The SNP manifesto calls for UK-wide spending plans to be topped up. This is to avoid the need to cut spending on unprotected areas; and to increase spending on, in particular, the NHS, working-age benefits, overseas aid and green investment. The party argues that the cost of this could be met by UK-wide tax rises, additional economic growth from the UK rejoining the EU in the coming parliament and additional borrowing.
However, in its call for Scottish independence, the SNP ignores the potential hit to economic growth from leaving the UK and the big fiscal challenges an independent Scotland would immediately have to confront.
The SNP suggests providing an additional £18 billion for “unprotected” UK government departmental budgets by 2028-29, to prevent real-terms cuts. This is within the range (£10 billion to £20 billion) that we have previously calculated that such departments would need to avoid cuts under existing spending totals.
The SNP wants the UK government to top up NHS spending in England by £6 billion to fund higher pay, and then by a further £10 billion from 2025-26. This would be on top of the 3.6 per cent real-terms increases we have previously estimated would be needed to meet NHS England’s long-term workforce plan and would be a genuinely significant funding boost.
The SNP says this would generate an extra £1.6 billion for the Scottish government, which it proposes to invest in the Scottish NHS. But because some of the increases in spending in the rest of the UK would be funded by income tax rises that wouldn’t apply in Scotland, the Scottish government’s own funding would not increase by as much as the SNP appears to assume.
The SNP also wants the next UK government to cancel the real-terms cuts to capital investment planned by the chancellor, Jeremy Hunt, and immediately invest at least £28 billion a year in the green economy. In practice, spending this additional investment well would require it to be done gradually.
In addition, there is a call for a £20 billion “essentials guarantee” in the benefit system, plus annual uplifts in support for housing costs and the abolition of the two-child limit in universal credit, which together would substantially boost spending on working-age benefits.
To help fund all this, the SNP proposes a range of tax rises at the UK level. The biggest would be income tax increases for higher-income individuals to match Scotland’s system, raising an estimated £16.5 billion in 2028-29. This would result in income tax for someone in England, Wales and Northern Ireland earning £50,000 a year rising by £1,600, while those earning £125,000 would see an increase of £5,200.
Finally, the SNP also proposes significant further tax devolution to Scotland, including full powers over income tax, as well as the devolution of national insurance, VAT and the power to levy windfall taxes on “excess” profits.
Devolving income tax on savings and dividends is a sensible idea, as is devolving national insurance contributions. However, devolving all income tax rules would add complexity for some taxpayers and the tax authorities. And VAT is a particularly tricky tax to devolve, potentially creating trade barriers between Scotland and the rest of the UK, with reforms to VAT in Scotland also complicating the system.
*David Phillips is an associate director at the Institute for Fiscal Studies and head of local and devolved finance*
No shit. If they were honest about the negatives of indy the movement would eat itself. So they just avoid the questions at best or lie at worst.
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The SNP manifesto calls for UK-wide spending plans to be topped up. This is to avoid the need to cut spending on unprotected areas; and to increase spending on, in particular, the NHS, working-age benefits, overseas aid and green investment. The party argues that the cost of this could be met by UK-wide tax rises, additional economic growth from the UK rejoining the EU in the coming parliament and additional borrowing.
However, in its call for Scottish independence, the SNP ignores the potential hit to economic growth from leaving the UK and the big fiscal challenges an independent Scotland would immediately have to confront.
The SNP suggests providing an additional £18 billion for “unprotected” UK government departmental budgets by 2028-29, to prevent real-terms cuts. This is within the range (£10 billion to £20 billion) that we have previously calculated that such departments would need to avoid cuts under existing spending totals.
The SNP wants the UK government to top up NHS spending in England by £6 billion to fund higher pay, and then by a further £10 billion from 2025-26. This would be on top of the 3.6 per cent real-terms increases we have previously estimated would be needed to meet NHS England’s long-term workforce plan and would be a genuinely significant funding boost.
The SNP says this would generate an extra £1.6 billion for the Scottish government, which it proposes to invest in the Scottish NHS. But because some of the increases in spending in the rest of the UK would be funded by income tax rises that wouldn’t apply in Scotland, the Scottish government’s own funding would not increase by as much as the SNP appears to assume.
The SNP also wants the next UK government to cancel the real-terms cuts to capital investment planned by the chancellor, Jeremy Hunt, and immediately invest at least £28 billion a year in the green economy. In practice, spending this additional investment well would require it to be done gradually.
In addition, there is a call for a £20 billion “essentials guarantee” in the benefit system, plus annual uplifts in support for housing costs and the abolition of the two-child limit in universal credit, which together would substantially boost spending on working-age benefits.
To help fund all this, the SNP proposes a range of tax rises at the UK level. The biggest would be income tax increases for higher-income individuals to match Scotland’s system, raising an estimated £16.5 billion in 2028-29. This would result in income tax for someone in England, Wales and Northern Ireland earning £50,000 a year rising by £1,600, while those earning £125,000 would see an increase of £5,200.
Finally, the SNP also proposes significant further tax devolution to Scotland, including full powers over income tax, as well as the devolution of national insurance, VAT and the power to levy windfall taxes on “excess” profits.
Devolving income tax on savings and dividends is a sensible idea, as is devolving national insurance contributions. However, devolving all income tax rules would add complexity for some taxpayers and the tax authorities. And VAT is a particularly tricky tax to devolve, potentially creating trade barriers between Scotland and the rest of the UK, with reforms to VAT in Scotland also complicating the system.
*David Phillips is an associate director at the Institute for Fiscal Studies and head of local and devolved finance*
No shit. If they were honest about the negatives of indy the movement would eat itself. So they just avoid the questions at best or lie at worst.