Why Not Scotland The sourced case for Scottish independence

Currency, mortgages and savings

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The case for independence

  • The Scottish Government says Scotland could keep using the pound after independence, with no formal agreement with the UK needed.1
  • Over time, an independent Scotland would have its own central bank and its own currency, the Scottish pound.1

How it works now

Monetary policy is a reserved matter under Schedule 5 of the Scotland Act 1998, which lists “the issue and circulation of money”, the exchange rate and the Bank of England. That means decisions on the currency are made at UK level, not by the Scottish Parliament.2

The challenges

  • No date has been set for moving to a Scottish pound.1
  • In 2014 the UK Government published “Scotland analysis: assessment of a sterling currency union” (13 February 2014).3

How Scotland would meet them

  • Continue using sterling “for a period” after independence. It says no formal agreement with the UK would be needed for this.1
  • Set up an independent Scottish Central Bank from the start, responsible for financial stability.1
  • Introduce a Scottish pound “as soon as practicable” through a managed transition, once the central bank is credible, reserves are sufficient and public finances are sustainable.1

Source: Building a New Scotland, Paper 3 (Oct 2022)

Still to be settled

How long would Scotland use sterling before switching?

No date has been set. The Scottish Government says the timing would depend on conditions being met.1

What would happen to existing mortgages and savings?

This has not been settled, and we have not yet found reliable published analysis. We will add sourced material when it becomes available.

How much of the UK's debt would Scotland take on?

This has not been settled, and we have not yet found reliable published analysis. We will add sourced material when it becomes available.

Sources

  1. Scottish Government, Building a New Scotland: A stronger economy with independence, “Currency and fiscal policy”, 17 October 2022.
  2. Scotland Act 1998, Schedule 5 (Reserved matters).
  3. UK Government, Scotland analysis (collection of papers), 2013–14.