From Wings Over Scotland with the bolded part being derived from The Telegraph, the great upstanding YES paper.
At this week’s First Minister’s Questions, Johann Lamont banged repeatedly on a drum that the Unionist parties never tire of thrashing like an Orangeman in marching season – the notion that an independent Scotland couldn’t afford to live as it does now and would have to raise taxes or cut public spending.
Over and over again Lamont demanded the First Minister say which he would do if Scotland voted Yes, implying the choice wouldn’t have to be made inside the Union:
“If Scotland were outside the United Kingdom, I ask again: how would the First Minister pay for that loss in revenue—by cutting services or by raising taxes?”
Ms Lamont’s colleague Gordon Brown, meanwhile, is about to embark on a tour of Scotland, flitting from city to town to village like some demonic ghostly apparation out of “Tam O’Shanter”, frightening Scots with blood-chilling tales of “black holes” and, most especially, unaffordable pensions.
Sounds like we better stay in the safety and security of the UK, then.
telegraphpensions
“Britain faces ‘crippling’ tax rises and spending cuts if it is to meet the needs of an ageing population, according to the Institute of Economic Affairs.
The IEA calculated the Government would need to slash spending by more than a quarter or impose significant tax hikes because official calculations had failed to factor in future pension and healthcare liabilities. ‘As populations age, tax bases will grow more slowly while government spending rises faster,’ its report said.
In a stark warning, the think-tank said Britain faced tax rises within just two years equivalent to more than 17pc of GDP – more than £300bn – in order to meet all future spending commitments. This is larger than the entire annual NHS budget and would increase taxes from 38pc to 55pc of national income.
Philip Booth, the IEA’s programme director, said tax increases of this magnitude would be ‘impossible’ to implement ‘without choking off economic growth and actually reducing tax revenues.’
‘The underlying problem is that successive governments have made promises which can simply not be honoured from the existing tax base. The electorate is grazing a fiscal commons at the expense of future generations,’ he said.”
Oops.
Gordon Brown knows all about pensions black holes. He created a massive £100bn one when he was Chancellor of the Exchequer in the first year of Tony Blair’s Labour government, with a “raid” on pension funds that Labour tried to bury in the small print of budget documents and then fought for years to prevent becoming public knowledge.
“In the end, those who would suffer most would be those not in a position to top up their pension contributions - namely, the lower-paid.”
Brown was also, of course, the Chancellor behind Labour’s infamous and insulting 75p pension increase in 1999, alongside his then Social Security Secretary Alistair Darling. It’s typical of the barefaced, contemptuous audacity of the No campaign that they of all people should now be lumbering around warning people over their pensions.
The £4bn gap in the Scottish budget so bemoaned by Johann Lamont on Thursday (a one-off caused by large investment offsetting taxable profits for a single year) is dwarfed by a permanent UK shortfall 75 TIMES BIGGER identified by the IEA. The Institute’s comments reveal the harsh reality of the matter – by far the biggest threat to the pensions and other welfare benefits of Scots is remaining in the UK.
Because Scotland at least has options. One, already sought by the SNP, is that by encouraging skilled immigration it can boost its tax base – immigrants tend to be young, hard-working people who pay taxes and then go back to their countries of origin before retirement, paying far more into the system than they take out.
With the powers of independence, Scotland could also rebalance and regenerate its economy in other ways in order to prevent the “brain drain” of talent which sees many of Scotland’s brightest and best young people head to England (and especially London and the south-east) through lack of opportunity at home, which is why Scotland’s population has grown by just 5% since World War 2 while England’s has soared by 40% in the same period.
(In fact this trend has reversed to some extent since the advent of devolution - though the figures don’t show key details like whether it might be young people leaving and retirees coming the other way. London’s population is disproportionately young.)
Neither of those steps are available to the UK. Firstly because UKIP drives the political agenda of both main parties, and secondly because there’s no great “brain drain” to reverse. Pretty much everyone who could possibly be in London is there already – the city is groaning at the seams, more crowded than it’s ever been – and as a world financial centre there’s basically nowhere bigger for people to emigrate to, so they don’t. Scotland has significant room for improvement. The UK doesn’t.
So we’ll be watching to see how prominently the IEA’s warning features in the Scottish media. We have the strangest premonition that the answer will be “not very”, and probably not at all in the context of independence.
Scotland’s papers have already studiously blanked one piece of major Yes-positive pensions news this month, and we strongly suspect that this rather inconvenient story will go the same way. Let’s see if they prove us wrong.
