What is the financial impact on Scotland of independence?
There are three aspects to this – the initial debts inherited, the cost of the work to become independent and the ongoing financial position of Scotland after independence. The last of these is not part of the process of establishing a new country and so has not been considered here.
So what is the debt aspect of this?
As was discussed under negotiations above, that is not something we can know until negotiations are complete, but there isn't really a scenario where Scotland's debt liability is any higher than it already is inside the UK and there are a number of scenarios where it could be less – and even significantly less. As we have seen through two periods of very large scale 'quantitative easing' right across Europe and indeed the wider world, debt size in comparison to the size of the economy when you are in charge of your own currency is not a major concern. The issue is the cost of servicing it which will not be higher than it currently is for Scotland.
But these questions reveal a lot of set-up costs do they not?
Yes, but this should be put into perspective. If you add up all of the above costs then the total comes to about £25 billion and this is not particularly large when we think about the bank bailout or the emergency Covid measures. And it is dominated by two major costs – the cost of setting up a Foreign Currency Reserve and cost of setting up a Scottish Defence Force. The first of these is a cost but it is also an asset (this is real money you can spend and invest) and the second would be spent over a decade and much of it would come from annual spending on defence which would actually be less than what we are spending at the moment as part of the UK. These are all one-off costs and in the end are no more than a small proportion of how much Scotland's share of the bank bailout cost.
So that is how much the national debt would rise by to become independent?
No, that is the total cost of the set-up and doesn't include Scotland's likely share of the UK's assets. About £15 billion of the £25 billion total would come to Scotland as a share of assets (or would be subtracted from debt). The additional cost to Scotland which would be borrowed is only £10 billion which, as a one-off, really isn't that substantial.
How would we pay for it?
To go back to the beginning, the National Commission would be given bond-issuing powers so would use this to borrow the money as it does its work. At the end this would be consolidated and added to the national debt.
What do we get for our money?
Well, our own country – and a giant economic stimulus. An awful lot of the money it would cost to set Scotland up as an independent country would be spent on goods, services and wages inside Scotland would would help to boost Scotland's economy.