An independent Scotland’s first annual pension bill would be “three times the income from oil”, according to former prime minister Gordon Brown.
Pensions will be more secure and cheaper to administer if Scotland remains in the UK, the Scottish Labour MP will say in his first speech for the cross-party Better Together campaign.
Scotland faces a £100 billion public sector pensions bill with an additional £1 billion of administration costs through duplicating UK services, Mr Brown is expected to say in his speech.
And it faces a “pensioner time bomb” as the number of elderly people is growing faster than the working age population, an internal Department of Work and Pensions memo procured by Mr Brown said.
The former prime minister and chancellor will say: “The whole point of sharing risks and resources across the UK is that it is right and proper that the British welfare state bears the rising cost of Scottish pensions as the number of old people will rise from one million to 1.3 million.
“As the internal DWP document makes clear, it is fairer and better for everyone that Britain’s faster-rising working-age population rather than Scotland’s slow-rising working-age population covers the cost of the rising numbers of elderly in Scotland, because we have contributed in UK National Insurance all our lives to spread the risks of poverty in retirement.
“If the SNP deny there is a problem, they have to explain why they have set up a working party on ’the affordability’ of future pensions.
“Scottish public sector pension liabilities of £100 billion, while also higher, are also rightly covered as part of the system of pooling and sharing resources across the UK.
“It makes no sense either to break up the British system of pension payments or to set up a wholly new administrative system which the DWP costs at £1 billion in the first years.
“In areas such as pensions, it makes good sense to combine having a Scottish Parliament with being part of Britain.
“The SNP Government has said the case for independence should be judged on whether Scotland would benefit financially or not.
“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% in 1997 to 11% when we left office.”
Eilidh Whiteford, the SNP’s work and pensions spokeswoman, 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.
“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.
“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 £100 billion 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.
“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.”
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