London Daily

Focus on the big picture.
Thursday, Jul 16, 2026

What's the plan for an independent Scotland?

What's the plan for an independent Scotland?

First Minister Nicola Sturgeon has set out her economic vision for Scottish independence with a new paper of policies ranging from a Scottish pound to the EU and border checks.

She wants a referendum next October - something the UK government has rejected.

As with everything else about independence, the policies are likely to be fiercely contested, but here's a look at the Scottish government's positions on the key economic issues.


A new currency


The Scottish government's proposal is to keep using the pound immediately after independence, before eventually setting up a new Scottish pound.

The new state would set up a central bank on "day one", which would act as the Scottish government's banker and guarantee deposits while amassing currency reserves.

However it would keep using sterling for an unspecified period of time, meaning businesses could continue to trade using the pound and contracts, wages and savings accounts would continue on that basis.

It would, however, mean monetary policy such as interest rates would continue to be set by the Bank of England.

The SNP had previously suggested it might take more than a decade to transition to a new currency, but the latest paper only says it would happen "as soon as practicable".

The shift would come "when the economic conditions are right" and new fiscal institutions are well-established and trusted, with the ultimate decision being one of the independent Scottish Parliament.


Joining the EU


This whole plan is based on Scotland becoming a full member of the European Union - a key part of Ms Sturgeon's political argument for independence as well as the economic one.

The idea is that this would open up Scotland to immigration needed to boost the working-age population, as well as to increased trade with European nations and indeed Northern Ireland.

On the practical side, it remains unclear how Scotland would move through the accession process, with Ms Sturgeon promising a future paper focusing specifically on this. She insists that "nobody with any credibility seriously suggests that Scotland would not be welcomed back into the EU".

But she refused to set any kind of timescale, with questions over whether it could hinge on how long it takes to set up the Scottish Pound.

The first minister also said joining the Euro was "not the right option for Scotland".



Border checks


Independence would by its very nature create a border between Scotland and the rest of the UK. The key question is how open or closed this border would be.

The Scottish government is aiming for a "best of both worlds" arrangement for the movement of people, which would see Scotland part of both the Common Travel Area covering the UK and Ireland, and the EU's Schengen free travel zone.

Ms Sturgeon says this would dismiss any scare-stories about Scots needing to produce a passport to visit relatives in England.

However she accepts that there is "significant uncertainty" about the UK's relationship with the EU, which could throw up difficulties when it comes to the movement of goods were Scotland to be a member state.

The paper accepts there would need to be physical customs checks for goods on the main roads between Scotland and England, as well as at freight terminals.

However Ms Sturgeon insists these barriers are "not insurmountable", and that negotiations and proper planning could establish "smooth" trade across borders.



Debts and assets


Part of separating Scotland out from the rest of the UK would include talks about dividing up the state's existing assets and liabilities.

The Scottish government does not want to actually take any of the UK's existing debt onto its own books, but says it would agree to service a share of the national debt via an annual "solidarity payment".

The exact level of this payment would depend on negotiations with the UK government, and would include talks about crucial matters like how pensions would be funded.

There is a practical side to this "solidarity". The new Scottish state would be issuing its own debt, borrowing from the markets, and the hope is that a show of good faith could reduce any premium on that debt.

Prime Minister Liz Truss has just felt the sharp end of the power of the markets, and how valuable the trust of financial investors can be - Ms Sturgeon's government may be looking to learn from that by sending the right signals from day one.



Investment


The paper avoids setting out a fiscal "starting point" for the new Scottish state, although it accepts it would have a deficit of some kind.

The UK government insists that Scots benefit from increased funding per head as part of the union, but Ms Sturgeon argues that having control over all the "levers" could allow her government to boost tax revenues, invest in public services and reject any "austerity" policies.

A key part of this would be the setting up of a new investment fund to harness oil and gas revenues from the North Sea - effectively squeezing the last revenues out of this industry even while moving away from it.

The Scottish government says this could pay for £20bn of infrastructure investment over the first decade of independence, paving the way for the transition to a net-zero emissions economy.

This would include investment in energy efficiency for homes and businesses, hydro-power projects and the hydrogen industry.

In the longer term Ms Sturgeon sees green energy as being at the heart of the new Scottish economy, with the potential for 300,000 jobs in hydrogen alone.

Newsletter

Related Articles

0:00
0:00
Close
Thomas Tuchel Faces Fierce Backlash After Tactical Retreat Costs England World Cup Final Berth
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Canadian Wildfire Crisis Triggers Transnational Air Quality Alerts Ahead of Soccer Finale
UK Housing Reform Debate Intensifies Over Tenant Protection Measures
UK Defence Official Challenges Russian Narrative on NATO Readiness and European Security
UK Names Independent Member to Judicial Pension Board to Strengthen Oversight
UK Parliamentary Committee Sets New Framework for Select Committee Leadership Roles
UK Government Pushes Energy Savings Through School Solar Expansion Plan
UK Committee Reviews Future of Gaelic Broadcasting and Language Support
UK Government Expands Industrial Skills Support in Wales as Steel Sector Faces Change
UK Rejects Russian Claims That European Defence Spending Is Aggressive
UK Schools and Gaelic Broadcasting Among Areas Reviewed in New Parliamentary Inquiries
UK Housing Committee Calls for Stronger Tenant Protections Under Rental Reform Plans
UK Government Faces Pressure for Stronger Oversight After South East Water Failings Report
UK Parliament Opens Inquiry Into Safety of Women and Girls on Public Transport
UK Defence Ministry Appoints Interim Chief Defence Medical Officer During Transition Period
UK Government Announces Five Million Pound Skills Programme for Young People in Port Talbot
UK Government Launches Solar Programme to Cut Energy Costs for Schools
Met Office Warns Extreme Weather Is Becoming More Common Across the UK
UK Government Faces Internal Debate Over New Chancellor Appointment Under Andy Burnham
Andy Burnham Set to Become UK Prime Minister After Keir Starmer’s Resignation
UK Economy Grows Slightly in May as Supply Chain Disruptions Continue to Weigh on Industry
British Steel Moves Into UK Public Ownership to Protect Domestic Steel Production and Jobs
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
Spain and UK Dismantle Gibraltar Border Following Landmark Schengen Integration Treaty
Church of England Rejects Plan to Rewild Thirty Percent of Land by 2030
UK Parliament Examines Future of Gaelic Broadcasting in Scotland
Thames Water Faces Criticism Over Four Million Pounds in Bonus Payments
South East Water Crisis Puts UK Water Regulation Under Renewed Scrutiny
UK Report Highlights Racial Inequality in Homelessness Support Services
UK Government Defends Proposed Social Media Curfew for Teenagers Despite Criticism
Reform UK Gains Recognition as Major Political Party in New Polling
Labour Party Faces Internal Divisions Over Gaza Policy and Asylum Reform
Experts Warn UK Housing and Transport Infrastructure Is Unprepared for Rising Extreme Heat
UK Human Rights Committee Begins Review of Immigration and Asylum Bill
UK Parliament Launches Inquiry Into Declining High Streets Across England
Bank of England Governor Warns of Growing AI Risks to Global Financial Security
UK Public Finance Institutions Mobilize Fifty Billion Pounds to Support Growth and Jobs
UK Parliament Opens Inquiry Into Long-Term Strategy Toward Russia
UK-India Trade Agreement Takes Effect With Zero-Duty Access for Nearly All Indian Exports
Forget Tinder: The Surprising Platform Where People Find Love
UK Government Faces Growing Debate Over Local Control of Immigration Enforcement
UK Biodiversity Forum Highlights Business Need to Protect Natural Environment
UK Parliament to Consider Workplace Temperature Limits Amid Climate Concerns
UK Parliament Considers Independent Immigration Appeals Authority Proposal
BBC Charter Renewal Scrutiny Intensifies as Parliament Reviews Broadcaster’s Future
Parliament Reviews Future of UK Maternity and Neonatal Care Services
UK-India Trade Accelerator Launched to Help Smaller Firms Expand Into Indian Market
UK Business Leaders Meet in Edinburgh to Address Economic Risks From Biodiversity Loss
UK Parliament Prepares for Sir Keir Starmer’s Final Prime Minister’s Questions Before Leadership Transition
×