Devo Max will leave country £40billion short
SCOTLAND faces a £40billion financial black hole by the end of the next Holyrood parliament if the SNP wins its general election campaign for full fiscal autonomy within the UK.
The astonishing total is equivalent to around £8,000 for every man, woman and child north of the Border and comes over and above the existing UK National Debt, according to new figures released by HM Treasury.
Last night, First Minister Nicola Sturgeon was accused of “flying in the face of economic reality” by pushing for so-called devo max.
The debt bombshell comes as the SNP meet for a two-day pre-election rally in Glasgow, with party leaders set to reiterate their demand to keep all taxes raised in Scotland, including North Sea oil and gas revenues.
The impartial Treasury analysis examines the SNP’s fiscal autonomy plans, including a geographical share of oil revenues, as well as Scotland’s tax income and public spending.
The five-year figure is equivalent to more than three times the annual Scottish NHS budget and almost eight times the schools budget – leading to warnings of “severe cuts” to public services or massive tax rises.
Under the SNP proposals the Barnett Formula, which ensures a fair distribution of spending around the UK, would be scrapped.
However, the most recent Office for Budget Responsibility (OBR) forecasts suggest annual North Sea revenues are not expected to rise above £800million for the rest of the decade.
Oil and gas would need to generate around £8billion per year, ten times as much, to maintain current spending levels in Scotland under devo max.
These new figures back up what the majority of Scots have always suspected. That the SNP is so fixated on separation, it’s lost the plot on the economy.
According to the Treasury figures, Scotland faces a deficit of £7.7billion in the next financial year, with similar deficits each year until 2019/20, when it will reach £8.4billion.
Over the five years, the next Scottish Government would face a total funding gap of £39.6billion.
Last night Chief Treasury Secretary Danny Alexander MP said: “These new figures back up what the majority of Scots have always suspected.
That the SNP is so fixated on separation, it’s lost the plot on the economy.
Full fiscal autonomy would saddle us with a £40billion funding black hole.
And that black hole can only be filled by severe cuts to our schools and hospitals, or massive tax rises to plug the gap. This is not the SNP standing up for Scotland as they claim.
It’s the SNP flying in the face of economic reality.”
He added: “I’m now calling on the SNP leadership either to come clean and publish exactly what services they will cut and how much they will raise taxes to plug their funding black hole, or to acknowledge that their plan for full fiscal autonomy is fatally flawed and withdraw it.”
But SNP deputy leader and Treasury spokesman Stewart Hosie claimed Mr Alexander and the Liberal Democrats had no “credibility whatsoever” and that no one in Scotland “believes a word the Treasury says”.
He added: “The only risk to Scotland’s public finances and services are the cuts planned by all the Westminster parties.
And the key to our long-term economic success and ability to invest in our public services is giving Scotland the economic tools needed to grow our economy and boost revenues.”
