Scotland's NHS is not better off with independence, says IFS

Scotland's NHS is not better off with independence, says IFS

Alex Salmond’s claims that being in the UK threatens the future ofScotland‘s health service suffered a major blow after Britain’s leading fiscal thinktank said the NHS was better protected within the union.

The Institute for Fiscal Studies also revealed that Salmond’s government was planning cuts in health spending even though NHS budgets are rising in England, directly challenging one of the yes campaign’s most successful arguments with voters.

The thinktank’s intervention came as Gordon Brown threatened to stand for election against the first minister unless Salmond withdrew his “lies” about threats to the NHS.

Prompting speculation he could stand for Holyrood in 2016, when he will be 65, Brown accused the first minister of using the NHS as a “Trojan horse” to promote independence. Brown declared: “I say to Mr Salmond himself: until today I am outside frontline politics.

“But if he continues to peddle this deception that the Scottish parliament – under his leadership – cannot do anything to improve the health service until he gets a separate state then I will want to join [Scottish Labour leader] Johann Lamont in fighting him and securing the return of a Labour government.”

The former prime minister’s furious intervention at a Labour party anti-independence rally in Kilmarnock came as the IFS published a new analysis which showed the Scottish government planned to cut NHS funding by 1.2% in 2015-16. In England, it said, health spending was due to increase by 4.4% in the same year despite an overall public spending cut of 13%. But partly thanks to that increase in English health spending the cuts to Scotland’s overall budget would be lower than the rest of the UK, at 8.4%.

The IFS said it had published its analysis because Scottish ministers had made cuts in NHS funding a major plank of the pro-independence campaign. But its analysis showed that compared to the financial risks of independence, Scotland was better off with its spending protected under devolution.

“In the short term, it is hard to see how independence could allow Scotland to spend more on the NHS than would be possible within a union where it will have significant tax-raising powers and considerable say over spending priorities,” the IFS said.

Paul Johnson, the institute’s director, said Scotland’s overall Treasury budget would be cut by about 10.5% in real terms if the UK government’s austerity programme continued as planned – as Salmond has repeatedly warned. But that was less than the rest of the UK would suffer because Scotland has some protection under the Barnett formula.

If there was a no vote in the referendum, the Scottish government would be able to raise income tax under its new powers coming into effect in 2016. A 1% rise would boost NHS spending by about 4%, the IFS said.

Alex Neil, the Scottish health secretary, did not challenge the figures but said the IFS had also warned that continued UK government cuts could make it harder for health spending to be protected in either Scotland or the rest of the UK, unless “the cuts to other unprotected areas … [were] very large”.

Neil added: “The no campaign’s answer to Westminster cuts is to increase tax in Scotland. Why should hard-working families in Scotland be forced to pay for the cuts to public spending from a government they did not elect?

The IFS said that while independence would give the Scottish government more freedom to decide its budgets and spending priorities, and to borrow money, that freedom would be dictated by how much debt it had to pay off and how cheaply it could borrow money.

The thinktank said it believed Scotland faced a deficit of 2.9% in 2018-19 even if it followed current UK government tax and spending plans, forcing it to cut spending deeper or raise taxes more. “On most plausible scenarios it is hard to see how an independent Scotland could ‘end austerity’ in the short run,” it said.

Neil said independence would give Scotland far more flexibility to cope with those challenges. “With independence we can end austerity and use the vast wealth of Scotland to support our vital public services, like the NHS, rather than just try to mitigate the impact of the damaging decisions of Westminster.”


Source: Guardian Website




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