PROACTIVE economics could put an independent Scotland on an even footing with the rest of the UK from the first day of it becoming independent, according to a new model aimed at replacing GERS figures.

The annual economic report has been cited by pro-Union campaigners as evidence of Scotland’s inability to go it alone.

The figures are calculated by taking the Scottish Government’s budget on devolved areas and adding what the UK Government spends and raises on Scotland’s behalf on reserved matters.

According to the latest report, Scotland’s finances are among the worst in Europe, with a £14.8 billion gap between spending and revenue.

Published in August, it put the country’s deficit at more than double the UK average and presented the nation’s fortunes as worse than those of Greece.

The figures were seized upon by pro-unionists, with Lib Dem leader Willie Rennie saying: “The nationalists’ case for independence has been swallowed up by £14bn black hole.”

However, earlier this month, Deloitte and the policy group Reform cast doubt on the validity of the figures, saying the Scottish Government’s approach to spending and public-sector reform had continued to diverge from the rest of the UK.

Now research by the Common Weal think tank offering an alternative to GERS claims “modest” and “conservative” recalculations would allow the fledgling state to achieve “deficit parity” with the rest of the UK.

Part of the organisation’s ongoing White Paper series, which leads to a draft White Paper for independence early next year, the report bases the budget of an independent Scotland on the probable priorities and spending of an autonomous government in Holyrood, instead of transferring Westminster’s agenda.

This approach means the £3bn defence costs predicted by GERS are reduced to £1.95bn by supposing Scotland’s set-up is “in line with [that of] modern European nations”.

Meanwhile, closing tax loopholes to reduce the amount lost to the system would bring in up to £3.5bn, according to “modest” estimates, and a negotiated settlement over UK pensions liability would save the same sum.

The results, which do not include tax hikes or reliance on oil and gas, are said to represent a “ground-up construction of a first-year independence” budget.

Director Robin McAlpine said the results make “a robust and inspiring case” for constitutional change. He said: “The independence movement has been too passive on Scotland’s finances and particularly GERS.

“There is no question Scotland could produce a budget to operate as an independent country with our current levels of public services and a perfectly manageable deficit. We’ve let anti-independence voices make all the running and we’ve been far too defensive.

“The health of public finances is crucial to winning an independence referendum and we don’t have forever to get on the front foot. With this report we think we’ve reached deficit parity with the rest of the UK without cuts to anything other than defence.”

The paper, titled Beyond GERS, is the latest to be authored by scientist Dr Craig Dalzell. His previous report on currency options was applauded by a range of experts.

He said: “Whilst GERS may offer a reasonable, though still limited, snapshot of the financial health of Scotland within the United Kingdom, even major analysts like Deloitte now recognise that it says nothing about the finances of an independent Scotland, and the debate surrounding Scotland’s constitutional arrangements is ill-served by continuing to assume otherwise.

“By attempting to account for the economic and financial impact of the necessary changes which will come as a consequence of independence, such as the relocation of currently reserved government functions to Scotland, this ground-up construction of a first-year independence budget demonstrates that the act of independence will result in several billions of pounds’ worth of savings and additional revenue, paving the way for Scotland to reach deficit parity with the current UK budget or to improve even further.

“It is important for the independence debate that those involved expand their thinking about Scotland beyond the picture of the situation within the UK. It is time to start thinking beyond GERS.”