* UK: Independence to make Scots 1,400 pounds a year poorer
* Salmond: Independence to boost Scottish GDP by 5 bln stg
* Dispute centres over oil revenue, administration costs
(Updates with pollster comment)
By Alistair Smout and David Milliken
EDINBURGH/LONDON, May 28 The debate over whether
Scots will be better off if they break away from the United
Kingdom intensified on Wednesday, as pro- and anti-independence
camps both claimed Scots would be at least 1,000 pounds ($1,700)
a year richer.
Scotland holds a referendum on Sept. 18 over whether to end
its 307-year union with England, and as that date moves nearer
the number of people who are still undecided exceeds the
majority who want to retain the union.
Some polling has suggested that the financial benefits of
being in or out could be the deciding factor for many voters.
Britain's deputy finance minister, Danny Alexander -
sensitive to criticism that the anti-independence campaign had
been too negative - said Scots would each be 1,400 pounds a year
wealthier if they stayed in the United Kingdom.
"By staying together, Scotland's future will be safer, with
stronger finances and a more progressive society," Alexander
said. "There simply wouldn't be the same level of resources
available for public services if Scotland were independent."
But Scotland's First Minister, Alex Salmond, also claimed
that Scots would be better off after independence, saying it
would bring benefits of around 1,000 pounds per head a year by
2029 as an independent Scotland had more power to attract
immigrants and boost its productivity.
"The latest figures show that by using the powers that only
independence will bring we can deliver an independence bonus
with increased revenue," Salmond said.
An opinion poll in January suggested that just 15 percent of
Scots would support independence if it would make them 500
pounds a year poorer, while a gain of 500 pounds would make 52
percent back independence.
"There was a strong correlation between relative affluence
and how people will vote. The extent to which parties can make
voter offers are essential to election outcomes," Martin Boon,
pollster with ICM, said. "If Scots are following anything very
carefully, then it is this number."
Alexander, who is the highest-ranking Scottish MP in the
British government, dismissed Salmond's claim as a "bogus bonus"
and likened him to a shopkeeper who could not tell customers how
much he would charge for his wares.
"Mr Salmond has to face up to the fact that what he is
proposing is a risky and costly endeavour. If you were buying a
product in the shops, you wouldn't trust someone who doesn't
tell you what the price is."
Convincing the public of the true cost or benefit of
independence is likely to be a major task for politicians.
One major area of dispute is the cost of setting up a new
government administration for Scotland. On Monday, Britain's
finance ministry said this could reach more than 1.5 billion
pounds - about 1 percent of gross domestic product - and
criticised Scottish nationalists for not giving a figure.
However, Patrick Dunleavy, a professor at the London School
of Economics, said on Tuesday that the finance ministry had
badly misrepresented his work by suggesting the cost of new
public bodies for Scotland could rise to as high as 2.7 billion
pounds if dozens of new public bodies were needed.
Instead, the total cost was more likely to be in the low
hundreds of millions of pounds, Dunleavy said.
"Mr Alexander's claims today don't have a shred of
credibility. The Treasury has been caught red-handed trying to
cook the books," said Scottish National Party lawmaker Jamie
Another area of dispute is revenues from North Sea oil,
which would be a mainstay of an independent Scotland's finances.
Scotland's latest North Sea tax receipts forecast pencils in
receipts of 6.9 billion pounds for 2016-17 - more than double
the 2.9 billion forecast by the independent Office for Budget
The Scottish government's central scenario assumes bigger
increases in production and lower extraction costs than the OBR,
as well as an oil price of $110 a barrel compared to the OBR's
forecast that they will fall below $100.
Some of the assumptions the Scottish government makes,
including the fact that production costs are unlikely to
increase in line with output, are contested by some industry
experts and the Westminster government.
Based on these receipts, the Scottish government on
Wednesday forecast that it would run a budget deficit of 2.8
percent of gross domestic product in 2016-17, similar to the
2.5-3.2 percent range it estimated in November.
The deficit for the whole of Britain at the same time is
forecast by the OBR to be 2.4 percent of GDP. The Scottish
government said it could be higher if the opposition Labour
Party wins power in a UK-wide election in May 2015.
The Scottish government's deficit figure is based on it
taking a share of the United Kingdom's public debt linked to its
population, while Salmond hopes to take less.
Even so, a 2.8 percent deficit is far below most other
estimates which take a gloomier view of Scotland's ageing
population and reliance on diminishing oil wealth.
The Institute for Fiscal Studies, a London think tank,
estimates Scotland would have a deficit of 5.2 percent of GDP at
independence. U.S. bank Citi forecasts a 5.5 percent shortfall.
($1 = 0.5952 British pounds)
(Additional reporting by William James and Karolin Schaps in
LONDON; Editing by Susan Fenton/Jeremy Gaunt)