MPs told of scale of Scottish independence pensions challenge

The Scottish government could not “unilaterally do what it wanted” with accrued pension rights in the event of separation, experts have told MPs at a meeting of the House of Commons Scottish Affairs Committee.

Conservative member of the committee Sir James Paice suggested people should not assume their pensions income would be protected by the government of an independent Scotland.

“Is it not the case that a new Scottish government in the case of independence has actually no obligations to respect entitlements, accruals or anything… It is entirely in the hands of whatever the Scottish government decided after they became independent,” he suggested.

However expert witness David Bell, professor of Economics at Stirling University, said it was unlikely the government would have such freedom, saying: “The debate around pensions would be part of the much larger debate around the terms of separation, and the Scottish government could not unilaterally do what it wanted about accrued entitlements for pensions in that it would at the same time be negotiating around the debt, around the currency, and these issues.”

Pension entitlements could not be simply “negotiated away”, the Institute of Chartered Accountants of Scotland executive director David Wood agreed, also giving evidence. Wood added that it was “critically important” the issues were clarified by the time of the referendum, reiterating the association’s recent report on the issues.

The evidence came during two hours of hearings earlier this week to the committee, where once again experts stressed the complexity around pensions in the event of independence. Another of the witnesses, Ronnie Bowie, senior partner at Hymans Robertson, told the committee that implementation of any system agreed would be extremely difficult.

“To get an implementation plan to cover all the scenarios is extraordinarily complex and expensive. It is a bit like building an NHS," he warned.

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