Scottish election 2021: SNP, Scottish Labour and Scottish Conservatives’ manifestos are disconnected from ‘fiscal reality’, says IFS

The manifestos of Scotland’s three largest parties have a “disconnect from the fiscal reality the next Scottish Government is likely to face”, according to a scathing new report from the Institute for Fiscal Studies (IFS).

Researchers said while some loosening of the UK Government’s purse strings later this year was more likely than not, the SNP, Scottish Labour and the Scottish Conservatives shared a “lack of realism” over how they would pay for their manifesto spending commitments.

The IFS said the parties were failing to be honest with voters, and warned that Scots may see taxes rise – or other areas of the Scottish Government budget slashed – to pay for a myriad of policies pledged by all three, including promises to double the Scottish child payment, introduce universal free primary school meals, and increased free childcare.

The institute also accused the SNP and the Scottish Conservatives of “almost certainly” underestimating the cost of their biggest pledge – a promise to pass on to the Scottish NHS any funding received from Westminster as a result of increases in English NHS spending.

The IFS said real-terms increases in English NHS funding would have to “virtually grind to a halt” after 2024 for either party to meet its commitment, adding that it was “difficult to escape the conclusion the SNP and Scottish Conservatives had downplayed likely increases in how much they would need to allocate to the NHS, in order to flatter the amount available for their other myriad pledges”.

Researchers said Scottish Labour’s manifesto, meanwhile, simply did not provide figures for NHS funding – or indeed for anything – after 2022.

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‘No serious attempt to provide transparent costings’

They also criticised other un-costed pledges, including the SNP’s promise of an extra £800 million for social care; the Conservatives’ “poorly designed” funding guarantee for councils; and Labour’s promise to increase pay for care workers to £12 an hour immediately and to £15 an hour by the end of the Parliament.

David Phillips, associate director at the IFS, said: “Rising demand for, and costs of, health and social care could easily absorb three-quarters of the projected cash increase in the Scottish Government’s budget over the next few years, substantially more than the SNP and Conservatives have budgeted for.

“Scottish Labour have not even set out NHS spending plans beyond this year, but it is hard to imagine them spending less given their plans for a £15-an-hour minimum wage for care workers by the end of the parliament.

“Paying for the billions in additional pledges in these manifestos would therefore mean either increases in Scottish taxes or cuts to some other areas of spending, unless substantially more UK Government funding is forthcoming.

Shadow Scottish Secretary Ian Murray said: “We are glad the IFS have acknowledged the scale and ambition of our plans."

“It is also disappointing that, with the exception of the Scottish Conservatives, there is no serious attempt by the parties to provide transparent and comprehensive costings for their plans.

“And the Conservatives’ document underestimates the true cost of their flagship policy – the NHS ‘double lock’ – by at least £600m, or more than a quarter.”

Mr Phillips added: “If the hope was that fiscal devolution would improve the financial accountability of Scottish politics, the evidence of this election is that it a hope that has not yet been fulfilled.”

‘We cannot afford to be timid’

SNP Finance Secretary Kate Forbes said: "Only the SNP has a track record in office of using the Scottish Parliament's current financial powers."

Responding to the IFS’s criticism of Scottish Labour’s manifesto costing, shadow Scottish secretary Ian Murray said: “We are glad the IFS have acknowledged the scale and ambition of our plans. When we say Labour is focused on a national recovery, we mean it.

“The last year has seen considerable funds made available for the health crisis – we cannot afford to be timid in response.

“These plans are ambitious because of the scale of the task ahead.

“We funded our recovery plans within the best of our knowledge of the consequentials available.

“But, as with all of their budgetary processes, the SNP have not been fully transparent about what has been allocated already.

“As well as the current Covid-19 consequentials, the UK Government has a significant amount of funding in reserve, some of which we expect to come to Scotland for spending by the Scottish Government.

“We will ensure every penny is spent on supporting our communities, businesses and public services in recovery and not on more constitutional division.”

‘Greatest period of upheaval’

At the same time, SNP finance secretary Kate Forbes said: "Only the SNP has a track record in office of using the Scottish Parliament's current financial powers – and only the SNP has the serious plans required to drive the post-pandemic recovery which is needed.

“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.

“In every single year that the SNP has been in government, we have passed a balanced budget and that will continue to be the case.

"Overall, our proposed spending, including our significant new investment in our NHS, falls within the projections of the Scottish Government's Medium Term Financial Strategy published earlier this year, making our plans affordable even on relatively cautious estimates of future revenue.

“In backing our NHS and Care services with £2.5 billion of frontline NHS spending and an extra £800m of investment in social care, we can support recovery and transform our care services. Labour and the Tories’ plans fail the NHS and fail our care system.

"As well as the significant health, environment and social benefits our plans are designed to bring about, they will also generate increased economic activity through supporting businesses large and small and putting more money in the pockets of low income households, which will benefit public finances.”

The Scottish Conservatives have been approached for comment.

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