Labour In 'Austerity Max' Warning

SNP plans for full fiscal autonomy in the UK would result in either massive'' cuts to services or an estimated £2,400 tax hike per household, Labour has said. The party's finance spokeswoman Jackie Baillie said the policy, under which Scotland would collect all taxes and be responsible for all spending while making payment to Westminster for common services such as defence, would result inausterity max''. The plummeting price of oil would leave the country facing an annual deficit of £6 billion, representing 10% of all public spending or 13.5% of Scotland's £44.3 billion tax income, according to the party's analysis. Ms Baillie said voters at the general election faced a choice between Labour's plan to retain the Barnett formula, used to calculate Scotland's block grant, alongside further devolution to Holyrood as a result of the Smith Commission agreement, or the SNP's plans for full fiscal autonomy and the scrapping of Barnett. She was joined by academic Professor Jim Gallagher at a briefing in advance of the publication of Scotland's annual accounts - the Government Expenditure and Revenue Scotland (Gers) figures covering the financial year 2013-14. Mr Gallagher said the fiscal gap between Scottish and UK spending and income was approximately £8 billion a year and North Sea revenues could no longer be relied upon to fill the void. The numbers for oil look as if they're going to be very small, somewhere between £1.5 billion and £2 billion a year,'' he said.If you were to have full fiscal autonomy you need either cuts or tax rises to get to the state that the UK is in, even the state that the UK was in when it had a deficit that was eye-wateringly big.'' Ms Baillie said: We expect the Gers figures tomorrow to show a deficit of approximately £4 billion but the figures for 2014-15 will show, we believe, a deficit of over £6 billion."From a Labour perspective we believe in major new powers for the Parliament coming through the Smith Commission coupled with the security of Barnett, because that gives us stable spending on things like schools, the NHS and retains pensions as a UK-wide system." The SNP have repeatedly said they want full fiscal autonomy whilst remaining in the UK, and that of course is where Scotland raises all its taxes for all its spending."What they won't admit is that that will result in massive cuts to services, particularly when you consider what we've said about the deficit likely to be £6 billion in 2014-15." Six billion less in the budget is a gaping hole so it requires either cuts to services ... £6 billion is half of the NHS spend in Scotland, or it requires an increase in taxation, and the estimate is that that would be approximately £2,400 extra per household in Scotland, and that is simply to stand still."If you thought the Tory's austerity plans were bad enough, this effectively is austerity max.'' Ms Baillie also attacked the Scottish Government for publishing two economic papers six days apart with different figures. Labour said that in the second paper, estimates for the benefits of improved economic performance in Scotland had been boosted by hundreds of millions of pounds by adding in the effect of full revenue retention'', defined asall additional tax revenue generated by the expansion in the economy are assumed to be retained in Scotland and reinvested back into Scotland's public finances and public services''. The party claimed full revenue retention was only possible in the event of full fiscal autonomy. Ms Baillie said: I could only guess that perhaps the Cabinet Secretary intervened and said 'this isn't good enough, I need you to model full revenue retention'.But to publish papers that look virtually identical within days of each other suggests something's not quite right.''