Scottish independence: SNP ‘in denial’ - Osborne

GEORGE Osborne has challenged Alex Salmond to answer three questions about the economy of an independent Scotland as he accused the SNP leadership of being in “denial” with just weeks to go to the referendum vote.

George Osborne has called on the Scottish Government to provide more economic detail on its plans for independence. Picture: Getty

The Chancellor said questions on currency, the deficit and the impact of falling oil and gas revenues on the Scottish economy remain unanswered in his latest intervention in the referendum.

Mr Osborne stated that Scotland’s “economic security hangs on the answers” to these questions thanks to their influence over everything from mortgage and tax rates to spending on schools and hospitals.

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The Tory Cabinet minister claimed Mr Salmond’s “passion” for independence was blinding him to the risks posed to Scotland by his economic plans.

Mr Osborne’s latest remarks come after he ruled out the SNP’s plans for a currency union between an independent Scotland and the remainder of the UK earlier this year in one of the key flashpoints of the campaign so far.

The Chancellor yesterday repeated calls for Mr Salmond to clarify plans for the currency of an independent Scotland given the opposition of the main UK parties to a formal agreement to share the pound.

Mr Osborne said the First Minister’s plan to share the pound has been rejected by all three of the main UK parties because “it could never be made to work”.

He also highlighted the decision of the Office for Budget Responsibility (OBR) to revise down its North Sea oil forecasts, saying Scottish Government plans rested on a “volatile and declining” source of revenue.

Mr Osborne said that SNP proposals to boost spending and cut taxes do not add up in a country that would face a deficit around twice the size of the UK after independence.

He said: “These are questions that shape all our lives – they dictate our mortgage rates and tax bills; the quality of our schools and hospitals; the safety of our jobs and opportunities for our children. Our economic security hangs on the answers.

“Alex Salmond is proposing Scotland goes it alone. But he can’t tell people how public services will be funded, how Scotland will pay its way in the world, or even what currency people will be paid in. In his passion for independence, he is blinded to the risks to Scotland.

“He said the separatists ‘pretend to have all the answers’ but there are only three alternatives – adopting the euro, setting up a new currency and adopting sterling unilaterally in the same manner countries like Panama use the US dollar. We need to know, which is it going to be?”

He added: “The Scottish Government is in denial. It has overestimated oil revenues by £5 billion over the last two years.”

However, a spokeswoman for finance secretary John Swinney hit back and suggested the Chancellor was bluffing over his pledge to block a currency union in the event of a Yes vote.

She quoted figures which indicated an independent Scotland would be wealthier per head than France or Japan and would start life with debt being a lower proportion of GDP than in the rest of the UK.

The spokeswoman said: “It is no surprise the UK government talks down oil revenues when even they admit that their policies have damaged the North Sea and discouraged investment.

“An independent Scotland would be one of the wealthiest countries in the OECD, and as recent figures show, wealthier per head than France, Japan or the rest of the UK. And as George Osborne knows, a UK government minister has already accepted that a currency union will be agreed because it is in the best interests of the rest of the UK’s economy as well as Scotland.

“An independent Scotland would start life with the ability to invest in creating a more prosperous Scotland at the same time as reducing the deficit instead of embarking on a reckless and dangerous £25 billion of cuts proposed by George Osborne and the No campaign.”