AN independent Scotland would quickly amass “unsustainably high levels of debt” as it borrowed to maintain services currently supported by transfers of money within the UK, an Oxford academic has claimed.

In a paper from Nuffield College on the “arithmetic of independence”, Professor Jim Gallagher also said it would take four years for the Scottish economy simply to recover from the disruption of leaving the UK.

The analysis draws on the Government Expenditure & Revenue Scotland (GERS) figures and the SNP’s Growth Commission.

Published on Wednesday, the GERS 2018/19 report showed the gap between tax revenues and public spending in Scotland was -£12.6bn last year, or 7 per cent of GDP. The UK deficit was just 1.1% of GDP.

GERS also showed “fiscal transfers” within the Union were £1968 per head to Scotland’s benefit, with public spending £1661 per head higher than in the UK, despite tax revenue per head lagging £307 behind the UK.

SNP Finance Secretary Derek Mackay stressed GERS reflected the current constitutional settlement and did not show how Scotland’s might improve after independence.

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However, Prof Gallagher, a former civil servant who advised Better Together in 2014, said GERS did show Scotland’s “inherited expectations and obligations” and the service levels voters expected after a Yes vote, even without the taxes to pay for them.

He said that, despite the Growth Commission prioritising deficit reduction and prudence, the upshot would be massive government borrowing to fill the hole left by Treasury transfers.

Servicing this debt would then lead to spending cuts and austerity, he said, arguing the SNP’s case for independence was characterised by “deliberate over-optimism”.

He also said the Commission failed to offer specific growth policies, failed to cost a new currency arrangement, and failed to cost for trade barriers with the rest of the UK caused by Scotland being in the EU after Brexit.

He said: “Scotland’s fiscal position, set out in GERS, presents a major challenge for the independence movement. Losing fiscal transfers of around 7% of GDP would be an immediate impact of independence.

“The Growth Commission... assumes that while Brexit is economically damaging to Scotland because of the barriers to trade with the EU it will create, independence will create no such barriers to trade with the UK (even though Scotland is inside the EU trading system). This is having your cake and eating it.

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“The newly independent country would quickly amass unsustainable levels of debt, and the cost of servicing it would require large cuts in public services. The price of over-optimism would be a very heavy one.”

Tory MSP 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.

“As this authoritative Oxford university study makes clear, it won’t. Instead, we’d have to slash spending on school, hospitals and the police.

““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.

“Not only is the SNP failing to be straight with people, Nicola Sturgeon is now trying to ram through a second independence referendum as early as next year.

“She must listen for once – dump indyref2 and instead focus on getting Scotland’s economy back on track.”

A spokesperson for Mr Mackay said: “Scotland has stronger public finances than much of England, Wales and Northern Ireland - with the UK-wide figure massively skewed by London and the south-east.

“GERS also shows our deficit reduction ahead of the Growth Commission’s projections. The Tories sound more rattled by the day, because they know they are losing the argument. Their No-deal Brexit plans threaten to shatter Scotland’s economy – and any Brexit would be deeply damaging.

“That’s why more and more people back independence and support holding a referendum.”