Brown warning on independence shift

Handing Scotland full control over its financial affairs will lead to deeper cuts in public expenditure or higher taxes, the former prime minister has warned.

Gordon Brown said people in the United Kingdom currently enjoyed a number of legal, social and economic rights that stemmed from their citizenship.

But he said he feared this could be under threat if Scotland were to leave the UK and become independent. Alex Salmond's Scottish Government plans to hold a referendum on independence in autumn 2014.

In a lecture at the Edinburgh International Book Festival, Mr Brown also warned that the proposed second question on so-called devo max would be bad for Scotland.

He said: "If you break up the fiscal union, if you break up the sharing and pooling of resources across the UK, then it's clear that you will either have to cut public expenditure massively beyond what is being done at the moment, or you will have to tax Scottish people more."

Mr Brown added: "Given that there's a pooling and sharing of resources at the moment, there is no escape from the fact that if you want the same level of services in Scotland you will have to raise taxes in Scotland." He continued: "My worry about fiscal autonomy, which is now being proposed as the next stage of devolution, is that fiscal autonomy means more taxes in Scotland, not in a progressive way at all but simply to fill the gap that's left by not pooling and sharing the resources of the UK."

In an often self-effacing speech, the former chancellor joked that he was "maybe not the best person" to be talking about economics any more. But he went on to argue that an independent Scotland that kept the pound would be relegated to "a colonial relationship" with the remainder of the UK. He said Britain should retain a "one island" solution to its problems, and argued that independence would be bad for defence and particularly defence jobs.

A spokesman for Scottish Finance Secretary John Swinney said Mr Brown was wrong on his views on tax and spending.

He said: "Gordon Brown's attack on fiscal autonomy can only backfire on the anti-independence campaign - because the more the Unionist parties continue to offer Scotland nothing, the more they will encourage people to vote Yes to an independent Scotland. Scotland is better off than the UK as a whole, and therefore Gordon Brown is wrong on tax and spending, and wrong about fiscal autonomy and independence.

"Over the five years to 2010/11, Scotland was in a stronger financial position relative to the UK as a whole by a total of £8.6 billion - that's over £1,600 for every man, woman and child in Scotland. And in 2010/11, Scotland contributed 9.6% of UK taxes, but we received only 9.3% of UK spending. The bottom line is that Scotland will be better off with independence and control of our own resources."