Chamber and committees

It is the long-standing practice, followed by both the Scottish Government and the UK Government that, the fact and content of any legal advice is not released outwith Government.

Annex B of Pensions in an Independent Scotland explains that the Scottish Government would require access to DWP models to enable production of full costings.

However in terms of current spending and affordability of pensions, expenditure on social protection as a share of GDP has been lower in Scotland than in the UK in each of the past five years, in 2011-12 social protection expenditure accounted for 14.4% of GDP in Scotland and 15.9% in the UK.

A smaller percentage of Scotland’s tax revenues are spent on social protection compared to the UK. Figures from 2011-12 (GERS report) show that 38% of Scottish tax revenues were spent on social protection, compared with 42% for the UK.

As the recent White Paper Scotland’s Future: Your Guide to an Independent Scotland points out, Scotland’s stewardship of public sector pensions can in some areas already be argued to have delivered more sustainable schemes than their counterparts in England and Wales.

Annex B of the report reads: “The estimated cost is £8.5 million in 2016-17, relative to a baseline where Savings Credit is abolished. Total costs will increase over time.”

Scotland already has the people and infrastructure in place to manage and to pay pensions and pension scheme administrators across the UK will continue to pay pensions on time and in full during any transitional period leading up to a move to independence. Indeed, existing safeguards for scheme members are being further strengthened by the introduction of the governance provisions of the Public Service Pensions Act 2013.

In addition section 30 of the Edinburgh Agreement committed the UK and Scottish Governments ‘to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.’

During the transitional period, pensions will continue to be paid as currently and will continue to benefit from legislative protections under the continuity of law principle. Article 1 of Protocol 1 of the European Convention of Human Rights also means that pension rights are property rights under the Convention which governments must respect.

I refer the member to the answer to question S4W-17813 on 9 December 2013. All answers to written parliamentary questions are available on the Parliament’s website, the search facility for which can be found at:

http://www.scottish.parliament.uk/parliamentarybusiness/28877.aspx.

Scotland and the UK both face ageing populations, as do all developed countries. However, the position facing each country is different.

Updated population projections (2012 based) were released on 6th November 2013. These suggest that the gap between Scotland and the UK, in terms of the projected increase in the pensioner population, is wider than that cited in Pensions in an Independent Scotland: Scotland faces an increase in pensioners of 27% between 2012 and 2037, compared to the UK’s 31%.

At the same time, Scotland faces lower projected growth in the working age population than the UK (4% compared with 12%) and this affects the respective dependency ratios.

Both the UK and Scotland need to address these challenges in ways that best suit the context each faces. The pensions paper sets out why independence offers the optimal route to a successful resolution for Scotland.

We intend if in government, to appoint an independent commission on the state pension age within the first year of independence. The commission will have a remit to investigate and make recommendations on the appropriate rate of increase of the state pension age, beyond 66, that would suit Scottish circumstances. The commission will take into account life expectancy, fairness and affordability, including implications for increased public sector pension costs.

We are clear that transitional arrangements must not prevent the Scottish Government from having the policy flexibility to make any immediate changes to welfare (including pensions) policy, and we welcome the Expert Group on Welfare’s acknowledgement of this.

In Chapter 4 of the Scottish Government’s White Paper Scotland’s Future: your guide to an Independent Scotland we set out our priorities for action, including halting the further rollout of Universal Credit and Personal Independence Payment in Scotland, allowing the first government of an independent Scotland to take forward reforms to the welfare system that meet Scotland’s needs and reflect our priorities.

The costs and savings would be subject to negotiations.

The Scottish Government has had discussions with a range of organisations on this issue. These discussions have informed our position on cross-border pension schemes.