• Text size      
  • Send this article to a friend
  • Print this article

Independent Scotland 'would need one million immigrants'

AN independent Scotland would need almost one million immigrants by the middle of the century to boost the workforce and defuse its pensions time bomb, the Shadow Pensions Minister has warned.

claims: Shadow Pensions Minister Gregg McClymont.
claims: Shadow Pensions Minister Gregg McClymont.

Scots Labour MP Gregg ­McClymont said such a rise would not be credible, leaving a tax hike or pensions cut as the only options.

The claim came as Gordon Brown again enters the referendum fray today. The former prime minister is to warn a go-it-alone Scotland would face a punitive £9 billion-plus pensions bill in the first year of independence, almost three times its projected income from North Sea oil. In a speech at Glasgow University, his first for Better Together, Mr Brown will insist pensioners are "better protected" when risks are pooled and UK resources shared.

He will warn an independent Scotland faces a £100bn public-sector pensions bill with an ­additional £1bn of administration costs for setting up a new system.

However, the SNP has hit back, with pensions spokewoman Eilidh Whiteford accusing the former Labour Prime Minister of scaremongering and "economic illiteracy". She said: "The reality is pensions are more affordable in Scotland than in the rest of the UK, a view supported by the National Institute of Economic and Social Research, who have also made clear that the demographic challenge is no more important to Scotland than it is to the rest of the UK."

Yet in a letter to First Minister Alex Salmond, Mr McClymont asks how an independent Scotland would manage the "higher risks and costs of separation", noting Scotland has more pensioners ­relative to people of working age than in England, with the gap expected to grow.

The Labour frontbencher points out that the Scottish Government paper on pensions published in September points to "controlled migration" as a means of filling the gap in worker numbers. He explains that the Commons Library, using modelling from the Office of National Statistics, suggests that for Scotland's working age population to grow at the same rate as that in the rest of the UK up to the middle of this century, "Scotland would need net immigration of more than 24,000 a year; this requires a net migration figure in excess of 936,000 by 2051".

The Cumbernauld MP adds: "Inward migration of almost one million people in a country with a current population of just over 5 million people is simply not credible. Without a credible plan for altering the dependency ratio, Scottish pensions would need to be funded by an increase in taxation or a cut to pensions."

In his latest contribution to the debate, Mr Brown will use unpublished official statistics to show how, currently, Scotland receives £9.6bn in pensioner benefits as part of the UK but would receive just £9.1bn on population share alone, ie if it were independent.

The latest prediction of North Sea oil and gas revenue for 2016/17 from the Office for Budget Responsibility, the independent UK Government forecaster, is £3.2bn.

The former PM will also ­emphasise that the number of ­Scottish pensioners is set to rise from 1 million to 1.3 million while the number of working-age people is due to increase more slowly than the rest of the UK.

While it currently costs the UK £1725 per head of the population for all pensioner benefits, Scotland receives £1805 per head; a gap of £80 per person that will rise to £120 over the next two decades.

The reason for the higher ­Scottish payout, according to Mr Brown, is that Scots benefit far more from UK-wide pension ­credits, worth £25 per week to the typical recipient, and Scottish pensioners also receive far more disability benefits - £1bn a year.

Contextual targeting label: 
Local government

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

228201