Scottish Independence: report warns austerity looming outside the UK

An independent Scotland would quickly amass "unsustainable levels" of debt and would need embark on a fresh wave of austerity, a new report has found.

Nicola Sturgeon wants to hold a second referendum next year

The Oxford University Study warns that figures released this week setting out a £12.6 billion black hole in Scotland's public finances present a "major challenge" for the SNP's plans to leave the UK.

Read More

Read More
Read more: Scotland could prosper if independent, says Finance Secretary, as £12...

Sign up to our daily newsletter

The i newsletter cut through the noise

It revealed that Scots enjoy public spending levels £1661 higher per head than the UK average - despite paying an average of £307 less in tax.

Professor Gallagher, a former adviser to ex-Labour Prime Minister Gordon Brown, states in a report entitled "Arithmetic and Independence" that Scotland would lose out on "fiscal transfers" which currently cushion the impact of the £12.6 billion gap between spending on public services like schools and hospitals and the taxes raised to fund them.

"Scotland’s fiscal position, set out in GERS, presents a major challenge for the independence movement," it warns.

The GERS report revealed Scotland's deficit has come down to 7% as a share of GDP - but this is six times the UK rate.

The report adds: “Any more realistic look at the Commission’s approach, starting from Scotland’s actual fiscal position, swiftly shows that the newly independent country would quickly amass unsustainable levels of debt, and the cost of servicing it would require large cuts in public services."

Nicola Sturgeon is seeking to hold a second referendum on independence next year, but the latest findings were seized on by opponents.

Tory finance spokesman Murdo Fraser said: “In 2014, Alex Salmond promised oil would pay for separation. Now everyone knows that’s nonsense, Nicola Sturgeon’s replacement plan is to break the bank and borrow billions to try and cover the cost."

He added: “Five year on from the independence referendum, the SNP is still scamming voters with promises from the magic money tree. The cost for us all would be immense."