Tom Gordon: Pension row shows the SNP’s bad habits catching up with it

LIKE much about pensions, the current argument over the state pension in an independent Scotland is a chewy affair.

It can be hard to keep track of who said what when about whether London or Edinburgh would foot the bill and harder still to come to a definitive answer on who has the right or wrong end of the stick.

But as the state pension in Scotland is currently £8.5billion a year, paid for from UK-wide taxes and borrowing, it’s worth going back to the row’s origin.

In September 2013, a full year before the referendum, the Scottish Government published “Pensions in an Independent Scotland” with a forward by the then deputy First Minister, Nicola Sturgeon.

This stated that under independence the state pension would continue much as before and be based on a person’s record of national insurance (NI) contributions.

But in future Holyrood would pay it.

“For those in Scotland in receipt of the UK State Pension at the time of independence, the responsibility for paying that pension would transfer to the Scottish Government,” it said.

For those of working age in Scotland, “the UK pension entitlement they have accrued prior to independence would become their Scottish State Pension entitlement”.

It added: “All pensions would continue to be paid as now and all accrued rights would be honoured and protected.”

This point was repeated in an annex: Instead of a UK state pension based on years of NI credits built up in the UK, people in Scotland at the point of independence “would be entitled to the Scottish State Pension based on years of NI credits built up in the UK. After this date, entitlement built up in Scotland would accrue to the Scottish State Pension”.

A few months later, the Scottish Government White Paper on independence was equally clear that the Scottish – not the UK – Government would pay out pensions in Scotland.

“For those people living in Scotland in receipt of the UK State Pension at the time of independence, the responsibility for the payment of that pension will transfer to the Scottish Government.

“It will not matter where in the UK you accrued your State Pension entitlement: if you are retired and are living in Scotland on independence, the Scottish Government will be responsible for paying that pension. The amount you are entitled to will not change because of independence,” it said.

The website of the official Yes Scotland campaign, which was heavily funded and staffed by the SNP, was in agreement.

“Your state pension will be paid in the same way [under independence], but simply by the Scottish Government rather than Westminster. The Scottish Government has made clear that accrued pension rights will continue to be honoured after independence.

“There will be agreement between the Scottish and UK governments as to the exact share of pension liabilities to be taken on by the Scottish Government – but it has repeatedly been made clear that no accrued pension rights will be lost.”

Note that it is “rights” that are being honoured and preserved, not cash. There is no suggestion in any of this material that UK money will keep covering those rights.

Rather, the record of people’s NI credits will be used by the Scottish Government to calculate individual Scottish state pensions, helped by the proceeds of all that haggling over assets and liabilities.

Fast forward to December last year, when SNP Westminster leader Ian Blackford was asked on the Scotland’s Choice podcast about what would happen to state pensions after independence.

“Absolutely nothing,” he said. “The important point is that those that have contributed while we’ve been part of the UK have an entitlement for a pension.

“That commitment to continue to pay pensions rests with the UK Government. It’s no different to a UK citizen that chooses, for example, to live in Canada or Spain or France or anywhere else, that commitment to receive your pension remains in place. That’s an obligation of the UK Government, and what will happen going forward, it will be the obligation of the Scottish Government to look after pension entitlement from the period that those that are working in making pension contributions in the period post-independence.”

This is different. Mr Blackford is now saying the UK will “pay pensions” after independence, a shift on past NI rights being reflected in a Scottish state pension.

He later said something similar to ITV Border. “It’s an obligation on the UK Government to meet the commitment to pensioners that have paid national insurance contributions. Scottish pensioners have that right [to a UK pension], they have paid national insurance over a long period to get that, that will remain.”

He did mention a transfer mechanism in passing, but there was little sense of the issue being subject to negotiations of the kind mentioned by Yes Scotland. It was made to sound a painless done deal.

Nicola Sturgeon was more circumspect at FMQs last week, stressing negotiations would be integral to the process.

After independence “the distribution of existing UK liabilities and assets, including those related to pensions, will be subject to negotiation, and Scotland will fully pay its way in that,” she said.

She then quoted Steve Webb, the former UK pensions minister who in 2014 told MPs that people would get the same pension under independence as in the UK.

Having dug out Mr Webb’s evidence, I can report the First Minister is right. He did say that. However she quotes only a sliver of his committee testimony. He also said there would be a potentially “messy and complicated” deal involved.

“For me, creating separation casts a whole lot of uncertainty and doubt on people’s retirement planning. It is all subject to the outcome of negotiations – and we just do not know,” he said.

There would be no rules or guidelines, “it would simply be the two Governments sitting down and negotiating”.

Asked if it would it be “fair to say that it is all very complicated and that you have no clue as to how these negotiations will go”, Mr Webb replied: “Absolutely.”

Ms Sturgeon was unwise to rely on Mr Webb in this way. Rather than quote her own pensions paper from 2013, she latched on to his unforeseen, congenial comment made six months after it.

That’s a pretty slender reed on which to balance an £8.5bn policy. Moreover, no government can bind it successor.

Mr Webb was a Liberal Democrat minister in the Coalition, three general elections ago. He lost his seat in 2015.

It’s ridiculous to pretend that what he said in 2014 compels the UK government of today, and presumably all future UK governments, to act in a particular way.

Sir Steve told the Herald as much this week, when he said his words were “neither here nor there” and it was for the current crop of politicians to make their case to the electorate.

By the same token, the White Paper of 2013 no longer binds the SNP. True, consistency can bring credit. But so would a big refresh to reflect changes in society and gains in knowledge. Large chunks of it have, in any case, been nullified by Brexit.

The main thing is to do it in the open, not try to redact problems on the sly with comments like those of Mr Blackford.

Ms Sturgeon was much better in a BBC interview yesterday, stressing negotiations over state pensions would be key. But the damage had already been done.

The SNP does itself no favours with this kind of honest-when-caught approach.

Independence is a very practical matter.

I suspect there are quite a few voters who are attracted to it in principle – it is, after all, the democratic norm around the world – but worried about the execution.

They like like the idea, but fear the current government would muck it up.

Lack of candour and glib answers to complex issues are a red flag to them.

The SNP’s bad habit of zipping around hard topics in favour of making shallow debating points is therefore self-defeating.

A Government that doesn’t look like it can handle the facts before a referendum doesn’t inspire confidence that it would cope with bigger challenges beyond it.

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