Scottish Indepedence Means Higher Taxes Warns Former PM, Gordon Brown

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Scots will vote on independence next year
Scots will vote on independence next year

Handing Scotland full control over its financial affairs will lead to deeper cuts in public expenditure or higher taxes, the former prime minister has warned.

Gordon Brown said people in the United Kingdom currently enjoyed a number of legal, social and economic rights that stemmed from their citizenship.

But he said he feared this could be under threat if Scotland were to leave the UK and become independent.

Alex Salmond's Scottish government plans to hold a referendum on independence in autumn 2014.

In a lecture at the Edinburgh International Book Festival, Mr Brown also warned that the proposed second question on so-called devo max would be bad for Scotland.

He said: "If you break up the fiscal union, if you break up the sharing and pooling of resources across the UK, then it's clear that you will either have to cut public expenditure massively beyond what is being done at the moment, or you will have to tax Scottish people more."

He continued: "My worry about fiscal autonomy, which is now being proposed as the next stage of devolution, is that fiscal autonomy means more taxes in Scotland, not in a progressive way at all but simply to fill the gap that's left by not pooling and sharing the resources of the UK."

Mr Brown added: "Given that there's a pooling and sharing of resources at the moment, there is no escape from the fact that if you want the same level of services in Scotland you will have to raise taxes in Scotland."

But he went on to argue that an independent Scotland that kept the pound would be relegated to "a colonial relationship" with the remainder of the UK.

In an often self-effacing speech, the former chancellor joked that he was "maybe not the best person" to be talking about economics any more.

He said Britain should retain a "one island" solution to its problems, and argued that independence would be bad for defence and particularly defence jobs.

He said: "If you look at our single coastline, you argue of course very clearly that environmental, pollution, climate change, and security and defence problems know no man-made borders.

"Therefore it is an irony that we are considering erecting new barriers at a time when every other part of the world is considering dismantling them.

"You could then build the argument around security and defence and say, as was the original case for the union, our security and our defence is best guarantee by being part of this union.

"There are 30,000 Scots jobs dependent on defence. It is unlikely that there will be an army of a sufficient size ever in an independent Scotland to employ all those people who have wanted to join the British Armed Forces over time."

He added: "The Scottish national government has moved from wanting to join the euro or wanting an independent currency to accepting - and this is an irony as it is a colonial relationship if it were ever to happen - that the English government, not the Scottish nor British Government, will decide how the monetary policy of the country is run."

Mr Brown continued: "Break up the Union and then you will have regionally varied minimum wage rates, and that would mean that there will a race to the bottom with one unit trying to undercut the other.

"Then the good will undercut the bad and the bad will undercut the worst.

"Break up the Union that we have created and you will have different social security rates inevitably.

"Some people may welcome that at the start, but you will end up with a pensioner being treated completely differently in one part of the UK from the other, and people who are unemployed or disabled being given a completely different type of treatment.

"I think people will think that is not progress but that it is moving backwards, and there will be competition to see who can cut resources more quickly."

He said he wanted to make a case for Scotland's future "not by talking negatively about people's fears about the future but by talking positively".

A spokesman for Scottish Finance Secretary John Swinney said Mr Brown was wrong on his views on tax and spending.

He said: "Gordon Brown's attack on fiscal autonomy can only backfire on the anti-independence campaign - because the more the Unionist parties continue to offer Scotland nothing, the more they will encourage people to vote Yes to an independent Scotland.

"Scotland is better off than the UK as a whole, and therefore Gordon Brown is wrong on tax and spending, and wrong about fiscal autonomy and independence.

"Over the five years to 2010/11, Scotland was in a stronger financial position relative to the UK as a whole by a total of £8.6 billion - that's over £1,600 for every man, woman and child in Scotland.

"And in 2010/11, Scotland contributed 9.6% of UK taxes, but we received only 9.3% of UK spending.

"The bottom line is that Scotland will be better off with independence and control of our own resources."

SNP Treasury spokesman Stewart Hosie MP said Scotland needs job-creating powers in an independent Parliament.

He said: "The question that Gordon Brown and the anti-independence parties need to answer is why they prefer these key powers over jobs and the economy being held by a Tory-led Government at Westminster - which has used them to create the double-dip recession - rather than by the Scottish Parliament which is 100% accountable to the people of Scotland.

"Scotland's interests are best served by becoming an equal and independent nation so that we have the powers needed to realise the potential of every single person who lives here - and by maintaining the social union with our friends and neighbours south of the border, including the Queen as our joint head of state."