Voting For A New Britain: Independence `would yield pounds 3.3bn profit'

SCOTLAND COULD build up a pounds 3.3bn financial bonus within five years if it broke away from England, the Scottish National Party said yesterday as it published details of its spending plans.

Labour, which has said that independence could mean a deficit of several billion pounds, immediately rebutted the claim. Tony Blair dismissed the document as a "false prospectus", and Gordon Brown, the Chancellor of the Exchequer, hosted a press conference in Glasgow to declare the SNP "unfit to govern".

The Foreign Secretary, Robin Cook, is also expected to attack the nationalists today, highlighting the costs of establishing a separate Foreign Office. Labour will spend much of next week trying to pull the document apart.

The SNP's economic strategy for independence came under fire at its launch when its spokesmen were forced to admit that they had omitted figures showing they might face a deficit of pounds 1.7bn in their first year.

The SNP said House of Commons figures had rated Scotland as the seventh richest in the OECD in terms of income per head. With an increasing share of the revenues from North Sea oil, Scotland's public finances would be healthy if it became an independent country, the document said.

The SNP said it would take Scotland into the euro at the same time as the rest of the UK, and would easily meet the entrance requirements. Scotland would not abandon the pound, but would remain part of sterling until it entered the euro, the party said.

Figures published by the party assumed an independent Scotland would be allowed to break away without taking on any portion of the UK's national debt. A best-case scenario showed Scotland holding a pounds 1bn surplus in 2000-2001, rising to pounds 3.3bn by 2004. A worst-case scenario showed a surplus of pounds 1bn by 2004, but did not highlight the fact that an independent Scotland could start out with a pounds 1.7bn deficit.

The party rejected claims that start-up costs and the loss of economies of scale within the UK would cause problems.

Launching the document, the SNP's leader, Alex Salmond, said Scotland had the ability to build a successful economic future as an independent country. The 33-page document was the most detailed produced by any party in this election, he added.

Mr Brown said it would mean higher taxes, job losses and disinvestment. "On Monday Mr Salmond claimed there was no deficit. Today after 14 questions the admission came that the deficit was pounds 1.7bn," he said. "There is a huge black hole in their policies for divorce."