Scotland's Finance Secretary John Swinney has said that a report from the IFS, which forecasts higher taxes and deeper cuts, actually bolster's the SNP's campaign for Scottish independence:
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 stronger and more prosperous future for the country.
It is no surprise that projections based on the UK’s economic position show a long term deficit when the OBR state that the UK’s economic strategy is “unsustainable” and that the UK will run a fiscal deficit in each of the next 50 years ...
– john swinney, Scotland's Finance Secretary
The whole point of independence is to equip Scotland with the competitive powers we need to make the most of our vast natural resources and human talent and to follow a better path from the current Westminster system which stifles growth and which is responsible for the damaging economic decisions which this report – and its projections – are based on.
The Better Together campaign - which is making the case for Scotland to remain part of the UK - is tweeting extracts from the Institute For Fiscal Studies report:
– Gemma Tetlow, Programme Director, IFS
An independent Scotland would face even tougher choices than those faced by the UK over the longer term.
In 2011–12, higher public spending per person in Scotland was more than matched by higher revenues from activity in the North Sea.
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.
Public debt in an independent Scotland could exceed national income by the early 2030s, according to projections by the IFS.
A new report found that in order to avoid this, Scotland would need to implement "significant additional fiscal tightening".
– ifs report
Even under the most optimistic scenario we consider, the long-run 'fiscal gap' in Scotland would be 1.9% of national income compared to 0.8% of national income for the UK as a whole.
In order to bring debt down to 40 percent of national income over the next 50 years, it would need to increase taxes or make cuts worth £6 billion in today’s terms.
Scotland would likely face deeper cuts to public spending and increases in taxes over the long term if it became independent from the rest of Britain, according to a major new study.
The Institute For Fiscal Studies (IFS) compared models for the public finances of Scotland and the UK as a whole over the next 50 years.
It found that the fiscal gap - the difference between what the government collects and what it spends - would be at least twice as large in an independent Scotland.
The IFS said the difference was due to higher public spending in Scotland combined with declining revenues from fossil fuels in the North Sea.