A Fresh Start with Independence

Part Two: What an independent Scotland could look like

Independence would be a fresh start for Scotland

A fresh start for Scotland’s economy

On independence, the Scottish Government would not simply make adjustments to the UK economic model to suit Scotland’s circumstances better.

Instead, independence would be about transformational change, and a fresh start for Scotland’s economy: the opportunity to establish a new Scottish economic model rather than being part of a UK model that does not work for Scotland.

A new Scottish economic model could take advantage of Scotland’s particular size, institutions, resources and strengths.

On becoming an independent nation state, all the economic powers currently under the control of the UK Parliament and UK Government would be transferred to Scotland.

Economic policy, particularly for a country of Scotland’s size, is not just a series of individual economic levers which can be pulled as appropriate, independent of each other.

Instead, independence would give Scotland the opportunity to establish an economic policy that was coherent, and focused on realising an overall vision for the kind of economy and society Scotland’s citizens wish to see.

We can see that Ireland and Denmark have pursued different models but both have been successful taking into account those countries’ particular economic, cultural, historic and social circumstances.

Scotland can do the same.

The Scottish Government believes that in a country of Scotland’s size, and with the strengths that Scotland has, a more consensual and dynamic approach to the economy is possible, where government, industry and workers come together to drive and steer the economy of the nation.

What Scotland could learn from Ireland

Ireland is in many ways a country like Scotland.

Looking at its recent economic success shows us how a nation can embrace its independence within the EU, and its ability to make the choices that serve its citizens best.

Professor Kevin O’Rourke, in his analysis of Ireland’s economic development as an independent country, argues that ‘a plausible candidate’ for Ireland’s economic underperformance in the period between 1954 and 1973—when Ireland joined the European Economic Community, the precursor to the EU—was “excessive reliance on the sluggish British economy”.

Ireland’s improved economic performance after 1973, even before the creation of the Single Market, coincided with its rapidly decreasing dependence on the UK for trade: “EEC membership led to a far more diversified Irish economy, less dependent on its immediate neighbour, and healthier as a result.”^[145]

This reduction in dependence can be seen in Table 1, where Irish imports from and exports to the UK fall considerably, while imports from and exports to the EU expand. Ireland’s success can be seen in its overtaking the UK in both GDP and National Income by the year 2000, with the gap in performance continuing to grow.

Table 1 Ireland’s population, Ireland and the UK’s GDP and net national income per head, and Ireland’s trade patterns with the UK and EU, 1973-2023^[146]

	1973	1979	2000	2019	2023
Population of Ireland (millions)	3.09	3.37	3.81	4.93	5.31
GDP[147] per head Ireland (USD, constant prices, 2020 PPPs)	16,521	20,128	51,559	92,595	111,026
GDP per head UK (USD, constant prices, 2020 PPPs)	24,965	27,333	44,248	53,858	53,882
Net National Income per head Ireland (USD, constant prices, 2020 PPPs)	NA	NA	37,836	46,799	54,385
Net National Income per head UK (USD, (USD, constant prices, 2020 PPPs)	NA	NA	37,165	45,601	44,973
UK share of Ireland’s good exports (%)	55	46	22	10	11
UK share of Ireland’s goods imports (%)	51	50	31	23	19
EU share of Ireland’s goods exports (%)	24	35	40	35	41
EU share of Ireland’s goods imports (%)	26	26	22	33	34

Ireland’s rapid growth in the 1990s and 2000s was due to a number of interlinked factors:

• EU membership
• the creation of the single market
• low corporation tax and other incentives for inward investment
• effective institutions, especially the Industrial Development Authority (IDA) which is responsible for inward investment
• the export pattern of newly established foreign firms in Ireland
• a large pool of English-speaking, underemployed but well-educated labour
• a time zone convenient for US multinationals
• the absorption and wise spending of large amounts of EU structural funds used to boost skills and infrastructure
• social partnership agreements that moderated wage demands and helped create macroeconomic stability

It is useful to compare Ireland’s economic performance post-EU accession with that of Scotland, Northern Ireland and Wales (see Figure 15).

Over this period, Scotland, Wales and Northern Ireland have remained reliant on the relatively poorly performing UK economy, while Ireland has thrived.

Source: CEPR (2020) Rosés-Wolf database on regional GDP (version 6, 2020)

Ireland had the flexibility to determine its own economic policy alongside membership of the EU, which played an important role in its success. It has been suggested:

“…not only that the European Union was fundamental in transforming the Irish economy, but that Irish independence was essential in exploiting the opportunities which the European Union afforded…[Ireland] would never have done anywhere near as well as we in fact did, had we remained a mere region of the UK. Policy flexibility at a time of rapid change was essential, and that is what independence gave us.”^[148]

- Professor Kevin O’Rourke, 2017

Ireland’s recovery from the serious fiscal challenges it experienced in 2008-2013 was not driven by the structural reforms proposed by its creditors but by the effectiveness of its inward investment strategy, especially its ability to target and attract parts of important global supply chains in technology, pharmaceuticals and finance. Ireland had to implement some tough decisions, but had the flexibility and capability to respond rapidly in response to crisis.^[149]

Ireland’s experience proves that independence can enable a country to fulfil its catch-up potential if it makes the right choices.

The Scottish Government believes that Scotland can learn from Ireland’s experiences: not by copying Ireland’s policy choices on, for example, low corporation tax, but through making the most of the powerful combination of independence and EU membership.

What Scotland could learn from Denmark

The Scottish Government believes that Denmark offers insights into the structures and behaviours that can help a nation that is in many ways comparable to Scotland drive economic growth.

In particular, the Scottish Government believes that Denmark demonstrates that in a country of similar size to Scotland, a more consensus-based, collaborative approach to setting the economic direction of a nation is not just possible, it is an opportunity to build an economy that delivers greater dynamism, productivity and wellbeing.

Denmark has a trade surplus,^[150] diverse sectoral activity, and high levels of business investment and research and development.

For a relatively small economy, it has a disproportionate number of international, large companies^[151] which remain headquartered all over Denmark, and has very successfully made the shift into digitalisation^[152] and the green transition.^[153]

Denmark joined the EU in 1973 alongside the UK and Ireland.

Free trading arrangements with the EU benefitted Denmark’s economy, but Denmark was also already in a good position to take advantage of it. Its underlying structures—stable and consensus-based politics, long-running formalised relationships with industry and labour, and strong local governance—led it to a strong position even before the establishment of the single market.

The greater the diversification, the stronger the Danish economy has become (see Table 2)

Table 2 Denmark’s population, Denmark and the UK’s GDP and net national income per head, and Denmark’s trade patterns with the UK and EU, 1973-2023^[154]

	1973	1979	2000	2019	2023
Population of Denmark (millions)	5.02	5.12	5.34	5.81	5.95
GDP per head Denmark (USD, constant prices, 2020 PPPs)	32,510	35,882	55,222	63,977	68,679
GDP per head UK (USD, constant prices, 2020 PPPs)	24,965	27,333	44,248	53,858	53,882
Net National Income per head Denmark (USD, constant prices, 2020 PPPs)	26,983	28,987	42,824	54,215	55,552
Net National Income per head UK (USD, constant prices, 2020 PPPs)	NA	NA	37,165	45,601	44,973
UK share of Denmark’s good exports (%)	19	15	9	6	4
UK share of Denmark’s goods imports (%)	11	12	9	4	2
EU share of Denmark’s goods exports (%)	49	54	55	46	46
EU share of Denmark’s goods imports (%)	60	59	64	66	64

Case study: the Danish model

As well as EU membership, the Scottish Government believes that an independent Scotland could learn from three key features of the Danish economic system.

1. Consensus-building institutions

Denmark has given a formal, legal role to both industry and labour unions in setting the direction of its economy.^[155]

This tripartite dialogue was established as a way to break strike action as far back as 1899 and has developed into a powerful structure for liaison and agreements which protect macro-economic stability and investability, alongside relatively high wages.^[156]

A bi- or tri-annual settlement sets the frameworks for sectoral pay across a workforce which remains unionised, but also sets shared ambitions for investment in research and development and infrastructure, and for government efforts to strengthen labour market supply through, for example, increased education and training provision.^[157]

2. Localism

Denmark actively supports the clustering of skills, innovation and employment in sectors at a regional level through its ‘Lighthouse’ funding. This ensures that skills provision is funded and matched to specific regional strengths, providing a steady supply of apprentices and graduates for growing and globalising sectors.^[158]

The Port of Esbjerg on the western coast of Denmark has built up expertise in the energy sector, and has become the deployment port for 80% of all wind turbines currently installed in the North Sea.^[159]

The neighbouring region in North Jutland has built up manufacturing expertise in related sectors: for example, towers and cabling and renewable and water technology.^[160]

Life sciences is heavily concentrated in the Copenhagen region, not least because of the globally dominant force that is Novo Nordisk. ^[161]

And a huge food and drink sector supports rural areas and benefits from the innovations of Denmark’s life sciences industries.^[162]

3. Innovative business structures

Denmark’s business model of Enterprise Foundations provides an innovative way of developing strong, socially responsible and productive economic activity.

In this model, a company is owned by a Foundation whose purpose is to own that company and to shepherd it to long-term success. In addition, the foundation may have a social purpose, to which it donates excess profits.^[163]

The model started as a response to a succession crisis in Carlsberg and has become a main underpinning for the success of the entire Danish economy. Foundation-owned companies include household names such as LEGO (toy bricks), Velux (windows), Novo Nordisk (pharmaceuticals), Maersk (shipping and logistics) and Carlsberg (beer).

Although they comprise just 0.3% of the business base, they have an outsized direct economic impact, representing 9% of private sector employment, 26% of exports and 39% of R&D.^[164]

The Scottish Government believes that these are the sort of ideas that we could learn from to make the transformational change that an independent Scotland’s economy needs.

But Scotland would need independence to deliver it.

Scotland’s size, pro-European attitude^[165] and social democratic outlook makes it well suited to building a new consensus-based approach to economic management.

But without powers over company law, employment law and the full range of business and personal taxes, the Scottish Government could not deliver the institutions or regulatory framework required to give practical effect to that sense of collective endeavour.

The Scottish Government believes that if an independent Scotland had the opportunity to learn from the Danish approach, it could raise productivity and boost living standards.

The opportunity to raise productivity and living standards

The UK economy has delivered low productivity growth and therefore flatlining living standards. Independent countries comparable to Scotland have higher productivity than the UK.

Independence is the opportunity to move from the current low productivity UK model and seek to emulate the success of those high productivity, independent countries, in order to raise living standards.

The Scottish Government believes that the bedrock of economic policy in an independent Scotland could be some form of social partnership—or what is sometimes called a social dialogue approach—backed up by new institutions and a new way of working, and designed to make the most of Scotland’s size and strengths.

This could bring long-term stability, continuity and agreement on an economic framework, even one capable of withstanding changes of government, to encourage investment and business confidence.

That stability, continuity and agreement is possible: the Scottish Government believes that there is a broad consensus, demonstrated by successive elections results, that Scotland is largely a pro-European,^[166] social democratic country. This makes agreement on long-term economic priorities and frameworks—ones capable of surviving changes of government—possible.

In other words, the Scottish Government believes that it should be possible to agree on the type of Scottish economy that can be built with independence.

Given our strengths, that economy can be a knowledge-based, services, and energy specialist power, with strengths in manufacturing and food and drink—a national, not a regional economy: more Scottish, more European and more international.

It could be a more equal, well-being economy, capable of delivering higher living standards based on long-term consensus.

The One Scotland Forum

One way in which a social partnership model could be established in an independent Scotland is through the setting up of new institutions, designed to support dialogue and consensus-building.

For example, the Scottish Government could establish a One Scotland Forum, bringing together government, employers’ representatives and the trade unions to collectively and regularly discuss and set the direction for the economy, and to come to a shared position, where possible, on the trade-offs, risks and advantages of the direction chosen.

This might, for instance, include some form of mandatory business membership body to represent business in the One Scotland Forum, as exists in other European countries. This would provide analytical resources to gather information from local and sectoral branches on the business operating environment, for example around growth, investment and access to finance,

At the same time, trade union representatives would collect similar information. At present unions in Scotland are unlikely to have the capacity for this function and therefore there is a case for government support to establish an appropriate trade union research organisation.

The Scottish Government would also have its own research capability. To aid all three parties—government, business and unions—an independent economic and social research body could be established to help underpin new policy development and implementation with impartial advice and guidance.

This means that all three groups could seek to agree on the economic situation and conditions and then begin negotiations to agree the substance of policy.

These discussions would aim to:

• reach consensus on how to achieve overall macroeconomic stability
• boost skills and jobs, with the government committing to increasing labour supply where needed through, for example, training incentives
• establish structures for reaching pay agreements
• improve productivity and facilitate investment

The idea of a One Scotland Forum would be to unite the three parties in a national project: growth, skills, jobs productivity and, ultimately, higher living standards.

In order to work effectively in Scotland, both trade unions’ and employers’ organisations’ capacity and capability would need to be strengthened.

In 2024 (or the latest year for which statistics are available in each country), only 40% of UK employees were covered by a collective agreement. This compares to 98% in Austria; 100% in Belgium; 90% in Iceland; 89% in Finland; 88% in Sweden and 82% in Denmark.^[167] In the same year, only 22% of UK workers were in a union, compared to 52% in Norway, 51% in Finland, 66% in Sweden, 60% in Denmark and 91% in Iceland.^[168]

Many countries continue to reconcile higher trade union membership and collective bargaining coverage with high employment rates and highly productive and innovative economies.^[169]

The 2018 OECD jobs strategy argued that collective bargaining can help to reduce inequality by promoting ‘a broad sharing of productivity gains, including with those at the bottom of the job ladder’ ^[170] and through providing a voice to workers and endowing “employers and employees with a tool for addressing common challenges.”^[171]

It also argues that collective bargaining can support productivity growth by, for example, fostering “skills development and skills use in the workplace”. It also finds that collective bargaining enables the “effective dissemination of good working practices”; an essential process in driving productivity growth.^[172]

Crucially, given the challenges posed by economic change and disruption, the OECD also found that collective bargaining can play a role in managing industrial change, sharing benefits of productivity growth and improving labour market resilience.^[173]

The EU is also encouraging greater collective bargaining by member states.^[174]

The Scottish Government could, with the powers of independence, develop a national action plan to extend collective bargaining coverage, working with both unions and employers.

The Scottish Government believes this ambitious, consensus-driven approach should be applied as widely as possible across the economy of an independent Scotland.

Other ways in which a consensus-based model could be implemented in an independent Scotland include new institutions and new types of business association. For example:

A Scottish Fair Pay Commission

The Scottish Government could set up a body with responsibility for determining future increases in the National Minimum Wage. The Commission could lead a new approach which would include a role for employers, trade unions and government.

An Industrial Policy Council

This body could provide independent advice, direction, monitoring and evaluation of industrial policy for an independent Scotland.

It would help to build buy-in and consensus on strategy design and, crucially, contribute to identifying what is working and what is not. The Council would also have an important role in promoting innovation and maximising new economic opportunities.

A Scottish version of the Italian ‘Marcora law’

This would give employees the ability to organise a co-operative or worker-led buy-out or rescue when a business is up for sale or under threat, boosting worker co-operatives and other forms of worker-recovered enterprises.

Evidence from Italy, Spain and France shows that, with the right support, cooperative buyouts and rescues can result in resilient and successful businesses.^[175] And co-operatives have the benefit of sharing wealth and power with their workers.^[176]

The Scottish Government believes that cooperatives and other forms of employee-owned firms can support the retention of company headquarters in Scotland, and support a long-term approach to business. The UK’s approach to corporate governance (including lack of worker representation on boards) encourages short-termism and plays into the lack of business investment in the UK model.^[177]

Enterprise Foundations

As an independent country, Scotland could use new powers over company law and corporation tax to, acting within the relevant subsidy control requirements, encourage the Scottish equivalent of Danish-style Enterprise Foundations so that companies can both grow in size and remain Scottish owned.

The model is relatively simple: a company is owned by a Foundation whose purpose is to own that company and to shepherd it to long-term success. In addition, the foundation may have a social purpose, to which it donates excess profits. In Scotland today one of our leading drinks companies, Edrington, is run along similar lines.

As the Foundations which own the companies are specifically mandated to protect the company or companies’ long-term sustainability and wellbeing, they will direct the firms towards investment in their own capacity. This might be modernisation of equipment or R&D, but can also be human factors like skills and lifelong learning, or investing in smaller companies within their industries and taking these on as partners, creating regional and cluster growth. Their philanthropic plans are often delivered over a five year cycle, and have counter-cyclical impacts in the economy by providing stability and high throughput during times when government might have to limit resources.

Similar to the Danish foundations, company law could be used to enable a share structure in which there were A-class shares owned by the foundation and which would have the deciding vote on how profit is distributed.

This would help long-term development to be prioritised over short-term dividends.

The Scottish Parliament could also pass a law to ensure the foundations must remain headquartered in Scotland. This would mean they would be safe from enforced movement to another jurisdiction by an outside investor. The factors combine to dictate that as the company grows, it would do so in Scotland.

The aim of a large-scale enterprise foundation sector would be a long-term goal but the potential prize would be transformative.

These steps would represent concrete examples of the consensus-based model that an independent Scotland could build to create an economy that delivers higher living standards

Investment in an independent Scotland’s economy

An independent Scotland would seek to build on our current strong track-record on inward investment.

For 10 years running, Scotland has been the top UK destination for foreign direct investment outside London, outperforming all other regions.^[178]

The Scottish Government believes that inward investment prospects would be enhanced by membership of the EU, and the prospect of selling into the Single Market.

But a longer-term goal would be to build Scottish-owned and headquartered global multinational companies here in Scotland.

Nordic countries have produced a range of such companies which have been dubbed Nordic giants, such as Atlas Copco, Ericsson and Spotify:

“Nordic countries have long been considered exemplars of good public policy. Politicians around the world admire Denmark’s social safety-net, Finland’s hospitals, Sweden’s system of parental leave and Norway’s prisons. What gets less attention is that these countries also excel at nurturing world-beating businesses. They have only 0.3% of the world’s population and generate about 1% of global GDP, but produce plenty of corporate giants, from IKEA, the world’s biggest furniture-seller, to Lego, its largest toymaker, and Novo Nordisk, Europe’s most valuable company.”^[179]

The Economist, 2025

The Scottish Government wants to see Scotland build its own Scottish giants.

There are many reasons why the Nordic giants perform so well, including size and a focus on international exports, a strong commitment to digital, and a mix of innovation, resilience, strong governance, and societal trust.^[180]

Crucially, four-fifths of large Nordic companies benefit from long-term ownership, a higher proportion than in Europe as a whole or the US.^{[181][182][183]}

Denmark’s top 10 companies by market valuation include a wide range of home-grown enterprises that have benefitted from Denmark’s long-term, protective approach and consensus-building economic institutions.

 

Table 3 Denmark’s top 10 companies by market valuation 2024^[184]

Rank	Company	Sector	Market Capital (USD)
1	Novo Nordisk A/S	Healthcare	$364 billion
2	DSV A/S	Transport and logistics	$49.36 billion
3	Novonesis A/S	Biosolutions	$26.26 billion
4	Coloplast A/S	Manufacturing	$25.06 billion
5	AP Moller Maersk	Transport and logistics	$24.64 billion
6	Danske Bank A/S	Banking	$22.83 billion
7	Orsted A/S	Energy	$19.51 billion
8	Pandora A/S	Retail	$14.08 billion
9	Vestas Wind Systems A/S	Energy	$13.3 billion
10	Carlsberg A/S	Food and drink	$13.27 billion

This demonstrates the variety and strength of the Danish business sector.

The Scottish Government believes that Scotland has the potential, over time, to start to build businesses like this, acting within the relevant subsidy control requirements, by taking steps like the ones set out in this publication, to build new types of consensus-based business association that would deliver long-term benefits for the Scottish economy.

The Scottish Government believes that the new economic approach proposed and the ideas set out in this publication could increase productivity in a range of interconnected ways:

(1) Increasing trade: higher trade intensity means higher productivity.^[185] An independent Scotland as a member state of the EU would be part of a market roughly seven time the size of the UK. A key goal would be to increase and diversify trade, as countries like Ireland and Denmark have done, as part of the world’s largest single market.

Brexit has hit UK trade: “ Against the EU27 average …. the overall exports gap is … an astonishing 17 percentage points on average. The UK stands out as a real outlier when it comes to post-pandemic trade.”^[186]

(2) A welcoming migration policy that works for Scotland: researchers found that a one percentage point increase in the share of immigrants within a UK local authority is associated with an almost three percentage point increase in productivity^[187]

(3) Encouraging Scottish giants: large companies tend to be more productive.^[188] Scotland could follow the Danish model and use new powers to encourage the growth of large, locally-owned and headquartered firms.

(4) Increasing investment: “the main drivers of productivity are technological progress and innovation, which are embodied in new investment and are fostered by investment in research and development.” The UK has a very poor record of such investment, it has been argued, because of factors such as policy uncertainty, short-termism, austerity and Brexit.^[189]

In place of UK policy churn, the proposed One Scotland Forum, built on Scotland’s social democratic, pro-European ethos, could provide stability, agreement and continuity for investment for the long-term.

(5) Modern skills: government, unions and employers could work together in the One Scotland Forum to agree the optimal mix of policies with regard to skills to boost productivity.^[190]

(6) Building on current economic development structures in Scotland, which it has been argued have “yielded proven productivity gains.”^[191]

More direct benefits from Scotland’s energy wealth

With independence, Scotland would decide its own energy market arrangements and how it interacts with neighbouring markets. The Scottish Government could prioritise making our domestically generated green electricity the most attractive heating option for households and businesses, which the UK has so far failed to do.^[192]

The Scottish Parliament and Government would decide how electricity is traded between markets, how security of supply is maintained and delivered, how subsidy is provided to technologies, within all relevant subsidy control requirements, and how the transmission and distribution grids are built and charged for in the short, medium and long term.

The establishment of a Scottish electricity and gas market would be required by EU membership.

An independent Scotland would have the option of remaining in the GB markets for electricity and gas for a period of transition prior to joining the EU or of establishing separate Scottish markets more rapidly. In both cases, Scotland would continue to make surplus energy available for export to meet demand elsewhere in the UK, providing substantial revenue to Scotland.

In an independent Scotland, the Scottish Government would maximise home-grown, renewable power generation, in combination with other technologies like grid scale storage and pump storage hydro, to develop greater energy self-reliance and reduce our exposure to the volatility of global gas prices. This, in turn, could make Scotland the natural home for the energy intensive industries of the future, including the green datacentres that are critical to the future development of artificial intelligence.

Our abundant wind, tidal and wave resources, strategic location, and our offshore engineering heritage and expertise place Scotland at the forefront of offshore energy development globally.^[193]

Scotland’s offshore wind market, in particular, offers enormous potential in terms of maximising home-grown renewable power, with a significant pipeline of projects ensuring a strong, steady market for investment.^[194] Scotland’s natural resources and experience in marine renewables also means that we are leading the way in terms of the development and deployment of tidal stream and wave energy.

The Scottish Government would work to ensure any lower cost of renewables is passed through to customers, with the price of electricity more accurately reflecting our abundant, low-cost renewable resources. This could tackle fuel poverty in Scotland and bring the cost of living down for all households.

Like many countries now across Europe, we would work to break the link between the price of electricity and the price of gas, a key factor which has driven the high electricity prices for Scottish households and businesses.

This would help ensure that consumers in Scotland benefit from renewable energy produced in Scotland through affordable electricity.

The EU has agreed an electricity market reform package^[195] to reduce the impact of gas prices on the price of electricity. The aim of the reforms is to help the EU build a renewables-based energy system, lower energy bills and better protect consumers from price spikes, with the potential to benefit and nurture the growth of new clean industry, powered by renewable energy.

Independence would give Scotland the opportunity to improve the long-term affordability of electricity, as offshore and onshore wind farms can currently provide electricity at a lower cost than gas power plants.

As an EU member state, an independent Scotland would play its part in influencing the development of a North Seas Transmission Grid, cooperating with and seeking membership of the European North Seas Energy Cooperation group.^[196] The group supports and facilitates the development of the offshore grid and the large renewable energy potential in the region. This is a long-standing energy priority for the EU. We would also be able to influence and join EU hydrogen pipeline infrastructure programmes which would provide a route to the European market for the green hydrogen we produce from excess wind generated electricity.

Building a new Scotland

The Scottish Government believes that independence could achieve a transformational change in how Scotland works and who it works for, delivering higher living standards and better public services.

The Scottish Government sets out here what we believe the opportunities are, and how we would intend to realise them with the full powers of independence.

But the shape of a future independent Scotland would ultimately be determined by the Scottish Parliament and the Scottish Government of the day, elected by the people who have the greatest stake in the country’s future success: the people who live here in Scotland.

The Scottish Government believes the ideas and plans set out in this publication are credible and deliverable, and that they are urgent and necessary if a more dynamic and fairer Scotland, with higher living standards, is to be built.

Other people and institutions will have their own ideas about how the benefits of independence can be seized. The prize of independence will be that the people of Scotland gain the right to decide: not just to decide to be independent, but to decide what sort of country an independent Scotland should be.

How would Scotland become independent?

The people of Scotland have the right to decide their future.^[197]

The Scottish Government believes that in circumstances where a clear decision has been made by the people of Scotland to hold a referendum, it is for both the Scottish Government and the UK Government to acknowledge and respect that decision by beginning inter-governmental discussions intended to provide a constitutional, lawful way to fulfil the instruction of the people.

And if the people of Scotland vote to become independent, then Scotland will become an independent country.

Following a vote for independence, a period of negotiations and a range of agreements will be required to set out the terms on which Scotland would become an independent nation state. That negotiation would include agreeing the division of assets and liabilities, and the terms of the future relationship with the UK. The Scottish Government would lead negotiations on behalf of Scotland, and the UK Government would lead them on behalf of the rest of the United Kingdom.

It would be in the interests of all parties for negotiations to be conducted in good faith, for the benefit of everyone on these islands, with effective delivery of transitional requirements to ensure continuity of services, maintain stability and build a new relationship of equals.

To read more about the Scottish Government’s position on holding a lawful referendum, please see: Your Right to Decide.^[198]

What would the public finances of an independent Scotland look like?

All governments have to prioritise and make tough choices, including about how they raise and spend public finances. No government is immune to global shocks.

With a credible growth model, the record of comparable independent countries, and free from UK economic policy decisions, there is every reason to believe an independent Scotland can have strong public finances.

Fiscal rules appropriate for a newly independent state would be drawn up, informed by international best practice.

As the Scottish Government set out in Building a New Scotland: a Stronger Economy with Independence:

“Setting credible and responsible fiscal rules, and demonstrating that there is a plan in place to meet them, is essential to ensuring market confidence in a newly independent Scotland. …The decision on fiscal rules, and on the strategy for meeting them, would be for a future Scottish Government. We would set fiscal rules designed to put public finances on a sustainable path.”^[199]

Given the Scottish Government’s aspiration for an independent Scotland to join the EU, we would propose that fiscal rules that were, as far as practical, aligned with the principles and the approach of any future EU Stability and Growth Pact.

The requirements in the Treaty on European Union are that public deficits should not exceed 3% of GDP and Eurozone countries’ debt not exceed 60% of GDP, or alternatively move towards 60% of GDP at an appropriate pace.^[200]

In its 2025 document ‘Bringing the new economic governance framework to life’ the EU, however, recognises each country will have different circumstances and different individual fiscal situations.^[201]

As well as sustained and gradual debt reduction, the EU supports policies that ensure sustainable and inclusive growth, with countries setting out reforms and investment plans.

The Scottish Government supports an independent Scotland having a fiscal plan built around growth, investment and sustainable levels of debt and borrowing taking into account Scotland’s particular circumstances.

The Scottish Government would establish a growth fund for Scotland, the Building a New Scotland Fund.

The Building a New Scotland Fund

The Scottish Government has set out plans for a Building a New Scotland Fund to help kick-start growth in the new Scottish economy.^[202]

The fund would reinvest oil and gas revenues, alongside other windfall income, in the productive potential of the Scottish economy. Over the last five years, North Sea revenue has averaged around £4 billion a year,^[203] although receipts have been variable. Given the uncertainty surrounding North Sea revenue, in an independent Scotland the Scottish Government would, if necessary, borrow to invest, as countries across the world are now doing.

It will be important for future governments of an independent Scotland to work in partnership with private investors to seek to address sustained underinvestment. A new investment agency could also be established to advise on which investments the new Scottish nation state should make immediately to stimulate economic growth.

Maintaining a strong credit rating will be part of a fiscally responsible future.

As the UK Treasury acknowledged during the 2014 referendum campaign, the UK will be responsible for paying back all UK Government debt up until the point of independence.^[204]

The policy of the Scottish Government is to reach agreement with the UK Government on the division of liabilities and assets in the event of independence.

Part of this negotiation would involve agreeing a reasonable share of the servicing of the net balance of UK debt and assets, to demonstrate our creditworthiness, in order to minimise any new country premium on debt and borrowing, relative to other countries.

The negotiation would cover a range of matters, including Scotland’s share of national assets, and any continuing shared institutions or processes, and could mean the Scottish Government voluntarily making a payment to the UK with respect to servicing the UK debt, the size of which will depend on a range of factors, including the value of those shared national assets.^[205]

The price that Scotland pays to borrow would be determined in financial markets, and financial investors would value Scottish debt according to how much they trust Scotland to repay it.

An independent Debt Management Office would be established and tasked with meeting the financing requirements for government and minimising borrowing costs. It would also manage the debt stock, the issuance of debt, local government debt, and contingent liabilities.

The Scottish Government believes that there are good reasons for the markets to be reassured about lending to Scotland:

• an independent fiscal commission would assess Scotland’s public finance position
• consensus-based, long-term decision-making institutions would be established and they will base decisions on information from the fiscal commission
• there would be a commitment to fiscal sustainability
• a new economic framework to boost growth and living standards would be put in place

Scotland already has strong economic foundations with a commitment to stability and the rule of law

Scotland’s economy starts in a strong position: it has the people, resources and many of the institutions in place

Given the uncertainty over the outlook for the global, UK, and Scottish economies, and future fiscal and economic policy decisions by the UK and Scottish governments prior to independence, this publication does not present an estimate of the starting fiscal position of an independent Scotland.

To read more about the Scottish Government’s proposals for the economy and finances of an independent Scotland, please see: Building a New Scotland: a Stronger Economy with Independence.^[206]

What would Scotland’s currency be?

On independence, Scotland would continue to use the pound sterling for a period, before moving to the Scottish pound.

Using the pound sterling from the point of independence would not require any formal agreement with the UK Government. Its use would ensure continuity for citizens and businesses immediately after independence.

Continuing to use the pound sterling is the natural starting point. Scottish households and businesses already use and hold sterling and they would continue to do so during this period.

During this period the Scottish Government would build strong new institutions, including a new, independent Scottish Central Bank, that would build the capacity and credibility needed for Scotland to move to the Scottish pound.

The change to the Scottish pound would take place as soon as practicable. The decision when to move to the new currency would be guided by:

• economic conditions, including criteria published by the Scottish Government
• the advice and reports of the new, independent Scottish Central Bank
• discussion and liaison with the EU, in the context of negotiations for Scotland to become an EU member state

On the day that the Scottish pound became an independent Scotland’s currency, Scotland’s households and businesses would hold deposits, investments and assets denominated in pounds sterling, worth billions of pounds.

If these households and businesses chose to exchange pounds sterling for the Scottish pound when introduced, this would automatically build up sterling reserves at the independent Scottish Central Bank. This would be in addition to the share of current Bank of England reserves that Scotland would be entitled to on independence.

Over time, the balance of use between pound sterling and the Scottish pound would change as citizens and businesses used the new currency.

The pace of uptake of the Scottish pound would also depend upon when and how the Scottish Government might require the Scottish pound to be used. The Scottish Government and the Scottish Central Bank could drive this change through, for example, requiring spending, benefits, public sector pay, and taxes to be denominated and paid in the Scottish pound. The banking sector could also be licensed to operate and regulated on that basis.

The Scottish pound would be the general trading currency of the economy and of the banking system. The process of exchange would happen over time and would be voluntary, reflecting the choices of individuals and businesses, as well as the products available through the banking and financial services sector in Scotland.

Over time, the Scottish Government would expect the bulk of transactions through the banking system in an independent Scotland to be in the Scottish pound.

To read more about the Scottish Government’s proposals for the currency of an independent Scotland, please see: Building a New Scotland: A stronger economy with independence.^[207]

Would Scotland re-join the European Union?

The Scottish Government believes that Scotland should be an independent country and a Member State of the European Union, and that Scotland should seek to re-join the EU as soon as possible after independence.

Scotland already has the required knowledge and networks to underpin successful application for EU membership, and Scotland’s laws have remained highly aligned with EU laws.

Given the merit-based nature of the EU accession process, the Scottish Government believes that Scotland would be well placed to fulfil the requirements under Article 49 of the Treaty of the European Union smoothly and quickly. In order to ensure continuity of rights and obligations as well as legal certainty during the EU accession process, the Scottish Government would seek to agree transitional arrangements to provide certainty and facilitate the continuation of trading arrangements—in a broadly similar manner to those in place before independence—until Scotland joins the EU.

The Scottish Government believes that membership of the EU is fundamental to Scotland’s economic, social and political future.

The EU provides a framework for peace, cooperation and prosperity. It enables states of different sizes to collaborate as equals in relationships governed by values, cooperation and law. In contrast to the limitations faced by Scotland, with a devolved government operating within the UK, each member of the EU has a formal role in shaping the direction and making decisions.

The benefits to Scotland of EU membership include:

• All Scottish citizens in Scotland would regain the right to live, work, study and travel across the EU, as well as in Norway, Iceland, Liechtenstein and Switzerland.
• Scottish businesses would regain the right to trade freely in the EU, barriers to trade with the EU would be lifted and the bureaucracy and costs of doing business abroad would be reduced.
• Our economy would regain access to the world’s largest market: by population the EU single market is seven times the size of the UK.
• All of us would benefit from the EU’s negotiating strength that comes from being part of the world’s wealthiest trading bloc. The EU currently has over 40 trade agreements with over 70 countries and regions.^[208]
• Scotland would have a seat at the top table of Europe, influencing the future of the continent and being part of Europe’s collective voice in international affairs.
• Scottish students would once again have the guaranteed right to be able to participate in exchange programmes through the Erasmus+ programme, widening educational opportunities.
• Rejoining the EU would allow artists and other creative professionals to move freely without barriers like visa and customs requirements when working in other EU countries.
• Rejoining the EU would reduce or eliminate the problems that people travelling abroad can now face, including long delays on arrival that were not a problem before.

The Scottish Government also believes that the EU would benefit from what Scotland can offer. The EU’s core values of human dignity, equality, rule of law, freedom, democracy and human rights are ones that Scotland shares.

EU membership is in the interests of our businesses and economy. It supports our security—where the EU works closely with NATO partners—and it supports our ambitions in challenges like climate action where the only long-term solutions are collective ones.

To read more about the Scottish Government’s proposals for re-joining the European Union please see: Building a New Scotland: an independent Scotland in the EU.^[209]

Would re-joining the EU mean a border with England?

There is currently a border between Scotland and England. They are separate legal jurisdictions, with different laws and court systems applying each side of the border, and have been since the Union was formed.

An independent Scotland would seek to re-join the EU as soon as practicable.

All EU member states share responsibility to monitor and control access to the EU by land, sea or air from non-EU countries. Meeting the requirements of the Single Market would require putting in place normal border arrangements, just like any other country.

Checks on goods between Scotland and the EU would be removed, but some checks would be required on some goods going between Scotland, as an EU member state, and the rest of the UK, outwith the EU, depending on the particular arrangements in place between the UK and EU at the time.

The rest of the UK would remain an important trading partner for Scotland, as it currently is.

The present movement of food, drink and farming goods is likely to be aided by current negotiations on a comprehensive Sanitary and Phytosanitary (SPS) and Veterinary Agreement with the EU. Such an agreement could remove the need for many of the post-Brexit checks on good moving between the EU and the UK, providing a benefit to businesses and consumers.

Following a vote for independence, the Scottish Government would establish a new government service to manage the operation of trading relationships between Scotland and the UK, from the point of independence through the period of Scotland’s application to join the EU, and as a member of the EU.

The new government service would support traders in the period after independence to gain the most from our new relationship as members of the EU, including free trade with 30 countries (i.e., the EU 27 plus Iceland, Norway and Lichtenstein) plus Northern Ireland.

This service would have ultimate responsibility for the design and delivery of all aspects of border management, including the smooth running and transporting of goods, movement of people and maintenance of security. The new service would have responsibility for the preparatory work needed to ensure an independent Scotland is ready to re-join the EU at the most appropriate time, as well as ensuring continued participation in the Common Travel Arrangement.

The Northern Ireland Trader Support Service provides an example of the types of support that could be made available to Scottish businesses in the early years of independence.

Case study: the Northern Ireland Trader Support Service

The Northern Ireland Trader Support Service is a free-to-use service funded by the UK Government to help businesses navigate the changes to the way goods move between Great Britain to Northern Ireland. It acts like a customs agent or information provider for GB to NI trading arrangements.^[210]

Initially established on a short-term basis for a few years when the Northern Ireland Protocol was first announced in 2021, its services have since been extended due to issues around the protocol and not all trading arrangements being rolled out. A new competitive procurement exercise for this service is expected to begin in 2025 and it is likely the service will be ongoing in some form from 2026.^[211]

The Trader Support Service enables businesses to:

• complete declarations without the need for specialist advice or software
• get information and advice about moving goods between Great Britain and Northern Ireland through free online courses and training materials
• access help and support through a dedicated contact centre

The service uses the information businesses provide to submit customs and safety and security declarations on their behalf.

The Northern Ireland Custom & Trade Academy (NICTA) is also part of the Trader Support Service. As their website explains, NICTA is a digital learning platform designed to support and educate businesses who move goods under the Windsor Framework between Great Britain and Northern Ireland. Providing comprehensive information and support to facilitate trade, NICTA hosts guidance on how to move goods into and out of Northern Ireland when using the Trader Support Service.^[212]

Scotland is now largely a service-based economy (see Figure 16) which depends on a highly skilled workforce and access to a wide range of talent.

As a nation state within the EU, Scotland could have freedom of movement both within the EU and the UK through the Common Travel Area, allowing service companies to draw from a combined population of over 500 million people.

Source: Scottish Government (2024) Supply, Use and Input-Output Tables 1998-2021, GVA Weight per 1000

The Common Travel Area (CTA) is a long-standing arrangement that provides a special travel zone covering the Republic of Ireland and the United Kingdom, as well as the Isle of Man and Channel Islands.^[213]

Current participation in the CTA gives reciprocal rights for British citizens in Ireland, and Irish citizens in the UK. It includes free movement within the CTA reflecting the longstanding social, cultural, family and economic ties with other parts of the UK and Ireland.

By remaining in the CTA there would be no new passport or immigration checks at any of an independent Scotland’s land, sea or air border points with the UK and Ireland for those travelling between Scotland, the UK and Ireland.

Economic links between Scotland and the rest of the UK would go beyond free movement. The opportunities that arise from effective cooperation between neighbouring states are demonstrated by the institutions established by the Nordic and Baltic countries. They have established the Nordic Investment Bank to create a financial institution that “works towards a prosperous and sustainable Nordic-Baltic region” with a mission to “finance projects that improve productivity and benefit the environment of the Nordic and Baltic countries.” ^[214]

As an independent country, Scotland could follow a similar path with neighbouring countries.

Independence would enable Scotland and the UK, as well as other neighbouring countries, to share functions where it makes sense to do so, while retaining distinct approaches where that is in each country’s interests.

The Scottish Government believes that in the event of independence, the governments of Scotland and the UK would commit to working together constructively to negotiate the terms of independence, and a partnership agreement in the best interests of all citizens.

To read more about the Scottish Government’s proposals for borders and trade in an independent Scotland, please see: Building a New Scotland: a Stronger Economy with Independence and Building a New Scotland: an independent Scotland in the EU.^[215]

Can a smaller nation have an international presence?

The Scottish Government believes that smaller nations can have a disproportionate international impact and presence, working internationally to deliver not just for their own citizens but to common global endeavours.

Foreign policy is currently reserved to the UK Parliament and Government: decisions are made for Scotland by the UK, regardless of whether they reflect the views of the people of Scotland.

As an independent country, Scotland would be able to develop its own foreign policy and choose how best to work with allies, responding to world events and our changing world in ways that reflect Scotland’s interests.

As a member of multilateral institutions such as NATO and United Nations, as well as the EU, Scotland would have a role in influencing global change as well as simply responding to it.

The Scottish Government would seek to use the new powers and responsibilities to make timely, well informed decisions that serve Scotland’s interests. The Scottish Government would seek to build strong partnerships, contributing constructively to international efforts that promote stability, prosperity, and shared values among allies.

Independence would also mean that Scotland gets to determine the type of state it wants to be: one that acts based on its values and principles.

An independent Scotland would also be able to deepen and strengthen the partnerships we already have and build new partnerships with other countries and international organisations to address global challenges, such as climate change, global poverty, and violence against women and girls.

Countries similar to Scotland in size and population can have an impact on international affairs. Ireland is a strong example of this, through United Nations membership and through sustained, principled funding of UN development programmes, it has demonstrated that it is possible to influence at the highest levels.

Scotland could share expertise in areas such as health, innovation, renewable energy, research and human rights. And, with an emphasis on equitable partnerships, we would learn from partner countries in return, as the Scottish Government has sought to do through our development partnership with Malawi.

An independent Scotland would commit to meet the UN target of 0.7% of Gross National Income on official development assistance and play our part in tackling global poverty.

Following a vote for independence, the Scottish Government would create an overseas consular and diplomatic network. This would provide the necessary consular support for Scottish citizens overseas and advocate for Scotland’s interests and as a hub for innovation, trade and investment.

Scotland’s diplomatic network would work with other governments to strengthen relationships, ensure our voice is heard and our interests are represented.

To read more about the Scottish Government’s proposals for an independent Scotland’s international relations and approach to international development, please see: Building a new Scotland: an independent Scotland’s place in the World.^[216]

How would Scotland defend herself?

The defence and security of its people is the first duty of every independent country’s government.

In the event of independence, the Scottish Government believes Scotland’s defence and security priorities would rest on three pillars:

• joining NATO
• committing to the EU’s Common Security and Defence Policy, including joining the EU’s Security Action for Europe (SAFE) fund
• building a collaborative, mutually beneficial defence and security relationship with the UK as well as other strategic partners

Pillar one: joining NATO

An independent Scotland would seek discussions with NATO leaders with a view to Scotland joining as soon as possible.

An independent Scotland would:

• align with NATO’s defence principles, contributing to the global alliance as an active partner
• work with neighbouring members in defence of the North Atlantic and High North region, with a likely focus on the strategically important Greenland–Iceland–UK Gap
• provide conventional forces to NATO operations in support of Treaty objectives and participate in joint exercises conducted by NATO and by neighbouring countries
• contribute forces to NATO and UN-led international humanitarian and peacekeeping missions
• work with NATO allies towards worldwide nuclear non-proliferation and disarmament

An independent Scotland would fulfil its full role in European and North Atlantic security through membership of NATO.

Pillar two: EU Common Security and Defence Policy

Membership of the EU would be the second pillar of the defence strategy of an independent Scotland.

The Scottish Government proposes that an independent Scotland would participate fully in the EU’s Common Security and Defence Policy (CSDP). The CSDP sits within the EU’s wider Common Foreign and Security Policy, which in the words of the EU itself allows “Member States to tackle challenges they cannot solve alone and ensuring the security and prosperity of EU citizens.”^[217]

The EU’s approach to security and defence policy involves deploying a combination of civilian and military activity and assets. It plays an important role in peace-keeping operations, conflict prevention and the strengthening of international security. For example, the EU Military Assistance Mission Ukraine has, with international partners, given “substantial political, military, financial and humanitarian support to Ukraine”.^[218]

As an independent country in the EU, Scotland would contribute to missions that support global peace and security, and in doing so, join the family of nations fully committed to the international rules-based system and multilateralism.

Pillar three: relationships with key strategic partners

An independent Scotland would build collaborative, mutually beneficial defence and security relationships with the UK, as well as other strategic partners in our region.

An independent Scotland’s geographic position, sharing a landmass with the rest of the UK and proximity to Ireland, means that cooperation on issues of defence and security with our nearest neighbours makes sense. It is already happening now between the UK and Ireland.^[219]

An independent Scotland’s most enduring defence and security partnership would be with the UK and Ireland, and would require our respective independent countries to work collaboratively to ensure our mutual safety.

An early aim, following a vote for independence, would be to establish the joint readiness, capability and intelligence-sharing mechanisms to support the security of these islands and our wider alliances, as well as arrangements for the transition to independent Scottish military capability.

An independent Scotland would have its own armed forces, supported by a modern contract for personnel and strong support for veterans. It would comprise land, sea and air components overseen by a Joint Forces Headquarters.

Decisions on future forces capability would be informed by a comprehensive, expert-led Defence and Security Review. This would be complete before independence, ensuring that Scotland develops the capabilities needed to protect and defend our borders, citizens and democracy. The Review would make recommendations on the size, shape and specific capabilities of an independent Scotland’s armed forces and inform the establishment of our own Scottish Security and Intelligence Agency.

The new Scottish Security and Intelligence Agency would undertake risk and threat assessments and gather intelligence and investigate threats. It would liaise with Police Scotland and other defence and security actors—including UK and international intelligence agencies—to protect our citizens and key national infrastructure. It would also be responsible for cyber security.

To read more about the Scottish Government’s proposals for defence, peace and security in an independent Scotland, please see: Building a New Scotland: an independent Scotland’s place in the world.^[220]

Would Scotland have nuclear weapons?

The Scottish Government has been clear that nuclear weapons would have no place in an independent Scotland.^[221]

The Scottish Government has proposed that the interim constitution of an independent Scotland should place a duty on the post-independence Scottish Government to pursue nuclear disarmament.^[222] This would mean that, immediately upon securing a vote for independence, the Scottish Government would pursue negotiations with a view to securing the safe and expeditious removal from Scotland of the nuclear weapons based here.

The Scottish Government believes that the removal of nuclear weapons from Scottish soil would not prove an obstacle to an independent Scotland’s aims of joining NATO. Only a minority of NATO members host nuclear weapons,^[223] and Finland’s accession to NATO in April 2023 shows that hosting nuclear weapons is not a precondition for membership.^[224]

To read more about the Scottish Government’s proposals for defence, peace and security in an independent Scotland, please see: Building a New Scotland: an independent Scotland’s place in the world.^[225]

What would be in the Scottish constitution?

With independence, it will be for the people of Scotland to determine what the Scottish constitution would be.

The Scottish constitutional tradition holds that in Scotland the people are sovereign.^[226] This means that the people and institutions that exercise political power do so on behalf of and with the consent of the people. This contrasts with the UK’s constitution, which is based on the idea of parliamentary sovereignty, that the Crown-in-Parliament can make or unmake any law.

The Scottish Government proposes that an independent Scotland should have a modern written constitution. On independence there would be an interim written constitution that would remain in place until a permanent constitution has been agreed by the people.

One of the first acts of an independent Scotland’s Parliament would then be to establish a Constitutional Convention, to draft that permanent written constitution.

That Convention would lead people in Scotland in a shared national endeavour to create a constitution that reflects the ambitions and values of the people of Scotland.

The process would enable people in Scotland to engage in an open debate about the sort of country an independent Scotland wants to be. This process would include representation from all areas of Scotland and all parts of Scottish society.

The people of Scotland would then, in an exercise of their popular sovereignty, vote on whether to adopt that permanent written constitution in a referendum.

The content of a permanent written constitution would be a matter for the Constitutional Convention and for the people of Scotland. But the Scottish Government believes that it should include provisions that, for example:

• enshrine the range of international human rights and equalities obligations, including children’s rights
• recognise and protect the place of the NHS in Scotland, ensuring a right to access a system of health care free at the point of need
• provide constitutional protection to the right to strike
• enshrine a policy on free university tuition
• set out the key features of Scotland’s democratic system, including the make-up of the Scottish Parliament, and the role and powers of the courts, the government and other bodies, like the Scottish Human Rights Commission

It is the Scottish Government’s policy that the King would continue to be the Head of State of an independent Scotland, and that Scotland would remain a constitutional monarchy. This would be the case for as long as the people of Scotland wish to retain the monarchy.

To read more about the Scottish Government’s plans for a written constitution in an independent Scotland, please see: Building a New Scotland: Creating a modern constitution for an independent Scotland

Who would be a citizen of Scotland?

On independence, there would be a new nationality in domestic and international law: the nationality of a citizen of Scotland.

The Scottish Government proposes that the following groups of people would automatically become citizens of Scotland at the point of independence:

• British citizens habitually resident in Scotland
• British citizens born in Scotland but living elsewhere
• British citizens living elsewhere but with a parent who was a British citizen born in Scotland
• British citizens living elsewhere who previously lived in Scotland for at least ten years, or five years as a child, with a pro rata calculation for young adults

The Scottish Government proposes that the following two groups of people would be entitled to register as citizens of Scotland at the point of independence:

• British and Irish citizens living in Scotland
• children of any nationality living in Scotland who have been brought up here

Anyone else who wants to become a citizen of Scotland would be able to apply to become one.

Having British citizenship, or any other citizenship, would not prevent a person from become a citizen of Scotland.

Our approach to Scottish citizenship would be generous and welcoming, encouraging people to live, work and settle here, contributing to our communities.

Having Scottish citizenship would mean that you could apply for a Scottish passport and benefit from consular support when you are abroad.

And should Scotland re-join the European Union, Scottish citizens would once again become EU citizens, allowing them and their families to live, work and study freely throughout the EU.

But being a citizen of Scotland would not be the only way to contribute to and benefit from Scottish society. A person who lived in Scotland but was not a citizen would still benefit from a wide range of rights and services, available to every lawful resident.

To read more about the Scottish Government’s plans for citizenship in an independent Scotland, please see: Building a New Scotland: citizenship in an independent Scotland.

What would Scotland’s migration policy look like?

The UK has on average over recent decades experienced broadly similar levels of migration to other developed countries such as the United States, France, and the Netherlands.^[227]

Scotland’s economy and society benefits from inward migration.

People who have chosen to live and work in Scotland are helping to grow our economy.^[228] They help us address skills shortages in key sectors and make an important contribution to our population growth. Inward migration can contribute to higher economic growth, increased productivity and innovation, and increases in trade.^[229] This has been demonstrated recently by the experience in Spain, which has a more open and welcoming approach to migration and high growth.^{[230] [231]}

At the moment though, Scottish employers—including in key industries like healthcare^[232], hospitality^[233] and tourism^[234]—can struggle to find the workers they need. A flexible visa system would help Scottish businesses and employers to attract and retain the international talent they need to thrive.

Migration could also help island and rural communities to grow, address depopulation challenges and keep vital public services working.

Nevertheless, the current UK Government, like its immediate predecessors, is committed to seeing net migration fall.^[235]

The Scottish Government believes that decisions around immigration should be made in Scotland. The Scottish Government put forward proposals to the UK Government for a more pragmatic approach to migration which recognises our distinct demographic and economic needs.^[236]

Actions being taken by the UK Government will damage Scotland’s economy and society:

• it has put in place plans to end international recruitment of care workers, which will further exacerbate shortages in the care sector. This is on top of the existing decision to stop care workers bringing partners and children with them into the UK.^[237]
• the current UK Government also intends to reduce the duration of the existing UK-wide Graduate Visa from 24 months to 18 months

These actions and others will hit Scotland twice: by reducing immigration and by damaging public service staffing.

The Scottish Government would offer a range of visa routes in an independent Scotland. These would support people to live, work or study in Scotland, or to visit or invest here.

The Live in Scotland route

This would be a new type of visa, allowing people to live and work in Scotland with their families without employer sponsorship, if they meet criteria set out in the Scottish immigration rules.

This visa would give credit for a broad range of characteristics including age, education, skills and work experience, earning potential and language ability—and could include the opportunity to be credited for Gaelic as well as English.

The Live in Scotland route would also incorporate a place-based element, supporting migration to rural and island communities within Scotland, therefore helping to address depopulation.

The Work in Scotland route

An independent Scotland would retain an employer-sponsored visa route, with simplified rules to allow more employers to interact with the immigration system and allow them to recruit internationally.

We would also continue with and expand a seasonal worker visa route, removing the need for workers to be tied to a single employer, reducing the likelihood of exploitation.

The Scottish Connections route

This new type of visa would provide an immediate route post-independence for people with a connection to Scotland to return or remain here. This includes:

• people with previous lawful residence in Scotland of at least five years
• people with an ancestral connection through a parent or grandparent, adapting the UK Ancestry visa route, currently open only to Commonwealth citizens
• graduates who studied in Scotland for their degree, adapting and significantly expanding the UK Graduate visa route
• British nationals who are not British citizens, adapting and slightly expanding the UK British National (Overseas) visa for Hong Kong to also include the much smaller number of nationals of UK overseas territories

This would be a five-year visa route, leading to settlement and citizenship if desired

The Scottish Connections visa would also replace the two-year post-study work visa—set to become 18 months under UK Government plans—currently offered by the UK Government to attract international students.^[238] This means international graduates of Scottish universities could apply straight after their studies to stay in Scotland to live and work for a further five years.

The Scottish Government would remove the minimum income requirement for family migration, introduced as part of the last UK Government’s approach. This would make it easier for families to choose Scotland as a place to live and would support family reunification.

The costs and complexity of the immigration system are another barrier that independence would allow the Scottish Government to address.^[239] For example, costs would be reduced for applicants, with visa fees being set at a level that ensures full cost recovery but does not seek to generate revenue.

An independent Scotland could also have an asylum and refugee policy rooted in human rights, equality principles and the rule of law. We would focus on making sure people in need were given support and helped to integrate from day one of arrival.

We would give people seeking asylum the right to work and to get support with employability and social security, reducing the risk of destitution. We would also give refugees settlement status in Scotland to support their longer-term integration.

For more on the Scottish Government’s proposals for an independent Scotland’s migration system, please see: Building a New Scotland: Migration to Scotland after independence

How would social security work?

An effective social security system—one that provides a strong social safety net—is a foundation of a dynamic and innovative economy.

The Scottish Government has already established Social Security Scotland and delivered a radically different system to tackle the worst impacts of UK Government cuts and to tackle inequality and child poverty. With independence, the Scottish Government would take full responsibility for social security. This would enable reform of Universal Credit to make it fairer, the ability to protect pensioners, the ability to do more to support disabled people and unpaid carers, and to tackle child poverty.

Independence would give the Scottish Government the opportunity to move to a full Scottish social security system that builds on the values and principles of the current approach in Scotland.

In the initial phase of independence, the Scottish Government would work with the Department for Work and Pensions and His Majesty’s Revenue and Customs to transfer benefits and service provision safely and securely, to ensure that everyone continues to receive their benefits, on time and in full. Over time we would develop existing systems to support delivery of a full social security system in an independent Scotland.

As a priority, the Scottish Government would scrap the young parent penalty and the benefit cap, which unfairly restrict the living standards of low-income families. We would also reduce the debt burden on families, replacing budgeting loans with grants.

The Scottish Government would also end work conditionality and the sanctions regime, because the UK Government’s own evidence has shown that it doesn’t work.^[240] Instead, the focus would be to ensure that people are supported into fairer, sustainable employment, similar to the approach here in Scotland where our employability support is voluntary and people are not driven to take part by the fear of benefit sanctions.

Without the limitations and complexities of delivering Scottish benefits as part of a wider UK system, independence would allow the Scottish Government to develop a system which provides an integrated, person-centred model of social security support for carers and disabled people. We would be able to prevent or roll back the current round of UK Government benefit reforms to protect the incomes of the people who rely on this support.

In the longer term, the Scottish Government would commit to developing the right approach to social security for Scotland – an approach that goes beyond providing the very minimum which allows people to survive to one that addresses fundamental structural inequalities and supports a dynamic economy. With independence, we could build a more robust social security system for everyone that would build on our existing principles of dignity, fairness and respect.

To read more about the Scottish Government’s plans for social security in an independent Scotland, please see Building a New Scotland: Social Security in an independent Scotland.

How would pensions work?

Independence would allow the Scottish Government to improve the pensions system, helping older people thrive in retirement.

There are many problems with the UK pensions system at present.^[241]Around 160,000 older people in Scotland currently live in poverty.^[242] Pensions inequalities mean that women, people with multiple low pay jobs, disabled people, minority ethnic communities and people who are self-employed all face lower pension incomes in retirement.^[243]

The current UK Government recently announced a new Pensions Commission to consider the long-term future of the UK pensions system. This will be accompanied by an independent review of UK State Pension age and is expected to report in 2027.^[244]The starting point for delivering pensions in an independent Scotland will depend up on the outcome and implementation of the reviews’ recommendations.

The Scottish Government is therefore setting out four key principles for pensions policy which would guide planning for independence. It would be for future governments and a future Scottish Parliament to take these forward, following a process of negotiation and transition.

1. Safe and secure delivery of pensions

Before and after independence day, the UK and Scottish governments would work together to ensure that the State Pension continues to be paid on time and in full across both countries. It is the Scottish Government’s intention that, in the early years of independence, the Scottish State Pension would be governed by the same rules as the UK State Pension.

The costs of the Scottish State Pension would, however, be the responsibility of the Scottish Government from the point of independence.

The 2024-25 Government Expenditure & Revenue Scotland statistics show Scotland’s £91.4 billion revenue was enough to cover all day-to-day devolved spending and all reserved social security, including the State Pension, which amounts to £84.9 billion.^[245]

After a transition period, the Scottish Government would assume full responsibility for the State Pension. Existing pensioners would not have to reapply and rights and entitlements to the State Pension would be fully protected.

At the point of independence, the value of the State Pension would be the same as in the rest of the UK. As now, the State Pension would increase every year. Following the transition period, the Scottish Government would be able to introduce its own uprating mechanism.

The Scottish Government is committed to the triple lock, which offers a minimum annual increase based on the level of average earnings, CPI inflation or 2.5%, whichever is highest. The Scottish Government believes that this should be the method for uprating the State Pension in Scotland.

For those of working age in Scotland at the time of independence, the qualifying years they have already built up towards their UK State Pension entitlement would be included in the final calculation of their Scottish State Pension entitlement. Any qualifying years accrued in Scotland after independence would also form part of that entitlement. Once people in Scotland reach State Pension age, the Scottish Government would be responsible for paying any Scottish State Pension for which they are eligible.

Entitlements accrued in public sector pensions would be fully protected including those that are currently reserved to the UK Government, like the armed forces and civil service schemes.

Private pensions would be protected under the Scottish Government’s approach to regulation in an independent Scotland. In the early years of independence, the Scottish Government would emulate the current regulatory regime, recognising that it is trusted and respected by individuals, employers and pension schemes.^[246]

As Scotland transitions to independence, the Scottish Government and the new Scottish Central Bank would work together to examine a range of models, including examples from European countries comparable to Scotland, to determine which model would work best for Scotland in the longer term.

2. Pensioner poverty levels must be reduced.

The Scottish Government’s commitment to the triple lock would mean the State Pension in an independent Scotland would keep pace with earnings and inflation. In the longer term, however, the Government’s ambitions to develop a more robust social security system could protect all older people living on low incomes.

Steps would be taken in the early years of independence so more older people receive Pension Credit—topping up older people’s incomes in retirement where needed and passporting them to a range of other benefits.^[247] Early actions could include issuing an invitation to apply for Pension Credit to everyone as they approach State Pension age, providing information and access to applications annually and including Pension Credit in the Scottish Government’s benefit take-up strategy.

3. More must be done to help people save into a workplace pension.

In an independent Scotland, the Scottish Government would work with employers to improve automatic enrolment into workplace pensions, reducing or removing age and income restrictions that limit who can get enrolled into workplace pension schemes.

Evidence also suggests that the current minimum contribution level into workplace pensions, from employers and employees, is too low to deliver an adequate retirement income.^[248]

In an independent Scotland, future governments could work with employers to address under-saving. Options for consideration could include:

• working with employers on a voluntary basis so that more employees are offered better workplace pensions as standard, reflecting the focus of the ‘Living Pension Standard’ campaign that builds on the success of Living Wage accreditation.^[249]
• requiring employers to contribute more into employee pensions over time, adapting the model from Australia.^[250]

4. The State Pension age must take account of Scottish circumstances,

In an independent Scotland, the Scottish Government would establish a new independent Pensions and Savings Commission to make recommendations to Ministers on a Scottish State Pension age based only on Scottish circumstances, including Scottish life expectancy, and the long-term sustainability of pensions. No changes would be made to State Pension age in an independent Scotland until the Pensions and Savings Commission has provided recommendations.

How could independence help protect the environment?

Independence would enable future Scottish Governments and the Scottish Parliament to use every available lever to protect Scotland’s terrestrial, marine, coastal and freshwater environments and support the industries and communities that they sustain.

Scotland is already committed to tackling climate change, nature loss and pollution. We have a legally binding target to become a net zero nation by 2045, have proposed a framework for statutory nature targets in the Natural Environment Bill under consideration by the Scottish Parliament, and are developing a strategic approach to supporting an environment that is healthy and robust and benefits everyone in Scotland.^[251]

Scotland has a strong reputation for its commitment to tackling the climate and nature emergencies^[252] through an approach based on fairness and equality.^[253] An independent Scotland would be able to do more and have greater influence, for example, by having its own, distinct voice at, and working with our international partners at, climate change and biodiversity summits such as COP.

Independence would also mean that Scotland could embed the right to healthy environment in its constitution, reflecting Scotland’s role as a leading nation in developing a wellbeing economy, and ensuring our economy is in the service of our people and our planet. The permanent constitution of independent Scotland could also address the sustainable use of natural resources, our commitment to sustainable development and tackling climate change and the protection of the natural environment.

To read more about the Scottish Government’s proposals on the environment, please see: Building a New Scotland: Our marine sector in an independent Scotland; Building a New Scotland: Creating a modern constitution for an independent Scotland; and Building a New Scotland: an independent Scotland’s place in the world.^[254]

How could independence boost our cultural and creative industries?

Scotland’s culture is celebrated around the world and loved and treasured here at home. We are home to world-famous musicians, poets, authors, actors, designers, and innovators.

Strong, thriving and diverse culture and creative industries are important to our health and wellbeing, and also make a significant contribution to Scotland’s economy, creating jobs and supporting the growth of other sectors.

With independence, Scotland would have greater opportunities to help everyone benefit from the transformative potential of culture.

Independence would give Scotland the powers it needs to make important decisions on how best to provide support for the culture sector and creative industries like the video games and screen sectors, helping to ensure that they have the support and stability that they need.

In an independent Scotland, the Scottish Government proposes that a new Scottish public service broadcaster would provide TV, radio and online services. The new broadcaster would reflect what Scottish audiences want, including local and national news, and offer a Scottish perspective on current and global affairs. It would make sure audiences have continued access to programming we know and love.

Following a vote for independence, the Scottish Government would be committed to matching UK tax relief for qualifying film and high-end TV production, to ensure we remain attractive to inward investment.^[255]

And with independence and EU membership would come other benefits. Scottish musicians would once again be able to tour in Europe without expensive visas and permits. And Scotland would be able to attract more touring artists from overseas, helping our economy and making it easier for audiences here to see some of the best acts in the world.

For more on the Scottish Government’s proposals for culture, broadcasting and the creative industries in an independent Scotland, see Building a New Scotland: Culture in an independent Scotland.^[256]

What would independence mean for education in Scotland?

Scotland already has its own distinct and independent education system.

The strengths of Scotland’s school system has been recognised by the OECD and the International Council of Education Advisers.^[257]

Scotland’s tertiary education and research sectors are amongst the best in the world. The percentage of Scots holding post-secondary school qualifications continues to be one of the highest in Europe. The universities and colleges that make up our further and higher education sector continue to provide a range of opportunities for our young people.

Scotland’s colleges and universities are national assets that contribute to a range of social, economic and cultural outcomes. They also deliver a significant economic benefit from international students choosing to live and study in Scotland. The net contribution in 2021-22 of international students in Scotland to the UK economy was estimated to be £4.21 billion.^[258] Those who choose to stay can contribute valuable skills to our workforce, support the sustainable growth of our economy, and enrich society.

However, the higher education sector in Scotland is currently facing significant pressures as a direct result of UK Government policy. Recent changes to the immigration system, including restrictions on dependent visas for most international students and the significant increase to the Skilled Worker visa salary threshold, have hampered the ability of Scottish universities to welcome the brightest and best talent from across the world and for prospective international students to see a route for progression from a Graduate Visa to a Skilled Worker Visa. This has clear implications for Scottish universities to retain and attract talented individuals from outside the UK who choose to study and make Scotland their home.

Independence would mean the ability to make choices not currently available under the devolution settlement. It would allow for a joined up migration system that meets Scotland’s needs. And make the conditions and foundations for learning even stronger, so that every young person has the best chance possible of succeeding at school and in post-school education.

For more on the Scottish Government’s proposals for education in an independent Scotland, see Building a New Scotland: Education and Lifelong Learning in an independent Scotland.^[259]

What would Scotland’s relationship with the UK look like?

With independence, Scotland will leave the United Kingdom and become a new sovereign state. As soon as possible after independence, Scotland would apply to re-join the EU.

Scotland’s new status will mean changes to the relationship between the government of an independent Scotland and the governments of the other nations on these islands, as well as with governments and institutions around the world.

Following a vote for independence, and becoming an independent state, it is reasonable to expect the UK and Scottish Governments to work together where that is in our mutual interest. A cooperation agreement on the terms of the future relationship between an independent Scotland and the UK would establish the terms on which Scottish institutions would work with their counterparts across the border. These shared arrangements would be governed by an approach grounded in mutual respect and parity of esteem.

Independence would mean that the Scottish Government and the people who live here in Scotland would continue to interact and work closely with our nearest neighbours. And with independence, people in Scotland would still be able to live, work and travel freely across these islands as we do now.

The Scottish Government would work with other governments to strengthen the existing structures for dialogue and cooperation between the governments of these islands.

Scotland would be a good neighbour, as a new nation, to its nearest and closest allies.