Latest figures revealed by the Institute of Fiscal Studies regarding the fiscal situation of Scotland in light of The Scottish National party’s flagship financial policy of full fiscal autonomy has revealed that it might lead to a shortfall of nearly £9bn in Scotland’s finances by 2020.
The report issued by the IFS on Tuesday has come after the SNP leader, Nicola Sturgeon, disregarded the institute’s previous report projecting a £7.6bn shortfall for 2015-16 under the policy. Commenting on the report, Scottish Labour leader, Jim Murphy, accused Sturgeon of planning for a “black hole” in the country’s finances. Whereas the senior IFS research economist who updated the projections, David Phillips, elucidated that the institute has attempted to show how the original figure was not misleadingly pessimistic but in fact “the gap doesn’t shrink, it grows.”
Although the SNP’s manifesto launch on Tuesday completely downplayed the previously flagship policy and proposed a gradual transition, Phillips stressed in his observation note that “delaying a move to full responsibility for a few years would not, on its own, deal with the fiscal gap.” Mr Phillips pointed out that “the gap between Scotland’s deficit and that of the UK as a whole would, if anything, grow somewhat larger in the years ahead, reaching £9.7bn in 2019–20 (equivalent to £8.9bn in today’s prices). The figure for 2015–16 therefore does not seem misleadingly pessimistic given current revenue and spending forecasts.”
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