The Institute for Fiscal Studies praised the commission, which was established by the SNP to make the economic case for Scottish independence following the Brexit vote, for accepting that Scotland’s public finances could be even more challenging after independence and setting out a plan to reduce the budget deficit.
But it warned that the proposals would mean “another decade of the sort of restraint on public spending that Scotland is currently experiencing”.
“If this is austerity, then austerity would be extended under the commission’s proposals,” said IFS associate director David Phillips, who carried out the analysis.
The commission claimed its proposals did not amount to austerity as public spending would be increasing in real terms, said Phillips.
“But [its] plans would mean spending on public services and benefits falling by 4% of GDP over the course of a decade,” he said.
“That’s on top of the reductions delivered and planned by the UK government for the decade from 2010 to 2020, and the commission’s proposals for immediate cuts to defence and other spending currently undertaken by the UK government.
“The ageing of the population – which adds to pressures on the health, social care and state pension budgets – means that keeping to an overall spending increase of just 0.5% a year would likely require cuts to many other public services.
“Unsurprisingly, the commission does not say where the axe would fall.”
But an SNP spokesperson said the commission had been “absolutely explicit” in its rejection of austerity.
“Instead it proposes real terms spending growth – including an economic stimulus package where necessary – a sharp contrast to the reality of Tory policies being imposed on Scotland,” he said.
“If the Growth Commission’s approach had been followed, the £2.6bn of cuts to the Scottish Government’s budget by Westminster would have been completely reversed, with the prospect of additional public spending beyond that.”
He added that the report had kick-started a serious and welcome debate about Scotland’s future. “The Growth Commission contrasts the clear opportunities of independence with the despair and economic damage of Brexit – and replaces fear with optimism and hope about Scotland’s future,” he said.
