UK says breakaway Scotland would struggle to pay welfare bill

By William James LONDON (Reuters) - Scotland will feel the strain of a rising welfare bill that could put vulnerable social groups at risk if voters choose to break away from Britain later this year, a British government study said on Thursday. Ahead of a September 18 independence referendum, the British government's campaign to keep a 307-year union with Scotland intact is battling to hold on to a shrinking poll lead over nationalists, who say that a split would give Scotland the freedom to create a fairer and more prosperous nation. The nationalists accuse London and its Scottish supporters of running a scare campaign on the currency, European Union membership and public finances to frighten the 5.3 million Scots into staying in the United Kingdom. Britain argued in the latest of a series of reports opposing independence that Scotland is better off as a result of its ties to the rest of the country because the current union gives Scots access to a more diverse and stable public purse. Welfare spending per head in Scotland was 2 percent higher than the national average in 2012/13, it said. "Proposals by the Scottish government would risk the wellbeing of vulnerable people who are currently supported by this system," said Work and Pensions Secretary Iain Duncan Smith. The report said an independent Scotland would face rising costs - as much as an extra 1.55 billion pounds per year over the next 20 years - to pay for looking after an ageing population and to account for changes in benefit rules that nationalists have promised. "On top of the ageing population - which is increasing faster in Scotland than the rest of the UK - the Scottish government are committing to spending even more on wider welfare without saying how they'll pay for it," Duncan Smith said. Polls show the "no" campaign still in the lead but the independence camp has steadily gained ground, narrowing the gap significantly. Thursday's paper is the 14th in a series of analyses released by the government, which have so far covered topics like energy, defence and financial services, with all arguing that Scotland would be less secure as an independent country. On Tuesday, former British Prime Minister Gordon Brown, a Scot, previewed the latest study, warning of a pensions "time bomb". He put the costs of a new pension and benefits system at 1 billion pounds. The Scottish National Party accused Brown of repeating "economically illiterate" claims made by the UK's ruling coalition a year ago.