John Swinney has denied that Scottish independence would require austerity, despite warnings from the Institute of Fiscal Studies.

In an interview with the BBC, the First Minister said he did not accept the thinktank’s analysis.

During the election campaign, Mr Swinney has repeatedly referred to comments made by the IFS on Labour and the Conservatives.

Paul Johnson, from the thinktank said the refusal to hike taxes and the commitment to bring debt down implies “big spending cuts over the next five years.”

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Ahead of the 2021 Holyrood election, IFS director David Phillips said an independent Scotland would need to “cut its cloth to fit the size of its own purse”.

Speaking on the BBC’s Panorama programme if he agreed with the analysis, Mr Swinney said: “No, I don’t accept that.”

“I think anyone that looks at my track record, I was 10 years the finance minister of Scotland, and I ran a balanced budget.

“I knew how to control money, I knew how to raise revenue, I knew how to make sure we lived within our means.

“So, I accept that an independent Scotland would have to exercise financial stability and fiscal sustainability.

“All of those considerations have to be part of the discussion about independence, but it’s an obligation of government to make sure that’s done properly.

“Of course, part of what we’re wrestling with today is the fact that the United Kingdom government of Liz Truss spectacularly didn’t do that and caused the type of increase in mortgages that people are wrestling with in Scotland today.

“What the Institute for Fiscal Studies is saying in their analysis of Scotland’s finances, they look at Scotland’s finances within the United Kingdom, but they also accept, and I think it’s important to accept this, that as an independent country, we would have much more flexibility and manoeuvrability as a country to improve our economic performance.”

The First Minister claimed GDP per head had risen faster in Scotland than the rest of the UK since 2007, while the productivity gap has “substantially, if not entirely” closed.

He added: “What (being) an independent country allows us to do, and if you look at other small, European, independent countries, they’ve got stronger economic performance than the UK, and Scotland would be in a position to emulate that.”

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During the interview, he was also pushed on the SNP’s position on new oil and gas licences.

The Scottish Government's draft energy strategy includes a presumption against new drilling.

However, both Mr Swinney and his deputy Kate Forbes have said the party is not against further licensing, but that they must meet a "climate compatibility test.”

The First Minister told the BBC: “Well, what I'm saying is that there has to be an assessment to determine whether or not that any licence application is compatible with our climate obligations.

“So the Prime Minister has basically said he will licence 100 new projects. I think that is utterly irresponsible.

“That is climate denier status of the first order. So we've got to have a rational considered process to look at every application to determine whether it can be sustained and compatible with our climate objectives.”

Scottish Conservative candidate for West Aberdeenshire and Kincardine Andrew Bowie said: “John Swinney has finally let the cat out of the bag and admitted what we all knew – that the SNP has abandoned the North East.

“The SNP have sought to dupe voters in the North East into thinking they were having second thoughts on opposing new oil and gas licences. But John Swinney has made it clear that nothing has changed by doubling down on his party’s anti-oil and gas stance, which threatens tens of thousands of jobs.

“The Scottish Conservatives are the only party standing up for oil and gas workers and the crucial role they play in sustaining North East communities and our wider economy, energy security and just transition to net zero.

“Scots will also be dismayed to hear John Swinney cranking up his party’s independence obsession, instead of focusing on the public’s real priorities – like fixing our ailing public services and creating good jobs.

“The only way to stop the SNP pushing for another divisive referendum is to defeat them on July 4 and, in key seats across Scotland, that means voting Scottish Conservative.”