ALEX SALMOND, Scotland’s nationalist first minister, may have felt things were going well. He has been polishing his plans to show Scots that they can be richer, and escape Westminster’s austerity, by choosing independence in the referendum in September 2014. On November 15th EnQuest, an Aberdeen-based British oil firm, announced that it was going to spend £4 billion ($6 billion) bringing a 140m-barrel oilfield into production in 2016, just in time (assuming a Yes vote) to start paying taxes to a newly sovereign Scotland.

On November 18th, however, the Institute for Fiscal Studies (IFS), a non-aligned think-tank, published a study looking at the prospects for an independent Scotland’s tax revenues and public spending over the next 50 years. It analysed three scenarios, including the one predicted by Mr Salmond: that oil revenues will be healthily buoyant over the next decade, that Scotland will get a generous deal when Britain’s national debt is divided up, and that it will not pay any more for government borrowing than Britain does. It also assumed increased productivity and a tripling of net migration, to 26,000 a year.

Alas for Mr Salmond, this would not work out well. Assuming a relaxed austerity target of trimming national debt to 40% of GDP by 2062-63, the IFS says Scotland would need to narrow the gap between taxes and spending by the equivalent of 1.9% of national income—twice as wide as the 0.8% fiscal gap it says Britain faces. Reducing defence spending from the current notional £3.3 billion (as part of the United Kingdom) would save 0.5%. So the IFS thinks another £2 billion has to be found, either by spending cuts, raising basic-rate income tax by 6p, or lifting the VAT rate to 25%. That would fall on top of the tax rises and spending cuts being made by George Osborne, the chancellor of the exchequer.

In bleaker circumstances—lower oil production, a bigger share of the national debt, higher interest charges and lower gains from productivity and migration—Scotland’s fiscal gap could become a 6.3% income chasm, requiring tax rises or spending cuts of £9.4 billion.

Nationalists disagree. Oil wealth, they say, would make Scots the eighth-richest people in the world, with per person GDP of £26,000 ($42,000). Britain would be in 16th place with £22,000.

True, says the IFS, but Scotland’s population is growing more slowly and ageing faster than the rest of Britain’s. Fewer working people means a smaller tax base paying for a large elderly population.

Mr Salmond agrees there is a demographic burden. But, he adds, independence would enable Scotland to ditch “one-size-fits-all” economic policies that stall business growth. Corporation-tax cuts could counteract the pull of London. Investment and innovation incentives might forge a Scottish version of Germany’s medium-sized manufacturers, while better air links (achieved by cuts in passenger duty) should boost exports.

Opponents are scornful. Mr Salmond claims the best response to the think-tank’s warnings is to promise unfunded business-tax cuts, says Alistair Darling, the former Labour chancellor running the vote-No campaign. The battle for economic credibility is part of a bitter tussle over the effects of independence. Most recent polls shows the No supporters winning by a margin of slightly less than two to one. The new fiscal warning has further reduced Mr Salmond’s chances of turning that round.