Political rivals slug it out over cost of Scottish independence

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Scotland’s two governments have published conflicting reports on the economic impact of independence in a bid to persuade voters to back them in September’s referendum.

First Minister Alex Salmond declared it was a “watershed moment” in the campaign as he said people could be £1,000 a year better off in 15 years as a result of an “independence bonus”.

But Chief Secretary to the Treasury Danny Alexander branded that a “bogus bonus” as he said remaining in the union would give everyone in Scotland an annual £1,400 “UK dividend”.

The UK Government minister visited Edinburgh to make his case as the Treasury published a new report assessing the fiscal position of an independent Scotland over the period from 2016 to 2035-36.

At the same time Mr Salmond unveiled a rival publication which claimed an independent Scotland could be £5bn a year better off in 15 years’ time without having to raise taxes.

The London and Edinburgh administrations also clashed over figures which Mr Salmond claimed showed the Treasury had been “caught red-handed trying to cook the books”.

Analysis released in advance had cited a possible cost of £2.7bn for setting up a new state, but Professor Patrick Dunleavy, of the London School of Economics, told the Financial Times this was “bizarrely inaccurate”.

Mr Alexander insisted Prof Dunleavy’s work was not part of the Treasury report.

Meanwhile, the First Minister said no detailed work has been done by the Scottish Government to work out its own total figure for the cost of independence.

He said: “Westminster’s figures have been blown to pieces as they have been disowned by the very experts the Treasury were citing, while we have set out the positive case for an economically successful independent Scotland.

“Mr Alexander’s figures are in meltdown, and the Treasury have been left without a single shred of credibility.”

Mr Alexander argued that leaving the UK would mean lower tax revenues north of the border and increased public spending, as he challenged Mr Salmond to “come clean that there is a significant cost to setting up a new state”.

He said a separate Scotland could face higher interest payments on government debts, at the same time as it had to deal with declining oil revenues and an ageing population.