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Think tank warning over cuts triggered by Yes vote

MORE than a million extra immigrants over the next 50 years would not be enough to prevent spending cuts triggered by an independent Scotland's ageing population, an eminent economic think tank has warned.

debate: Alex Salmond and Cabinet colleagues took part in a question and answer session which included mail re-nationalisation.        Picture: Gordon Terris
debate: Alex Salmond and Cabinet colleagues took part in a question and answer session which included mail re-nationalisation. Picture: Gordon Terris

An influx of more than 1.3 million people, around twice the size of Glasgow, would still lead to reductions of around 3%, according to the Institute for Fiscal Studies (IFS).

The figures are based on "high immigration" projections, under which 26,000 people a year would come to Scotland, Gemma Tetlow, IFS programme director, told MPs on the Scottish Affairs Committee.

Pro-union campaigners said that the figures showed the high cost of independence.

The Scottish Government said that even the IFS accepted that the factors involved were "inherently uncertain".

A Better Together spokesman said: "This is the true cost of leaving the UK. While Alex Salmond is telling us that money will fall from the skies if we go it alone, all the impartial independent experts tell us the exact opposite."

Shadow pensions minister Gregg McClymont said: "Once again the universally respected and expert IFS have set the record straight. Sharing resources across the UK enables Scotland to meet the challenges of our ageing society efficiently and effectively.

"Separation offers a different reality: with fewer Scots of work-ing age population than the rest of the UK the IFS concludes that tax rises will be necessary. Scots are being offered a choice - believe the experts or believe Alex Salmond".

A Scottish Government spokes-man said: "As the IFS noted in earlier work, the factors involved in such forecasts are inherently uncertain and could evolve differently if Scotland were independent rather than part of the UK; in addition they could be substantially affected by the policies chosen by the government of an independent Scotland.

"Independence will provide opportunities to adopt different policies to ensure sustainable public services and higher economic growth, including a range of measures to grow Scot-land's working age population, for example by increasing the provision of child care, tackling inequality and attracting skilled workers."

The row came amid claims from a former director of the service that SNP plans to re-nation-alise Royal Mail after independence were "made up on the hoof".

Ian McKay, now chairman of the Institute of Directors in Scotland, called on the Scottish Government to provide clearer costs of the policy. He questioned whether the government of an independent Scotland would succeed in buying up the assets of the privatised company.

Speaking at a Q&A event with First Minister Mr Salmond and ministers in Edinburgh, the former director of Royal Mail Group in Scotland claimed business bodies felt "increasing frustration" at the lack of "proper answers" on key issues in the referendum debate.

He said: "It seems to us that increasingly there are answers being made on the hoof to make policies up, or wish-lists that are appearing, that tell us when we ask questions that it will be okay when we have independence, or okay from the other side because the UK is a big country."

The Scottish Government's independence White Paper, Scotland's Future, published a fortnight ago, includes a pledge to re-nationalise the Royal Mail.

Calling for clear costings of the move, Mr McKay added: "That's an interesting idea, particularly as to how one re-nationalises part of a company which is established by a stock exchange in a different sovereign state. There would be one or two other companies, large multinationals here in Scotland, who would be interested in the answer to that."

Mr Salmond said re- nationalising the postal service would benefit business. He said: "We will be enunciating the reasons for having key public services in public ownership, not least because of the supporting infrastructure it is for business, particularly in outlying areas."

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