How the SNP have just shot themselves in the foot and cost us £13bn

I've tried. 

Honestly I've tried to stay out of it. 

But come on!!!

I've been watching the SNP drive a coach and horses through their pensions policy (again) and I've expected myself to sit on my hands.Nope, can't do it any longer. 

Now I'm not going to go into the detail on the complete mess the SNP have gotten themselves into. Kevin Hague has brilliantly captured that. 

Blackford on Sky news again

All I want to do is to take the latest (insane) policy from the SNP at face value, Sam Taylor of These Islands has been painstakingly following all of these twists and turns. From Blackford, to Forbes, to Sturgeon, to Blackford again and to Michelle Thompson, he's been highlighting the often contradictory messaging from the SNP. 

But we've now got enough to see though all of the chaff. 

The SNP policy on pensions is that pensions will be paid by the Scottish Government for all Scottish pensioners, that includes all of those in payment at the moment. 

So much so the same as 2014. 

However now the SNP also say that they will also expect to receive a share of all of the historic NI pension payments made to the UK over the years, despite them recognising there is no pot for pensions. 

It's this assertion I want to break down and show you that this is an exceptionally bad move from the SNP and will backfire spectacularly on them were they to use this in negotiations. 

A share of historic payments

The SNP think that Scotland is entitled to a historic share of NI contributions in respect of the state pension. It's easy enough to obtain that figure from the GERS database. 

From the 2021 latest publication Scotland paid £11,5bn in National insurance, and received state pensions of £8.6bn, so that around 75% of all Scottish NI is going towards the state pension, or to put it another way it's around 30.8% of the total social security spend in Scotland. 

It's this share of NI contributions that the SNP think Scotland is entitled to get back, pot or no pot. What's more, according to the theory, Scotland is entitled to them for each year going back a generation, or at least the lifetime of a Scot. 

So, for a female, that's about 16 years from the state pension age of 65, but we can be more generous and go back 23 years to 1998-99 because that's where the database takes us. 

So we could tally up all these payments and come up with a number that the SNP would like us to think we are entitled to.

If you eat your cake, you can't have it

The trouble is the SNP haven't thought any of this through, or more likely they have thought it through, they just hope their supporters won't. 

If your case is that you are entitled to get your NI back, because it was really funding your own pension (pot or not pot) then that begs one important question? Who has been funding historic state pensions during this time?

Now we know, and everyone generally concedes, that current state pensions are funded by current NI, but let's go along with this suspension of reality and accept that a share of historic NI needs to come back to Scotland. 

But equally In that case historic state pension payments need also to go back to Westminster as they have funded them not from Scottish NI but from their resources. 

So if you can't have your pension cake and eat it, we need to balance the equation and look at the (pensions) share of Scottish NI paid in the UK and the share of state pensions paid to Scotland. 

Here the numbers are really rather consistent. 

Scotland provides around 8.1% of National Insurance to the UK but receives around 8.8% of Social spending in Scotland. 

Now obviously there is much more in Social spending than just pensions, but fortunately we can receive a further breakdown of this spend from the main expenditure database and we can see that the numbers are remarkably correlated with a consistent average of Scotland receiving 8.8% of State pension funding. 

Let's remember then, you want Scotland to have all of our NI contributions back, then rUK is entitled to all of those pension payments back. 

So this year alone. Scotland paid 8% of UK National Insurance and received 8.8% of State Pensions back in return. So netting these figures off one another Scotland owes the UK 0.8% of UK State Pension spend, or putting it another way Scotland was only entitled (under this theory) 8% of all UK State Pension spend. 

In short we received £8.6bn but only 'paid' £7.9bn, that's us due a net payment of £0.7bn for this year alone. 

Be careful what you wish for

We can of course then apply this technique throughout all of the back data, identifying the share of NI paid and the actual share of Social Spend and State Pension Spend (either directly 2015-21 or though the historic average (98-14)). 

This gives us a total bill from rUK to Scotland for just under £13bn, and I havent even revalued it to today's prices. 

So let me sum up the absurdity of this position in negotiations. 

The SNP say ' We want our NI back!'.

The UK replies, OK that's fine, we want the pensions we paid you then, here's a bill for £13bn. We'll need that settled up immediately and then we can talk about your UK debt share. 

As ever the SNP hope that no one will look beyond the first line of their proposition, but this isn't just bad politics, this is terrible negotiation tactics. 

The SNP could easily have argued for a 'clean break' - just call it quits and everyone starts funding their own pensions with no assets. But they've now opened themselves up to this challenge from the UK. In negotiations you can now bet that the UK team will be staring at the same numbers I am and pushing a pensions bill for £13bn over the table and playing clips by Ian Blackford and Nicola Sturgeon on an endless loop. 

For a bit of bad politics the SNP have just cost us £13bn.