An independent Scotland would be forced to cut services and/or increase taxes, according to an economic think-tank report.
The Institute of Fiscal Studies said falling North Sea oil revenues and an ageing population will put the squeeze on government finances leaving Scotland with a bigger fiscal gap than if it remained within the UK.
Pro-union campaigners clamed the report left the SNP case for independence in “tatters”, but Scottish Finance Secretary John Swinney said it underlined the case for independence.
The report said the exact size of the problem depended on a number of factors. But even under the “most optimistic scenario” the Scottish fiscal gap would be 1.9% of national income (£3billion) compared to 0.8% for the UK as whole.
Director Gemma Tetlow, the report’s author, said an independent Scotland would face “even tougher choices” than the UK over the next 50 years.
“In 2011/12, higher public spending per person in Scotland was more than matched by higher revenues from activity in the North Sea,” she said.
“However, over the long term, revenues from the North Sea will probably decline and official population projections suggest that the average age of the Scottish population will increase more rapidly than for the UK as a whole, putting greater upward pressure on many areas of public spending.” Former chancellor Alistair Darling, leader of the pro-Union Better Together campaign, said: “This sober and impartial analysis by leaves the SNP’s economic case for independence in tatters.” Chief Secretary to the Treasury Danny Alexander said: “The IFS have today confirmed that the Scottish Government’s promises for an independent Scotland are too good to be true.
“Their independent analysis reveals that, even on the most optimistic scenario, an independent Scotland would require cuts almost two and a half times as deep than if they stayed in the UK.”
Mr Swinney said: “This report actually underlines the case for an independent Scotland with full control of its own economy and the ability to take decisions that can secure a more prosperous future.”
He claimed it was no surprise that a projection based on the UK’s economic projection showed a long-term deficit when the Office of Budget Responsibility states the economic strategy was “unsustainable” and the country will run a fiscal deficit in each of the next 50 years.