrying how regularly and casually the Scottish Government says it is going to borrow a billion here, a billion there, in the event of independence.”

The UK government has embarked on a widespread programme of cuts to the welfare state in an effort to drive down to the UK’s £114bn annual public spending deficit.

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