Scottish election 2021: Nicola Sturgeon rejects IFS report on manifesto and independence

Nicola Sturgeon has rejected an economic report that criticised her party’s manifesto spending pledges and predicted an independent Scotland would start with a higher deficit than the rest of the UK.

The Institute for Fiscal Studies (IFS) said there was a lack of transparency on the SNP costings, particularly on Covid recovery spending, in its election campaign.

The think-tank also reported that as Scotland's underlying fiscal position had been "relatively weaker than the UK as a whole" since the fall in oil prices in the mid 2010s, an independent Scotland would have a budget deficit "substantially higher than the rest of the UK", leading to difficult choices.

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Speaking to reporters, Ms Sturgeon said while the IFS was a “respected organisation”, she was “confident in the commitments” her party had put forward in its manifesto.

First Minister Nicola Sturgeon has a coffee during a visit to North Berwick, on the campaign trail for the Scottish Parliamentary election.

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And while she admitted the previous economic case for independence in the SNP’s Growth Commission was “no longer current”, she rejected the suggestion that a deficit would lead to austerity.

“Pretty much every country in the developed world has a massive deficit right now and are shouldering massive debts,” she said.

“The UK deficit is more than £300 billion, roughly 15 per cent of GDP. The UK debt is in excess of two trillion pounds.

"So as countries have, rightly in my view, borrowed to sustain businesses and individuals during the pandemic, debts and deficits have increased. So Scotland, if it were independent right now, would not be in a materially different position to countries the world over.

"There are no credible economists suggesting the way to deal with those situations is to impose austerity or cuts, so I don’t think it’s credible to suggest that an independent Scotland would be in a uniquely different position.”

Ms Sturgeon added: “We would manage a deficit in the way other countries manage deficits, through a combination of careful spending decisions and borrowing in a way that’s consistent with supporting the economy and people, and to bring debt and deficit back to reasonable levels.

“Many people have taken the deficit relative to the UK as a whole. I think that’s mistaken.

"Scotland’s fiscal position is a reflection of our position in the UK, not of the decisions an independent Scotland would take.”

On the claim by the IFS that her party’s manifesto spending pledges were not transparent or credible, she said the commitments she had made would not “require cuts or tax rises”.

Stressing the plans were based on the Scottish Government's medium-term financial strategy, Ms Sturgeon said the commitments came in about £500 million below the central forecast.

Ms Sturgeon said: "I would argue in a climate where we need to see stimulus in our economy, that is a cautious basis on which to base our commitments.

“I am confident in the commitments we have made and on the projections they are based upon."

She said she would not “quibble” with the IFS, but “we're confident in the robustness of our costings”.

"We’ve come in below that central scenario,” she said. “If we had gone with the highest scenario, that would not have been prudent in the current circumstances, but nor do I think it would be right to go down to the low scenario.

"I think we’re being cautious and prudent in how we approach this and we’ve got 14 years of experience of balancing the budget and making sure the priorities we identify are funded in the budgets that we set.”

SNP finance secretary Kate Forbes also challenged the IFS report. She said her party was the only one putting forward a "serious" plan for a post-pandemic recovery.

Ms Forbes said: "This is the greatest period of upheaval seen in our society and our economy since the Second World War – and the economic response must be every bit as ambitious if we are to build a fair and sustainable recovery.”

Asked about why there was no new economic case for independence to put to voters, Ms Sturgeon said: “When Covid struck last year I said we were putting plans for an independence referendum on hold, that we weren’t going to spend effort on preparing for an independence referendum because we would focus 100 per cent on the pandemic.

"The people who moan, wrongly, that I spend time on an independence referendum are now criticising that we haven’t spent the last year doing modelling.

“We haven’t done it because we have been focusing on steering the country through a pandemic, and secondly for that kind of information to be relevant it has to be up to date. When we have made our plans around the timing of a referendum, then we will do that and put that work before the Scottish people.”

She also insisted that Scottish independence would lead to more jobs being created if the country rejoined the EU as she faced more questions about comments made by SNP candidate Emma Harper, who claimed "jobs can be created if a border is created".

“As a general issue, it’s [the border] a question people have about independence,” she said.

“I don’t want any trade friction between Scotland and England or vice versa and we would work to avoid that.

“I don’t want to see barriers to trade in any way, but if Scotland is in the future to be back in the EU single market, then I do think its credible and highly likely to make us a more attractive place for inward investment, and that would create jobs. That would be the advantage of being in the single market.

"There is a lot of benefit that lies waiting to be grasped by a Scotland that is back in the EU."

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