In March we learned from the IFS that the SNP’s plans for Full Fiscal Autonomy would cost Scotland £7.6b. The SNP dismissed this by claiming that the IFS analysis offered only a snapshot of Scotland’s position as it was based on one year of data. Not daunted by this, the IFS have now extended their analysis to 2020 (report, 22-04-15). This analysis demonstrated that the shortfall will grow from £7.6b to £10b – a total of £42.9b over 5 years.
To put this blackhole in context, the Tories plan £30b of cuts across the whole of the UK over the same 5 year period – £2.8b of which will fall in Scotland. The IFS say Labour need to cut UK spending by £6b if it chooses to balance the budget within three years, and that no cuts may be required in Scotland if it aims for 5 years.
It is therefore clear that the plan offered by the SNP is by far the greatest risk to public services in Scotland. Nicola Sturgeon’s response to this is to label the IFS report as “scaremongering” and to point out that Scotland could grow its way out of the blackhole. Unfortunately for Nicola Sturgeon, the IFS had anticipated that response – their analysis shows that 5% growth per year would be needed for the SNP to balance the books. This is double the UK growth rate and 4 times the EU growth rate.
The Nationalists are rather coy about how this level of growth can be achieved. However, if achieving 5% growth year-on-year was so easy, I am sure other countries would be doing it.