Scottish independence: ‘Expect cuts every year’

Lib Dem Chief Treasury Secretary Danny Alexander. Picture: Greg Macvean

In the speech, which has been dismissed as “more project fear” by the Yes campaign, Mr Alexander, who described himself as “a proud Highlander and patriotic Scot”, claimed that independence would erect barriers for Scotland, make shopping more expensive and leave a black hole in Scotland’s finances.

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It comes as leading American economist Adam Posen warned that independence will “hit the poor hardest” in Scotland in an exclusive article for The Scotsman.

Raising concerns over future oil revenues, Mr Alexander said: “Last year, we received £3 billion less revenue that the Scottish Government had predicted. They accuse the [independent] Office of Budget Responsibility (OBR) of being pessimistic – but in fact, since 2010 we have received 20 per cent less revenue than they have forecast too.

“This matters to all of us – because that gap is the money the SNP pretend will pay for public services in a separate Scotland. The money they pretend will pay for the NHS.”

He claimed that an independent Scotland will face a deficit double the UK’s, much higher interest rates and declining oil revenues, “so the black hole gets bigger and bigger and bigger every year.”

He also quoted the Institute for Fiscal Studies figures which suggest an independent Scotland would need an extra £6 billion cuts in year one alone - half Scotland’s NHS budget.

He said: “As Chief Secretary to the Treasury, I’ve been involved in working to balance a nation’s books after the deepest financial crisis in half a century.

“It’s not easy, and it affects everyone. But the end is in sight. Well whoever had my job in a separate Scotland would say my job had been a tea party by comparison.

“In an independent Scotland, the cuts would have to come year after year after year, with no end in sight.”