SCOTLAND must act urgently on independence or risk squandering a “historic opportunity” to transform its economy by remaining part of the UK, a pro-Yes think tank has warned.

A new paper by Bottom Line, a think tank which makes the economic case for independence, said that the current high price of oil and Scotland’s “great natural advantages” in renewables could prove transformative for the country’s economy – but not within the Union.

Expert economist Graeme Blackett, who advised the Sustainable Growth Commission and authored the think tank’s report, said: “The opportunity is now. It’s a transition that’ll take a few years but we need to make a start now.

“We’ve got these renewable resources – the Scottish weather – and then we’ve got this opportunity that the high oil price is generating money that can be invested into the sector. The combination of those two things is very lucky and it’s not the sort of thing that gets repeated.”

The paper said: “Only a fully independent Scottish Government would have the range of powers required to design and execute the necessary policies. Under devolution, Scotland lacks these powers, while the UK Government has shown no interest in developing the Scottish economy.”

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Blackett added: “The oil prices at the moment mean that the fiscal position of an independent Scotland has drastically improved.

“Linked to that, it creates an opportunity to invest that windfall into renewable energy – it’s what the private sector are doing but it needs the Government to have the right policy framework to fully realise it.”

Drawing on recent research from the Institute for Fiscal Studies (IFS), the paper said that the oil price boom underway would help to bring down the deficit of an independent Scotland.

The IFS, one of the UK’s leading economic research centres, late last year said that higher oil and gas prices could help the Scottish Government buy time to “boost onshore economic growth and revenues”.

The Bottom Line’s report said that if the high price of oil was maintained it would avoid the future government of an independent Scotland from having to make tough decisions on public spending or taxation.

The report said: “Given that the IFS projections are for a fiscal deficit of around £3000 per person by 2027- 28, in the circumstances that the short-term benefits from high oil prices are not sustained, to reduce this to a sustainable level (of around £1100 per person), would not require Scotland to close the tax gap with the small success economies. It would require that only 40% of the gap would need to be closed.

“This demonstrates that addressing any deficit that an independent Scotland inherited from the UK is eminently achievable. There will not be a need to cut public spending or increase taxes to ensure that Scotland’s public finances are sustainable.

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“What will be necessary, will be to address the underlying cause, which is the underperformance of the UK economy, of which Scotland has been a part.”

The Bottom Line, founded by Blackett, economist David Simpson and former businessman and SNP MP Roger Mullin, blamed Scotland’s sluggish economic growth on its continued membership of the UK.

“Had the Scottish economy performed as well as the average small advanced economy in the last two decades it would have generated a fiscal surplus, even before taking oil revenues into account,” the report said.

“The Scottish economy grew so slowly because economic policy is reserved to Westminster and Scotland’s needs and opportunities are ignored.

“UK Government policy has been responsible, in large part, for the UK economy growing significantly more slowly over the last two decades than other comparable economies.”

The think tank advocated using oil and gas revenues to support the transition to a net zero economy by increasing state and private investment in renewable energy.

It said Scotland’s inclement weather was a boon to its renewable capacity, calling the opportunities possible through the transition to green energy “perhaps the biggest opportunity to transform the Scottish economy since the industrial revolution”.

The report also noted that while some measures to accelerate the transition to a green economy lay with the Scottish Government – most significantly, the ability to invest in education and training to support the skills needed in emerging green sectors – many, such as the ability to borrow to invest in renewables, still resided with the UK Government.

The report added: "The current high energy prices and Scotland’s renewable potential means that there is a historic opportunity to transform the Scottish economy.

“This opportunity will not be realised if Scotland remains part of the UK. Independence is essential for the economic policies required to be implemented.

“The political constraints of the UK mean the necessary policies will not be implemented by a Westminster Government led by either of the main UK parties.”

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Fiona Hyslop, the SNP deputy convenor of Holyrood’s Net Zero Committee, said Westminster’s climate policies were failing Scotland.

She told The National: “Westminster’s energy policy is plainly not working for people across Scotland and only independence can allow Scotland to ensure our energy resources work for everyone who lives here - Scotland has the energy, we just need the power to make it work for us.

“In a country as energy-rich as Scotland, it is crystal clear the only reason people are facing huge energy costs is because of decisions that have been taken to prioritise making energy policy work for big business, not people.

“But it does not have to be this way. Just like other small nations have already done, an independent Scotland could use the powers over energy policy that other countries have to make our energy resources work for our people whilst helping to meet our net zero ambitions."