Labour: Devo-max would cost 138,000 Scottish jobs

Scottish Labour deputy leader Kezia Dugdale criticised the SNP during FMQs. Picture: Ian Rutherford

Scottish Labour deputy leader Kezia Dugdale attacked Nicola Sturgeon over her party’s “reckless plan for full fiscal autonomy”, with all powers over taxation and welfare devolved and the Scottish Parliament responsible for raising enough in taxes to cover all the money it spends.

Ms Dugdale made the claims just a day after official figures showed Scotland was £12.4 billion in the red for 2013-14 and has a higher budget deficit than the UK as a whole.

The SNP is set to use the General Election to campaign on a platform of devo-max, which would see all powers except defence and foreign affairs transferred to Holyrood.

Nationalist ministers want the package, which was rejected by the Smith Commission tasked with delivering more powers, to be in place by the end of the next Westminster parliament in 2020, the First Minister’s spokeswoman confirmed yesterday.

However, Ms Dugdale said the loss of the Barnett formula, which has led to public spending being typically higher north of the Border than in England, in favour of full fiscal autonomy would lead to unprecedented cuts to public services.

Ms Dugdale said a “Barnett bombshell” from the SNP would lead to £6.5bn worth of cuts, branding this “austerity on a scale never seen before in Scotland” with cuts more severe than those set out by the Conservative Chancellor George Osborne.

Labour stated that cutting public spending by £6.5bn – 5 per cent of GDP – would cost 138,000 jobs in Scotland, citing figures from the Scottish Parliament Information Centre.

However, Ms Sturgeon accused Ms Dugdale of “scaremongering” and insisted her party was the only one that could prevent more reductions in public spending. The First Minister said: “People in Scotland know that I and the SNP and the Scottish Government don’t propose cuts, we want to grow our economy so we can protect Scotland from Labour and Tory cuts.

“The only people proposing cuts are the Tories, the Liberals and the Labour Party.

“We know they want to impose more cuts on Scotland and the only way to stop that is to send SNP MPs to Westminster to force them into an alternative.”

Ms Dugdale said the devo-max plan would lead to “austerity max”, with deeper cuts to the NHS and the Welfare State than those she claimed the Conservatives would pursue.

She said: “That means massive spending cuts over and above what we would get from the Tories winning in May. Huge cuts to the budget for our NHS and our schools. It’s austerity on a scale never seen before in Scotland, it’s austerity max.”

She continued: “According to the SNP government’s own economic modelling, reducing government spending in Scotland by £6.5bn would mean a cut of around 5 per cent in our GDP.

“Forget the dry, theoretical numbers, that’s 138,000 Scottish jobs – that’s one in every 16 jobs. Thousands of families facing the prospect of being out of work and struggling to make ends meet. The cause of it would be the SNP’s reckless plans for full fiscal autonomy.

“After years of telling us only they stand up for Scotland, we now know the reality is different. Far from standing up for Scotland, isn’t it the case that the SNP’s Barnett bombshell would cost well over 100,000 Scottish jobs?”

However, Ms Sturgeon said the SNP wanted to “protect” Scotland from cuts, which she claimed Labour, the Tories and the Liberal Democrats wanted to make. The First Minister said the only way to stop increased austerity was to send nationalist MPs to Westminster in May’s General Election.

She claimed “never-ending” Westminster cuts would slash £14.5bn from the Scottish budget over the next five years as she accused Labour of siding with the Tories on the issue.

And she said the Barnett formula would “remain in place until such times as this parliament is in charge of our own fiscal and economic decisions”.