Iain Duncan Smith warns over costs of Scottish welfare pledges

Iain Duncan Smith, the work and pensions secretary. Photograph: Andrew Yates/AFP/Getty Images The work and pensions secretary, Iain...

Iain Duncan Smith, the work and pensions secretary. Photograph: Andrew Yates/AFP/Getty Images
The work and pensions secretary, Iain Duncan Smith, has challenged first minister Alex Salmond to explain how Scotland could afford extra pension and benefits costs of up £1.55bn a year after independence.
Duncan Smith released figures from the Department for Work and Pensions (DWP) asserting that the first minister's pledges on social security post-independence would cost each working-age adult in Scotland an extra £450 a year over the next 20 years.
He said promises such as delaying the retirement age increase to 67, cancelling the new universal credit benefit system and setting up a separate social security apparatus had not been costed by Salmond's SNP government.
The DWP analysis found that per head spending on social security in Scotland was 2% higher than the UK average at £17.7bn in 2012-13. The department said the extra costs would come from tax rises, spending and public service cuts, or increased borrowing. "These are massive spending commitments by any standards," it said.
In addition to leaving the security of the UK, which allowed higher per head spending on pensions and disability benefits, those cuts "would risk the wellbeing of vulnerable people currently supported by this system", Duncan Smith said.
"On top of the ageing population – which is increasing faster in Scotland than the rest of the UK – the Scottish government are committing to spending even more on wider welfare without saying how they'll pay for it."
His department said the UK government would never agree to the Scottish government's demands that it would share the DWP's IT and payments systems during a transition period after a yes vote while at the same time dropping UK policies it did not like or altering others such as the pension age.
And since the three main UK parties had ruled out sharing sterling after a yes vote, sharing the benefits system under those circumstances even for a transitional period would be impossible, it said.
"Reconfiguring the current system to meet the demands of two governments with different policies would introduce additional costs and risks.
"This would not be in the interests of the government of the continuing UK. The UK government would do nothing to put at risk the continuity of payments to its own citizens and would not be prepared to incur significant costs to change IT systems," the DWP report said.
Nicola Sturgeon, the deputy first minister, accused Duncan Smith of hypocrisy, claiming that his welfare reforms could lead to spending cuts worth up to £6bn in Scotland from 2010 to 2016. She said charities estimated that another 100,000 children in Scotland would be pushed into poverty by the overall package of coalition changes.
Insisting that current Scottish tax income made welfare more affordable than for the UK as a whole, Sturgeon said: "A Tory-led government that Scotland didn't vote for is dismantling large parts of the post-war welfare state because of its rightwing ideology. This is social vandalism on a vast scale and shows why people are worse off when decisions about Scotland are taken at Westminster.
Sturgeon said Duncan Smith was a coward for failing to come to Scotland to present the DWP's paper on welfare and independence in person and sending instead Alistair Carmichael, the Lib Dem Scottish secretary.
Nearly all other senior UK cabinet ministers – including William Hague, Theresa May, George Osborne and Ed Davey – had travelled to Scotland to present UK government documents on the impact of independence. A UK government spokesman said Duncan Smith was unable to present the DWP paper in person because of a diary clash.
In a clear sign of close collaboration between the UK government and the pro-UK Better Together campaign, many of the figures on pensions and overall spending in the DWP document had been raised on Tuesday by Gordon Brown, the former prime minister.
Referring to an "internal DWP review", Brown flagged up figures on the £100bn public sector pensions bill, the ratio of pensioners to working-age people, higher migration figures and the costs of a new IT system.
The DWP report – which made no mention of the bedroom tax, the most controversial reform for many centre-left Scottish voters – was the 12th analysis paper to be published by the UK government on the implications of independence.
Another three reports, including one dealing with major institutions such as the BBC and National Lottery, are due out before the official referendum campaign starts on 30 May, leaving ministers short of time and worried about diminishing public appetite for detailed analytical papers.


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