Scotland's immigration policy would be "a complete nightmare" if it became independent, according to the Scottish Secretary.
Scottish Government economists advise that Scotland needs more immigrants to balance the strain of an ageing population, but this could lead to "a vastly divergent immigration policy" from the rest of the UK, Michael Moore told business leaders in Dunfermline.
He also dismissed suggestions from a former Scottish Office adviser that the UK Government is "likely" to shelve plans for further devolution if Scotland votes No to independence.
Some experts advise that Scotland would be forced to sign up to the Schengen passport-free travel area if it becomes an independent member of the European Union. This in turn would require checkpoints at the border with England, it has been argued, as the UK has a long-standing opt-out of Schengen and the right to check passports upon entry to the country.
The Scottish Government dismisses these claims and says it will negotiate to keep the opt-out of Schengen but also points to the free-travel agreement between the UK and Republic of Ireland.
According to Mr Moore, this agreement, designed to allow free movement between Northern Ireland and the south, only works because the UK and Ireland have similar immigration policies.
"Schengen applies on the continent and enables the free movement of citizens without passports in return for certain guarantees on external border controls," he said.
"There are common travel areas between northern and southern Ireland but in terms of immigration, that is basically practicable because we work hard together and our policy terms are very much aligned.
"For Scotland to negotiate its way out of Schengen is a big ask but if we have some kind of common travel area, that is completely at odds with what I hear from the policy intent that Scotland would have a different immigration policy."
The Scottish Government's Council of Economic Advisers says population growth leads to a larger working-age population and has the potential to increase the size of the economy, but also says that this cannot be achieved by births alone at the current rate.
Mr Moore said: "You just can't have a vastly divergent immigration policy without a strong border. I represent more of the land border with Scotland than anybody else in Parliament and I can tell you that it would be a complete nightmare."
Mr Moore helped steer the Scotland Act through the UK Parliament last year, legislation for devolution which he describes as "the biggest transfer of powers since the Act of Union".
He said he is "confident" that Scotland's devolution journey will continue after the referendum.
But economist Gavin McCrone, who spent two decades as chief economic adviser to successive secretaries of state for Scotland, has said that the UK Government is "likely" to shelve plans for further devolution if Scotland votes No.
In a book released tomorrow, Mr McCrone writes: "If independence is rejected, there is a real danger that politicians at Westminster and officials at Whitehall may think that they can put away the files and not worry about Scotland any more.
"Proposals for increased devolution might then be shelved. That is quite a likely outcome but would be a huge mistake."
Mr Moore said: "As a Liberal Democrat, I am absolutely committed to transferring more powers from London to the Scottish Parliament. I was part of delivering the biggest transfer of powers to Edinburgh in last year's Scotland Act.
"I don't think you can put this debate away. I think it is encouraging that all parties who are in favour of Scotland remaining in the UK are all talking about those further powers.
"As Liberal Democrats, we have already been making the case for those further powers and I think people in Scotland will expect that."
SNP MSP Annabelle Ewing dismissed the Scottish Secretary's remarks as "more nonsense" from the anti-independence campaign.
"Not only does the UK share a Common Travel Area with the Republic Ireland, which sets its own immigration policy, but the UK is actually deepening the Common Travel Area with Ireland by even developing common visas," she said.
"While Mr Moore is peddling silly scares at Scotland, his own Government is pursuing the exact opposite policy towards Ireland. No wonder people are beginning to laugh at Project Fear.
"Scotland will be in the Common Travel Area involving the UK, Ireland, the Channel Isles and Isle of Man, not the Schengen area, and why on earth would any Westminster Government want to inconvenience its own citizens by having it any other way?
"Independence means having the powers we need in Scotland and a new relationship of equality with our friends and neighbours south of the border, including sharing arrangements where that makes sense such as currency and head of state. That is the best of both worlds."
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