Scotland’s block grant could be cut by up to £2.3 billion by 2019-20 if the UK leaves the European Union, Scottish Labour leader Kezia Dugdale has claimed.
The cuts would be over and above those which public services will face in the next four years.
Ms Dugdale said: “The referendum is a decision which will define who we are as a country – do we want to turn our back on the world or will we continue to work with others to face the big challenges of our time?
“Being part of the EU is good for Scotland’s economy. Hundreds of thousands of Scottish jobs are linked to our trade with the EU and a Leave vote on Thursday would put that at risk.
“Anything that damages our economy damages our public services, because there will be less money to spend on schools and the NHS.
“A Leave vote could mean extra cuts of up to £2.3 billion. We can’t afford even more austerity with Brexit.”
She quoted analysis by the Institute for Fiscal Studies (IFS) saying that leaving the EU would lead to lower growth in the UK economy and a rise in public-sector borrowing.
The think-tank calculated that the UK deficit for 2019-20 could be up to £28bn. If the UK Government tackled this deficit with spending cuts rather than tax rises, in order to reach its goal of a budget surplus by 2019-20, Scotland would see its share of the budget drop by up to £2.3bn, or 8.5 per cent, Scottish Labour said.
But former Labour MP Tom Harris of Scottish Vote Leave hit back, claiming a Remain vote could leave a £600 million hole in Scotland’s NHS finances.
He said the extra cash would be needed to cope with the demands placed on the service by the inevitable increase in new citizens arriving in Scotland from EU countries.
He said: “Scotland sends far more to the EU than we receive back, so how on earth Scottish Labour can stand there with a straight face and cry ‘budget cuts’ if we leave is beyond me.
“At a time of stretched budgets, families will be concerned about the increasing pressure the NHS will come under from uncontrolled EU migration.”
Meanwhile, the Confederation of British Industry (CBI) has highlighted figures from the Treasury which state there is the potential to create 70,800 jobs in Scotland if the UK remains in the EU.
The CBI said that as many as 250,000 jobs in Scotland are currently linked to exports to the single market in areas such as manufacturing, retail and banking.
CBI Scotland director Hugh Aitken said: “The UK’s membership of the European Union has been of enormous benefit to Scotland for over 40 years.Some of the key sectors that lie at the heart of communities across the region, from manufacturing to retail, rely on our membership of the single market.
“Virtually every economist agrees that leaving the EU would likely cause an economic shock, damaging Scotland’s prospects.”
UKIP’s Scottish MEP David Coburn took time to enjoy an ice cream while campaigning for a Leave vote at The Mound yesterday.