Former prime minister Gordon Brown has highlighted keeping British pensions as the first of his five ‘big positives’ for Scotland staying in the United Kingdom.
In a speech in Glasgow yesterday Brown said Scotland benefits to the tune of £425m a year extra in pension payments because it pays 8 per cent of UK National Insurance but receives ‘upwards of 9 per cent’ of benefits.
Referring to previously unpublished DWP figures and estimates, Brown said this annual uplift for Scotland would rise from £425m to £700m a year over the next 20 years.
The DWP figures referred to by Brown claim the UK will underwrite Scotland’s estimated £100bn public sector pensions bill, being 10 per cent of the UK total, while Scotland has 8 per cent of the UK population. He said the cost of Scotland’s pensions would be three times its oil revenues in the years after independence, in the event that a Yes vote succeeds.
Brown also said it would cost about £1bn for Scotland to administer the first years of a separate pensions and benefits system once IT costs were included. He told the Guardian that computer costs would push up costs in the early years by £300m-£400m.
Brown’s four other ‘big positives’ are participation in the NHS, maintaining the 600,000 Scottish jobs with British companies, sharing the UK currency and retaining a say in how it is supervised and keeping the BBC.
Brown said: “First, our Scottish future should include a partnership for pensioners. The partnership for pensioners is today worth £425 million a year extra to Scotland, which is the difference between what we receive and what an ordinary population-weighted allocation would be. This figure is set to rise to £700 million a year over the next two decades, with us pooling and sharing the costs across the UK as Scottish pensioner numbers rise from 1.1 million to 1.3 million. The benefits to Scotland also include the UK rightly underwriting the £100 billion Scottish public sector pensions liabilities, and avoiding £1 billion in year one costs for administering a separate Scottish social security system.”
“It is clear that pensioners are better protected when the risks are spread across the UK and it is also clear that in the year the SNP want independence the Scots pension bill alone is three times the income from oil revenues.”
Scottish National Party Work and Pensions spokesperson Dr Eilidh Whiteford MP said: “The claims Gordon Brown is making on pensions are simply ludicrous. The reality is that pensions are more affordable in Scotland than in the rest of the UK, a view supported by the National Institute of Economic and Social Research, who have also made clear that the demographic challenge is no more significant for Scotland than it is to the rest of the UK.
“We also know that insurance providers, including HSBC and the Department of Work and Pensions itself, are clear that pensions would be unaffected following a Yes vote.
“Gordon Brown cited the NHS as a positive example of being in partnership with the rest of the UK, yet his party at Westminster are claiming the Tories are privatising the NHS and destroying its founding values. Just today, Labour has accused David Cameron of selling off the NHS to his mates. It is blatant hypocrisy, and the people of Scotland are seeing right through it.
“With independence we will be able to ensure a fair deal for pensioners, with a triple lock on the state pension to keep pace with the cost of living, a review of the pension age to ensure it is right for Scotland’s pensioners and a fair approach to public sector pensions.”