An influential thinktank yesterday tore apart Alex Salmond’s economic plan for an independent Scotland, warning that a Yes vote will make it harder to protect public spending from cuts.
The blow to Salmond’s case for independence came as a number of high-profile UK retailers and banks added their names to a growing list citing concerns about the economic implications of a Yes vote.
An impartial paper by the Institute for Fiscal studies looking at Salmond’s claims that Scotland could protect its NHS from privatisation and actually spend more outside of the UK, said spending would be better protected within the United Kingdom, contrary to the Yes campaign’s promise.
“On most plausible scenarios it is hard to see how an independent Scotland could end austerity in the short run,” the report stated.
“On the basis of the independent Office of Budget Responsibility’s oil forecasts, an independent Scotland would likely still have a deficit of 2.9 per cent of GDP … In this case an independent Scotland would need to implement bigger spending cuts (or more tax rises) than the UK as a whole or try to borrow more.
“This means it would likely be harder rather than easier to protect the NHS”, it concluded.
Yesterday, shares in RBS and Lloyds both rallied on the news that the banks would withdraw south of the border if Scotland votes no next week. TSB, John Lewis, Asda and Tesco Bank all set out concerns about an independent Scotland, with Marks and Spencer set to follow suit today.
Tesco played down the possibility of price rises, if the nation leaves the UK, saying all discussions are “speculative”.
In another day of fierce campaigning around 100 Labour MPs made the trip north to make the case for the union. 97 per cent of the population are registered to vote next Thursday, a record in Scotland.
Meanwhile, bookmakers said the highest individual bets so far have been placed on No winning the vote.