Independence (Pensions)

Oral Answers to Questions — Scotland – in the House of Commons at 11:34 am on 11 September 2013.

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Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills) 11:34, 11 September 2013

What assessment he has made of the potential effect on pensions of Scottish independence.

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

The “Scotland analysis: Financial services and banking” paper considered private sector pensions. We will be examining state and public pensions in later papers in the series.

Photo of Ian Murray Ian Murray Shadow Minister (Business, Innovation and Skills)

The Institute of Chartered Accountants of Scotland highlighted that, on independence, cross-border defined benefit pension schemes would have to be fully funded, which would leave a deficit of some £230 billion. That was dismissed by the First Minister, who said that he would merely call for a derogation from the EU. Given that the Czech Republic has not only been refused that, but has been fined, what does the Minister think will happen to Scottish pension arrangements now and in the future?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

Spending on state pensions and public sector pensions is driven by demographics and is set to rise. The UK Treasury and the Department for Work and Pensions absorb the risk of growth in demand and there would be more volatility in spending in an independent Scotland. Those are not my words, but the words of John Swinney. It is a pity that he said them in private, not in public.

Photo of Eleanor Laing Eleanor Laing Conservative, Epping Forest

Does the Minister agree that the ability of the Scottish economy to support the pensions that the people of Scotland depend on will be greater and better if Scotland remains part of the United Kingdom?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I absolutely agree with my hon. Friend, not least because the Scottish Government and the Scottish National party have set out no coherent plans for a sustainable pensions system in an independent Scotland.

Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Spokesperson (International Development), Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Work and Pensions), Shadow SNP Spokesperson (Agriculture and Fisheries)

The Minister must think that people in Scotland are buttoned up the back. He knows as well as I do that in terms of both revenue and GDP, Scotland spends a lower percentage of its money on pensions than other parts of the UK. Does he accept that the lower life expectancy in Scotland and other demographic trends make it important that decisions on pensions are made in Scotland by Scotland for Scotland?

Photo of David Mundell David Mundell The Parliamentary Under-Secretary of State for Scotland

I know that the people of Scotland are not buttoned up the back. They understand that the Scottish Government and the SNP say one thing in private and another thing in public. In private, John Swinney has made it absolutely clear that the affordability of pensions would be a serious issue in an independent Scotland. That is a fact. [Interruption.]