Experts at odds over economic 
risks to independent Scotland

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SCOTTISH nationalists have severely underestimated the economic risks of independence, a centre-right think-tank claims.

The Centre for Policy Studies (CPS), co-founded by former Conservative Prime Minister Margaret Thatcher, pointed to a £13.8bn hole in an independent Scotland’s budget.

YES campaigners demonstrate outside the BBC building in Glasgow

YES campaigners demonstrate outside the BBC building in Glasgow

It outlined three “major risks” including oil revenues falling £3.2bn short of the £6.9bn predicted by the Yes campaign by 2016-17 and the probable flight of a large chunk of the financial services sector from Scotland leaving coffers £9.2bn adrift.

The rising cost of public sector pensions would heap further pressure on a budget “already straitened by declining oil revenues and the probable haemorrhaging of tax revenues from financial services”, the CPS added.

However a counter-view was offered yesterday by leading economist Joseph Stiglitz, who said there was “little basis” for “fear-mongering” over the economy of an independent Scotland.

Mr Stiglitz said while there would be risks in the event of a Yes vote, the risks of Scotland remaining in the union and the UK leaving the EU would be “significantly greater”. In a newspaper article he urged Scots to focus on “vision and values” in the last few days before the crucial vote.

He was responding to fellow Nobel prize-winning economist Paul Krugman, who recently warned Scotland would face “huge risks” going it alone telling Scots to “be very afraid”.

Mr Stiglitz said: “There is, in fact, little basis for any of the forms of fear-mongering that have been advanced. Krugman, for instance, suggests that there are significant economies of scale – a small economy is likely, he seems to suggest, not to do well.

“But an independent Scotland will still be part of Europe, and the great success of the EU is the creation of a large economic zone. By an order of magnitude, far more important than size is the pursuit of the right policies.”

Meanwhile, up to 1,000 Yes supporters held a demonstration outside BBC Scotland’s headquarters yesterday in a protest over the broadcaster’s coverage of the referendum. They marched from the city centre to the BBC’s Pacific Quay offices in Glasgow, claiming the corporation’s reporting has been “biased” against independence.

As polls indicate the vote on Thursday remains too close to call, Scotland’s First Minister Alex Salmond claimed the independence vote was a “once in a generation” opportunity – and pledged not to bring back another referendum if Scots choose to remain in the UK.

New polls show a slim lead for the No camp, although an ICM poll put the Yes camp in front by 54 per cent to 46 per cent. However, it had a smaller than usual sample size of 705.

Mr Salmond said: “Harold Wilson famously (said) one vote is enough in a referendum but we’re not aiming to win by one vote, we’re aiming to achieve a substantial majority if we can.”

He added: “In my opinion, and it is just my opinion, this is a once in a generation opportunity for Scotland.”

On the same programme Better Together’s leader Alistair Darling claimed he did not accept that Scotland was on a path to full independence, regardless of Thursday’s outcome, and said: “The one point that I do agree with Alex Salmond is that I think on Thursday we’ve got to decide this for a generation.

“I don’t know of anybody who actually wants to go through another two-and-a-half year referendum.”

Specialist referendum coverage from The Scotsman, sister newspaper of The Yorkshire Post