Gordon Brown will today make the 'positive case for a strong Scottish Parliament being part of Britain by citing pensions, health service funding, jobs and the currency'. In a speech at Glasgow University entitled 'The Best Future For Us, The Scottish People' the former Prime Minister will argue that the referendum debate is not one between Scotland and Britain and it is not about whether you are ‘for Scotland or for the Union'.
It is, he will say, a debate between two alternative Scottish visions of Scotland’s future – one for a Scottish Parliament that breaks all political links with the UK and the other for a Scottish Parliament that continues to pool and share resources across the UK. And Mr Brown will open two new fronts in the referendum debate on pensions using unpublished internal Department for Work and Pensions (DWP) figures he has been given that show the cash benefit to Scotland as he campaigns to ‘keep our pensions British.’
First, figures are thought to show that as Scottish pensioners numbers rise from 1 million to 1.3 million, the UK will pay the escalating cost of Scottish pensions that will rise from a £425million-a-year extra benefit to a £700million-a-year extra benefit over the next two decades. This is because while Scotland pays eight per cent of UK National Insurance, it receives upwards of nine per cent of the benefits. Second, the UK will underwrite what is estimated confidentially as a £100billion Scots public sector pensions bill. The UK will cover Scottish liabilities which are 10 per cent of the UK’s total, while Scotland has only eight per cent of the population.
Mr Brown also says that there is a third pensions gain for Scotland, for it would cost around £1billion for Scotland to administer the first years of a separate Scottish pensions and benefits system once IT costs were included. On top of £720million running costs, there would be £300-400million in computer bills, costs incurred he says because of ‘unnecessary duplication.’ Gordon Brown’s new figures – based on unpublished Registrar General and DWP statistics – show that today Scotland receives £9.6billion a year in overall pensioner benefits but that Scotland would receive just £9.1billion in pensioner benefits if pensions cash was allocated only on our population share – and not on the basis of need.
The bills for pensions mount because of a pensioners time-bomb as Scottish pensioner numbers rise by 300,000 even as Scotland’s working age population grows more slowly than that of the UK. As an internal DWP document given to Brown says, there is ‘a sharp deterioration in the support ratio as the 1960s baby boomers reach pension age.’ The reason for the higher Scottish payout is that Scotland benefits far more from UK-wide pension credits to top up the basic pension, with £700million a year paid to 248,000 Scots in credits worth £25 per week to the typical recipient.
And Scottish pensioners receive far more disability benefits. One in four Scots old people – 259,000 – receive disability support, costing £1billion a year. It is worth an average of £20 a week to recipients. These two measures explain why pensioner poverty has fallen dramatically from 33 per cent of Scots old people in 1997 to 11 per cent in 2010. So while it costs the UK £1,725 per head of the population for all pensioner benefits, Scotland receives £1,805 per head – a gap of £80 per person that will rise to £120 over the next two decades. As the Scottish pensions bill escalates, social security spending will be rising in Scotland by 3 per cent a year compared with the UK’s 2 per cent a year.
By 2030 30 per cent of Scots will be over 60 compared with just over 20 per cent today. The bonus matters to Scotland, says Mr Brown, because of the time bomb revealed in the internal DWP review. It shows, he says, how a slow growing Scottish working-age population would otherwise have to bear the rising costs of pensions alone. The DWP internal paper says that ‘under the principal migration variant in 20 years time there are projected to be 2.84 working age people per pensioner in Scotland compared with 2.98 in the whole of the UK.’
Gordon Brown, in his speech for the Better Together campaign, will say: "For too long the referendum debate has been presented as one side representing Scotland and the other side representing Britain. In fact the real debate is between two Scottish visions of Scotland’s future – the nationalist one based on the breaking of all political links with the UK and our vision based on a strong Scottish Parliament backed up by a system of pooling and sharing risks and resources across the UK."
Gordon Brown is also expected to say: "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. "Indeed the best deal for poorer pensioners is the redistribution of resources we have negotiated within the UK which allowed pensioner poverty in Scotland to fall under Labour, from 33 per cent in 1997 to 11 per cent when we left office."
Responding to reports of Gordon Brown’s speech on Scottish pensions the SNP Work and Pensions spokesperson Eilidh Whiteford said: “Gordon Brown is simply repeating the same economically illiterate claims the Tories and Lib Dems made over a year ago. On this backwards logic the UK pensions bill is 25 times the value of its oil and gas - making it impossible for the UK to afford to pay for pensions. The only new thing in this contribution is that Gordon Brown has finally ended the charade and joined his Labour colleagues in the Tory No campaign."
Continuing Dr Whiteford commented: "Far from re-launching as a positive campaign this contribution is negative, repetitive and lacks any credibility. 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 important to Scotland than it is to the rest of the UK. Pensioners and public sector workers across Scotland will have little faith in Gordon Brown's comments on pensions."
Commenting on Mr Brown's own record on pensions Eilidh Whiteford said: "As Chancellor he failed to restore the link to earnings leaving pensioners out of pocket and his raid on the pension funds saw pensioners lose £100bn of investments. Meanwhile public sector workers have seen the terms and conditions of their pensions eroded and the Scottish Government threatened with funding cuts if it didn't implement the same policies."
Concluding her comments Dr Whiteford commented: "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."
