A row broke out yesterday after David Cameron expressed his astonishment at the first minister’s demand for a guarantee on future Scottish funding.
Following the launch of the independence white paper, Alex Salmond wrote to Downing street asking what would be the implications of a No vote for independence on Scottish public finances.
He asked for a “guarantee” that no future Westminster government would “scrap or review” the Barnett formula, which determines how money is allocated, or cut Scotland’s share of spending.
Mr Salmond has latched on to comments by Gerald Holtham, chairman of a commission into Welsh finance, that replacing the Barnett formula with one similar to the one used for England would result in a £4billion loss for Scotland.
SNP campaign strategy has consisted of promising benefits with independence, while warning of harm in the event of a No vote.
Mr Cameron’s letter to Mr Salmond refers to a study by the Institute of Fiscal Studies that found even with the most optimistic scenario an independent Scotland would have to increase taxes or cut spending by £3billion.
He said: “Your request for guarantees in perpetuity about the future is quite astonishing; I can no more bind future UK Governments than you can bind future Scottish Governments.
“What I can say is that reform of the Barnett formula is not on the horizon.”
Deputy First Minister Nicola Sturgeon said Mr Cameron “had let the cat out of the bag”.
“His comments on what is ‘on the horizon’ for the Barnett formula give the game away completely because it is what is just over the horizon that people should be concerned about,” she said.
North-east Labour MSP and director of the pro-UK Better Together campaign, Richard Baker, said: “What we do know is that there would be no Barnett formula if Scotland votes to separate from the UK, which would create huge uncertainty for public spending and the future tax regime for our oil and gas industry which is so vital to the north-east.”
Scottish Liberal Democrat leader Willie Rennie MSP said: “The Nationalists are now resorting to scare tactics in attempt to win votes for their independence plans.
“This letter makes clear that it is Alex Salmond and Alex Salmond alone who is trying to put about the heebie-jeebies over the future of Scotland’s funding formula within the UK.”