Why Not Scotland The sourced case for Scottish independence

Public finances

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The case for independence

  • Revenue per person in Scotland (£17,718) was almost identical to the UK average (£17,720) in 2025-26, including North Sea revenue.1
  • The IFS says an independent Scotland's public finances “could look very different post-independence” and would depend on future policy decisions.2
  • Comparable independent countries such as Denmark, Ireland and Norway have had higher GDP per person than the UK in every year since 2000.8

How it works now

Government Expenditure and Revenue Scotland (GERS) is an annual official-statistics publication from the Scottish Government. It estimates the public revenue raised in Scotland and the public spending for Scotland, under current constitutional arrangements.1

For 2025-26 it estimates total revenue of £98.3 billion (including £3.2 billion from the North Sea) and total spending of £123.6 billion. Spending per person was £22,281 in Scotland against £19,561 for the UK average, while revenue per person, including North Sea revenue, was £17,718 against £17,720.1

The challenges

  • Scotland's notional deficit was 10.9% of GDP in 2025-26, compared with 4.2% for the UK, according to GERS.1
  • The IFS says “a deficit on the scale currently implied would be unsustainable” for an independent Scotland without significant growth or policy changes.2
  • The Fraser of Allander Institute says the Scotland-UK spending gap of around £2,720 per person is “the widest on record”, and that most of this year's extra revenue came from two policy decisions — a UK-wide rise in employer National Insurance and a Scottish Government tax-threshold freeze — rather than underlying economic growth.3
  • In 2014 the UK Government published its assessment of an independent Scotland's finances, “Scotland analysis: Fiscal policy and sustainability” (May 2014).5

How Scotland would meet them

  • Set fiscal rules for borrowing, with independent assessment by the Scottish Fiscal Commission.4
  • Set up a Debt Management Office.4
  • Use North Sea windfall revenue mainly for long-term investment or reserves rather than day-to-day spending.4

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

What independent analysts say

The IFS says the difference is driven by “higher government spending” in Scotland, and that GERS figures have limited bearing on what an independent Scotland's finances would look like. It also says “a deficit on the scale currently implied would be unsustainable” for an independent Scotland without significant economic growth or policy changes.2

Responding to the Scottish Government's 2022 economy paper, the IFS said that “an independent Scotland would need to make bigger cuts to public spending or bigger increases to taxes in the first decade following independence than the rest of the UK.”6

Reacting to the 2025-26 GERS figures, the Fraser of Allander Institute said Scotland's improved fiscal balance was “driven by growth in onshore revenues”, but that the £2,720 per-person spending gap with the UK is “the widest on record”, and that two policy decisions — the UK Government's rise in employer National Insurance Contributions and the Scottish Government's freeze on higher income tax thresholds — accounted for a significant share of the year's extra revenue.3

Still to be settled

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

No debt division has been agreed, and it would be a matter for negotiation after any vote for independence. One approach — a population-based share, as modelled by David Comerford of the University of Strathclyde in August 2025 — would give Scotland around 8% of UK public debt, roughly £190 billion in 2023 terms (about £130 billion net of Bank of England holdings), leaving both Scotland and the rest of the UK with a similar debt-to-GDP ratio to the pre-independence UK's.7 The actual figure would depend on how debt and assets were divided and on policy choices made after independence.

How quickly could the deficit be reduced, and how?

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, Government Expenditure and Revenue Scotland 2025-26, 12 August 2026.
  2. Institute for Fiscal Studies (João Sousa), 2025–26 GERS estimates: IFS response, 12 August 2026.
  3. Fraser of Allander Institute, University of Strathclyde, GERS 2025-26 reaction: Scotland's net fiscal balance narrows despite drop in North Sea revenues, 12 August 2026.
  4. Scottish Government, Building a New Scotland: A stronger economy with independence, “Currency and fiscal policy”, 17 October 2022.
  5. UK Government, Scotland analysis (collection of papers), 2013–14.
  6. Institute for Fiscal Studies (David Phillips), An immediate response to the Scottish Government’s paper on independence and the Scottish economy, 17 October 2022.
  7. David Comerford, University of Strathclyde, An independent Scotland's share of UK public debt, Discussion Paper 25-5, August 2025.
  8. Scottish Government, Independence in the modern world. Wealthier, happier, fairer: why not Scotland? — 10 key facts (Paper 1), 14 June 2022.