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Set-up cost of independence £1000 a family, says Treasury

THE referendum debate will this week become a battleground of statistics as politicians in London and Edinburgh produce figures which aim to show how much Scots would be better off sticking with the Union and how much they would be better off opting for independence.

The Treasury will unveil its final analysis paper on Wednesday as it presents the so-called "Union Dividend"; the amount of money each Scottish household benefits from being part of the UK, expected to run into several thousands of pounds over two decades.

But the Scottish Government will produce its own set of figures, also on Wednesday, to show how Scots will benefit from what it calls the "Independence Bonus".

Ahead of the SNP administration publishing its own forecasts and projections, John Swinney, the Finance Secretary, said: "The debate over Scotland's future is now firmly between those who choose to talk down Scotland's potential and those of us who know that with the wealth- creating powers of independence we can take our natural resources and our human talent and build an even stronger nation."

The competing visions are today wrapped in more claims and counter-claims with accusations of deception on both sides over the set-up costs of an independent Scotland.

The Treasury argued, in the lack of any detail from Edinburgh, that its economists had calculated that the "set-up surcharge" could be £1000 a Scottish family, a calculation described as bogus by Alex Salmond, who called on Whitehall to withdraw it.

In its analysis, the Treasury points to a study ahead of the independence vote in Quebec when it was estimated 1% of GDP would be needed to establish the systems to run a newly independent country; in Scotland's case, 1% represents a "£1.5 billion tax bill, equivalent to £600 per household".

The Treasury goes further, pointing to studies by the Institute for Fiscal Studies and the London School of Economics, which calculate that to establish a policy department would cost £15m. Applying this, says the analysis, to the "180 departments" the Scottish Government says it would need in an independent Scotland, this "could see Scottish taxpayers fork out £2.7bn" - around £1000 per household. Danny Alexander, Chief Secretary to the Treasury who will launch Whitehall's final analysis paper in Scotland, said: "The Scottish Government is trying to leave the UK but it won't tell anyone how much the set-up surcharge is for an independent Scotland.

"As part of the UK, Scotland gains from a strong and stable tax and benefits system and our comprehensive analysis, published this week, sets out how much better off Scottish taxpayers are; that's why we're better off together."

But the First Minister hit back, insisting the Treasury analysis had crumbled under scrutiny, pointing out UK Government sources had admitted the reference to 180 departments had been a "drafting error"; it should have been 180 public bodies.

"The analysis," argued Mr Salmond, "is deeply flawed and deeply misleading, given the ridiculous claim that an independent Scotland would need 180 government departments; that is something the Scottish Government has never claimed; the UK Government has only 24 departments."

He suggested the Treasury was guilty of a "horrendous blunder" or "a deliberate and deeply dishonest deception"; it meant its claims about the finances of an independent Scotland were without a shred of credibility.

"Either way they should withdraw these bogus figures," he said, adding: "Much of the infrastructure needed for an independent country already exists and Scottish taxpayers already pay their fair share for all devolved and reserved services while Scotland also stands to inherit a fair share of joint assets, valued at around £1.3 trillion."

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