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Independence for Scotland would probably mean more, not less, austerity in short term, says IFS

There’s an interesting analysis of the SNP’s manifesto from the Institute of Fiscal Studies this morning. Writing in the Scotsman, the associate director of the IFS David Phillips notes the absence of costings from the document launched by Nicola Sturgeon in Glasgow last week, but suggests that this may be because the spending plans would necessitate more, not less, austerity for Scotland if it were to become independent.

Acknowledging that the manifesto “isn’t really about a plan of action for five years of governing the UK – rather it is about starting the process of leaving the UK in the next year”, Phillips points out that plans including increasing NHS spending across the UK by £136 per head to close the gap with Scotland would require significant outlay at a time when an independent Scotland was also starting out with a serious budget deficit.

Phillips adds:


Pursuing the types of policies suggested in the SNP manifesto in an independent Scotland would mean either those cuts would have to be even bigger, or other taxes would have to be increased to pay for the proposed net giveaways … in the short-term at least, independence would likely necessitate more not less austerity.

It should be noted that the IFS has already described both Labour and Conservative manifesto spending plans as “not credible”.

The SNP’s own growth commission report on the economics of independence accepted that a newly independent Scotland would have to cut spending significantly in order to manage its deficit.

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