SCOTTISH INDEPENDENCE: No vote will mean years of austerity - Swinney

cotland will face a new climate of austerity if there is a referendum No vote, MSPs were warned yesterday. Finance secretary John Swinney said all the main UK parties are signed up to further hardline spending cuts if voters reject independence in September’s vote. But pro-Union parties insisted leaving the UK would “impoverish” Scotland, with public services such as hospitals and schools suffering the brunt of a massive funding black hole.

The row comes in the same week that the Better Together parties signed a “joint guarantee” that Holyrood would get new powers in the event of a No vote.

Mr Swinney signalled earlier this week that he is ready to borrow billions of pounds after a Yes vote in order to avoid another climate of austerity. And he told MSPs in the Scottish Parliament yesterday: “It’s not if they decide to slash public expenditure in the future – the Labour Party and the Conservatives and the Liberals have all signed up to austerity to slash public expenditure in the United Kingdom.

“What will that do? As a consequence of the Barnett formula, it will reduce the block grant in Scotland and place further pressure on health and education.

“That’s the price of staying in the United Kingdom – we need to get out of austerity and we need to use the resources of Scotland for the maximum benefit of the people of our country.”

The finance secretary accused the pro-UK side of being obsessed with what Scotland “can’t do” in the referendum debate. The SNP government has set out plans to use the tax system after a Yes vote to improve country’s economy, with capital allowances being used to boost manufacturing, as well as measures to encourage smaller firms to export more to international markets. He added: “Scotland is capable of resolving these issues and determining a better future.” But Labour leader Johann Lamont said expert analysis shows an independent Scotland would face a deficit twice the rate of the UK by 2016 and this would have to be met by more borrowing, tax increases or spending cuts. She said her SNP opponents were living in a “fantasy world”, making pledges on public services which cannot be delivered. “Here is the central deceit at the heart of the Nationalists’ campaign for independence – their belief that the land of milk and honey is possible simply with a Yes vote,” she said. “Every day the SNP’s offer grows larger and larger, suspending the rule of arithmetic with every promise and pledge.” Ms Lamont continued: “If Scotland were to vote Yes, not only would the first government of this newly independent country not be able to deliver the litany of wonderful things Nicola Sturgeon and her colleagues promise every day, they wouldn’t even be able to deliver what we have now. “Rather than improving public services in an independent Scotland, they would be worse if we cut ties with the UK.” She added: “The truth of the matter is that the Nationalists think they will liberate Scotland, but instead they will impoverish Scotland. “Scotland’s public services face two futures in 2014. The future after a Yes vote where all the experts agree we will face renewed austerity over and above what we already face, and cuts to schools and hospitals as a consequence. Or we could face a different future if Scotland votes No.”

Tory finance spokesman Gavin Brown said SNP claims about the prosperity of an independent Scotland were based on overly optimistic forecasts of oil and gas revenues.

Scottish Government projections for the sector were £4 billion higher than those from the UK Office for Budget Responsibility, he said. Mr Brown said: “For John Swinney’s projections to come true we need oil to stay high every single day and we need production to remain high and not to go down. And they rely upon investment costs and production costs being lower than those that are projected.

“We need to roll a six with every roll of the dice on oil for John Swinney’s projections to come true.”

Liberal Democrat leader Willie Rennie said Holyrood is in line for more powers if Scots reject independence.

Mr Rennie said: “People need to know if they vote No in September they are not voting for more change but for more powers.”