Claims from Work and Pensions Secretary Iain Duncan Smith that an independent Scotland could not afford to pay its welfare bill were today branded “offensive, nonsensical rubbish” by First Minister Alex Salmond.
Mr Duncan Smith is expected to say in a speech in Glasgow that a break-up of the Union would leave Scotland unable to meet the cost of getting people into employment or adequately supporting those who cannot work, without cutting services or raising taxes.
Welfare spending is 6% higher north of the border, and any additional income to the Scottish Government from North Sea oil and gas revenues would not be enough to meet the costs, the Work and Pensions Secretary was due to say.
But his claims were branded "scaremongering" by the Scottish National Party.
Mr Salmond, who was in London today for talks with Prime Minister David Cameron and leaders of other devolved administrations, said Mr Duncan Smith had got his figures wrong.
The First Minister told BBC News: "We contribute 9.6% of the UK's taxation, with 9.3% of the spending and just over 8% of the population.
"That is a relative surplus of about £2.7 billion in 2010/11, or £500 for every man, woman and child in the country.
"The welfare bill is not financed out of North Sea oil, it is financed out of general taxation."
Mr Salmond said that a Scottish Parliament committee heard yesterday from a blind man who said he was being "reduced to penury" by welfare cuts introduced by Mr Duncan Smith.
"The man responsible for that has got the audacity to come to Scotland and tell us we couldn't afford to have a compassionate and proper welfare protection," said the First Minister.
"We could have less borrowing, more spending and we would certainly be able to sustain a position where we didn't reduce people with blindness to penury, as Iain Duncan Smith is currently doing in Scotland."
Speaking ahead of today's address to the Welfare to Work Scotland conference, Mr Duncan Smith said: "Due to the reliance on the old heavy industries in many parts of the country, it makes perfect sense that we need to spend more money per head of population on welfare support in Scotland. I have no problem with that.
"Thankfully, due to the United Kingdom and the commitment of the Westminster Government, we are able to ensure that money brought in, whether it be from the City of London or from North Sea oil, can be pooled and directed to wherever it is needed most.
"If the unthinkable were to happen, a Scottish Government would face a very stark choice of raising taxes or cutting services. This is not scaremongering, it's reality."
He said the new universal credit will make a "radical" difference to getting people back into the workplace in Scotland and the rest of the UK. Under the scheme there will be a single monthly benefit payment, rather than weekly or fortnightly as at present, for people looking for work or on a low income.
To be launched next year, it will replace income-based jobseeker's allowance, housing payments and other benefits.
Mr Duncan Smith insists it will help the poorest and has dismissed claims the change will push low-income families into debt.
"In many ways Scotland will benefit more than other parts of the UK when universal credit comes in. A larger percentage of people will see an increase in their income through moving into work or taking on more hours," he said.
"I do not believe the picture that some people paint of Scottish towns dependent on welfare. Every time I come here, I meet people who are determined to get into work who, with the right help, are desperate to get off benefits, support their family and set an example for their children.
"I firmly believe that universal credit and the changes we are bringing in will help change the outlook for thousands of families and, as a result, towns and communities across the country."
The welfare changes will see the introduction of the personal independence payment (PiP) to replace disability living allowance.
PiP is based on an assessment of an individual's need, focusing on their ability to do a range of daily activities.
The Scottish Parliament's Welfare Reform Committee heard yesterday the fears of disabled people about the new payment.
Henry Sherlock, 50, who is blind with chronic heart disease, said: "The questions and the weightings are all in favour of removing support rather than providing financial support.
"I fear that I will have to go through another witch-hunt in order to apply for this benefit."