Miliband: I challenge the SNP to come clean on how they will fill £7.6bn full fiscal autonomy gap

With 27 days to go until the General Election, a poll today put support for Labour as being 24 points behind Nicola Sturgeon's SNP - a result which could see Mr Miliband's party almost wiped out north of the border.

In a bid to boost support in the country where Labour won 41 seats in the 2010 election, Mr Milliband and his shadow chancellor Ed Balls teamed up with Scottish Labour leader Jim Murphy to launch their strongest attack yet on the SNP.

But Ms Sturgeon dismissed them as "desperate", with the Scottish First Minister insisting that the only cuts people are facing are "the ones that the Tories are proposing and Labour are backing".

In a TV election debate earlier this week, the SNP leader had said her MPs at Westminster could vote for full fiscal autonomy for Scotland as early as next year

"I believe this is one of the most significant events of the campaign so far in Scotland," Mr Miliband said.

"Full fiscal autonomy will mean a £7.6 billion hole in Scotland's finances.

"Today I challenge Nicola Sturgeon and the SNP to say how they will fill this £7.6 billion gap.

"Which services will be cut? Which taxes will be raised? And what cuts will it mean for pensioners in Scotland when they are taken out of the UK pensions system?

"The SNP claim in this campaign to be proposing no reductions in spending but in fact they are planning dramatic reductions in spending. They must now come clean."

Mr Miliband pledged: "I will never sell Scotland short by signing up to the SNP's plans.

"I will never sell Britain short by abandoning the pooling and sharing of resources. Because this is a pooling and sharing of resources which benefits all parts of our country, because we look after each other and we know we can only tackle the problems our country faces across the whole of the United Kingdom."

He dismissed a series of opinion polls which have put Labour well behind the SNP, saying: "I've got an old-fashioned view, which is that nobody has voted in this election yet and people are still making up their minds.

"If people want to see the back of a Tory government - and lots of people in Scotland do - there's only one way of achieving that, there's only one way to see the back of a Tory government, and that's to vote Labour."

He added he would be campaigning north of the border "a lot during the rest of this campaign because this is of huge consequence to the people of Scotland and the people of the United Kingdom".

But Ms Sturgeon insisted Labour was "wrong" in its analysis.

"This is desperation on the part of the Labour Party," the SNP leader said during a campaign visit to Stirling.

"Instead of putting forward a positive case of their own, they are resorting to the same fears and smears that they resorted to during the referendum.

"The truth is, the only cuts on the horizon for Scotland are the ones that the Tories are proposing and Labour are backing."

But Mr Balls insisted a vote for the SNP was a "vote for continued Tory austerity" and added: "Only Labour in Scotland has a fully-funded plan to deliver social justice."

He said bringing in full fiscal autonomy would meaning "scrapping" the Barnett formula, which is used to distribute public funds throughout the UK,

With Labour saying cuts in spending and tax rises would be needed to plug the £7.6 billion spending gap, Mr Balls said this "would be hugely damaging for living standards and public services in Scotland".

He said: "The SNP try to argue they can make this up by increases in economic growth. But the SNP would need to literally double the growth rate in Scotland in the next five years to close that gap.

"Scottish GDP growth would need to be 5.3% a year. That's not just double the expected growth rate for the UK, it's double the global growth rate expected worldwide for all advanced countries.

"The sums don't add up."

The shadow chancellor continued: "The fact is that £7.6 billion gap would mean a 12% cut in spending here in Scotland. That would be a spending cut twice as big as the spending cuts Scotland has had to deal with in this parliament."

This could see spending on pensions in Scotland cut by £1 billion, Mr Balls claimed

"A million Scots whose state pension is currently guaranteed by the United Kingdom would see their pension cut, a cut of £18 a week, £940 a year on average, for a million Scottish pensioners," he stated.

"The SNP can't pretend there's some magic route out of this.

"It is not full fiscal autonomy with the SNP, it's full fiscal austerity if the SNP plans go ahead in the next parliament.

"The biggest lie in this general election is the claim the SNP are the anti-austerity party. We have made clear today with full fiscal autonomy, full fiscal austerity, the SNP are the extended austerity party in Scotland in the next parliament if they get their way."

Mr Murphy also warned of the impact of full fiscal autonomy on the elderly, saying it would mean Scotland was no longer part of the UK pensions system

"If Scotland removes itself from the UK tax system, we remove ourselves from the UK pensions system," he said.

"To suggest we can have full fiscal autonomy and the UK pension system is to suggest that English, Welsh and Northern Irish workers should continue to pay for Scottish pensions and Scottish pensioners, only stop ourselves contributing into the pooling and sharing of resources across the UK.

"That argument is to ask the rest of the UK to share the risk, while we refuse to share in the resource. Full fiscal autonomy abolishes the guarantee of the UK state pension here in Scotland."

Liberal Democrat deputy leader Sir Malcom Bruce also pressed the nationalists on the impact of changing the way the UK is funded.

Sir Malcolm, who was campaigning in Cupar, in North East Fife, said: "Nicola Sturgeon told us that SNP MPs would vote for full fiscal autonomy at the first opportunity. This could leave us facing a £7.6 billion funding black hole in year one of the new parliament. This is more than half the annual Scottish NHS budget.

"The SNP need to tell people what public services would be cut to balance the books under their plans. The SNP are veering away from a plan that has delivered 174,000 new jobs for Scotland and are putting the recovery at risk."

But Scottish Deputy First Minister John Swinney hit back, saying Labour's election campaign was now "becoming so desperate in Scotland that they are resorting to the same fears and smears that caused such a huge surge in the Yes vote during the referendum".

He said: "They have retreated into a fantasy bubble, hosting a press conference riddled with factual inaccuracies and inconsistencies.

"In reality, the only people who are proposing further austerity are Labour, the Tories and the Lib Dems. Labour MPs walked through the lobby with the Tories to vote for £30 billion of further cuts.

"The question Ed Balls and Ed Miliband should have answered while they were in Scotland was the extent to which they intend to cut Scotland's budget.

"Scotland's economy is strong - by 2020 our onshore revenues are expected to grow by £15 billion, and with more powers we could do even better. In two of the last four years, Scotland's deficit has been less than the UK's, and in each of the last 34 years Scotland has paid more tax per person than the rest of the UK.

"The whole purpose of fiscal autonomy is that it would give Scotland the powers to grow the economy - instead of the failure and cuts of successive Westminster governments - and obviously greater economic and welfare powers would be introduced over a period of time. The problem for Scotland is that Labour stands along with the Tories and Lib Dems in refusing to give Scotland the 'extensive new powers' vowed by the No campaign in the referendum.

"To fly into Scotland and frankly insult people's intelligence in this way simply underlines why voters have moved in their droves from Labour to the SNP - and why seven out of 10 Labour voters think Nicola Sturgeon is doing well as First Minister. And for Labour to return to their referendum scaremongering about pensions is nothing short of despicable."

Mr Swinney insisted: "A strong block of SNP MPs in the next parliament will hold a Labour government to a progressive agenda - ending austerity, restoring England's NHS to protect Scottish funding, and cancelling the £100 billion renewal of Trident."