Humza Yousaf has insisted he is not promising “rivers of milk and honey” in an independent Scotland as he took aim and both the Tories and Labour in a keynote speech on the economic case for ripping up the Union.

The First Minister set out his vision for the economic case for independence in a speech at Glasgow University, pointing to research from the Resolution Foundation as he argued Scots would be better off after independence.

The study suggested that the average household would be £8,300 better off if the UK had the average income inequality of similar countries.

Using the same analysis for Scotland, Mr Yousaf said: “The prize for the typical Scottish household would be even greater, they would be £10,200 better off.

“That then, is the huge prize of independence.”

Mr Yousaf repeated the strategy set out by Nicola Sturgeon in her last SNP conference speech in 2022 that an independent Scotland would fuel its economy by using oil revenues and borrowing for a £20 billion investment fund.

Speaking to journalists, the First Minister said that “the revenues for oil and gas can help us drive the urgency in that transition to net zero technology”.

He added: “The oil and g sector will play an important role in Scotland’s future.

"No matter what your policy happens to be on oil and gas, it’s a declining basin and therefore transition is in our economic interests as well as the planet’s interests.”

In his lengthy speech, the FM pledged that an independent Scotland would see “large-scale public investment in key areas of competitive advantage”, as well as a Government department focused on industrial policy.

The First Minister said the UK’s living standards are “abnormally low” and the country is the “poor man of north-west Europe”.

He added: “Far too many people in Scotland (and) right across the UK are losing hope.

“They look at Westminster and they see no-one that is offering them a different choice.

“Just more of the same decline, but perhaps managed more competently than the current Tory Government.”

Taking questions after his speech, Mr Yousaf said the economic changes in an independent Scotland would not happen overnight.

He said: “I’m not selling independence as being an overnight change, that somehow the day after we become independent there will be rivers of milk and honey and the manna will fall from the sky.

“There will be challenges, of course, there will be difficulties. It will be a transitional process.”

In contrast, he said the UK’s economic problems are “hardwired, it’s systemic”.

Mr Yousaf suggested that by choosing independence, Scotland will enjoy “higher living standards for the people of this country”.

He argued that independence “is urgent and indeed it is essential”, adding that “the low growth, high inequality, Brexit-based UK economy cannot provide long-term economic security or indeed opportunity”.

The FM said that for Labour and the Conservatives, “Westminster political interests will always over-ride Scottish economic interests”, branding it “a major problem”.

Mr Yousaf warned that without independence, Scotland faced being “locked into a failed UK economy”.

He added: “And for most people the UK economy, run by Westminster, has indeed failed.

“Continuing to put faith in failed Westminster economic policymaking model, I would argue is letting people in Scotland down.”

The First Minister pointed to “three foundations for a successful industrial policy” for an independent Scotland – joining the EU, setting up a “dynamic government ministry to drive industrial policy” and “large-scale public investment in key areas of comparative advantage”.

He claimed that the UK was “abnormal in respect of its poor economic performance compared with its peers”, adding that “living standards are also abnormally low”.

But the Conservatives described Mr Yousaf’s speech as “delusional”.

The party’s chairman, Craig Hoy, said: “The First Minister’s case for ripping Scotland out of the UK rests on myths, fantasy economics and the fanciful hope the public forget that last month’s disastrous tax-and-axe budget was the product of years of waste and dismal growth under the SNP.

“He has the powers to improve the lives of Scottish workers now but instead has chosen to make Scotland the highest taxed part of the UK, damaging our competitiveness.

“Humza Yousaf is a weak leader in charge of a feuding, scandal-ridden party, which is why he is banging on about the one issue they agree on – breaking up the UK – and ignoring the country at large.”