Nicola Sturgeon has been determined in her pursuit of indyref2 in the aftermath of Brexit. She wants to make Scotland an independent country and take it back into the EU – but the plans have been marred by economic uncertainty. In 2018 – The Institute for Fiscal Studies released a damning report which claimed an independent Scotland would have to endure 10 years of “extended austerity”. They added that the SNP’s growth commission published in May of that year would leave Scotland’s weak public finances facing continued cost-cutting and restraint.
David Phillips – the economist who led the report – commended the SNP’s growth commission for being honest about “the challenging public finance position an independent Scotland would start life with”.
But he ultimately questioned the party’s claim it would end austerity.
Mr Phillips said: “Their proposals imply another decade of the sort of restraint on public spending that Scotland is currently experiencing.
“If this is austerity, then austerity would be extended under the commission’s proposals.”
Murdo Fraser, then Scottish Conservatives’ shadow finance secretary, said Sturgeon “should simply admit it: independence comes at a huge cost.
“Until she does, nobody should believe a word she says.”
Patrick Harvie, co-leader of the pro-independence Scottish Greens, said the IFS was right to challenge the SNP’s report.
He said: “The compelling case for independence will be one which abandons rather than extends austerity economics.
“Broadening the tax base to include both corporate profits and asset wealth will offer a better way forward.”
An SNP spokesman rejected the IFS conclusions and insisted the commission had explicitly rejected further austerity and planned real-terms growth in spending.
The party said: “The growth commission contrasts the clear opportunities of independence with the despair and economic damage of Brexit – and replaces fear with optimism and hope about Scotland’s future.”
Another analysis has shown that Scotland could face economic challenges trying to join the EU.
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Scottish quarterly accounts published in January raised doubts about the SNP’s objective after it highlighted that Scottish economic output fell by three percent, reducing the overall value of the economy by £5bn.
The accounts also showed that the Scottish economic deficit of £12.6bn had risen to 7.2 percent of GDP, when it was previously seven percent.
This downward revision moved Scotland further away from the EU’s guidelines that a state’s deficit must be no more than three percent.
These figures covered the period for July to September in 2019. While this is technically a breach, it wouldn’t stop Scotland joining the bloc if it was an independent state.
While a deficit of no more than three percent is expected, new members can also negotiate transition periods allowing them more time to meet specific EU rules.
Support for independence in Scotland has grown in recent weeks
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Sir John Curtice told BBC’s World at One last month that between 52 to 53 percent of Scottish people now favour independence from the United Kingdom in what will be seen as a major boost for Nicola Sturgeon’s SNP.
The polling expert added the coronavirus pandemic has led to a gain of up to two percent for independence during the last quarter of the year.
He said this month: “We have had nine independent polls conducted this year and so far in 2020 on average these have put yes at 51 percent and no at 49 percent.
“If you look at figures for the last quarter, the four polls done during the coronavirus pandemic that figure has crept up to 52 or 53 percent.
“So we have been looking at a sustained period of around six months in which on average the polls have been putting yes ahead.”