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Scottish independence: how do other small economies fare?

Were Scotland to become independent, it would naturally be a smaller economy than as part of the UK. The successes of such economies are highly contingent on state and society’s ability to capitalise on the strengths and minimise the vulnerabilities of small population size.

Nations, regions & cities

How might Scottish independence affect Northern Ireland’s economy?

Scotland and Northern Ireland share a long history, shaped by generations of migration and trade. If Scotland were to become independent, it would be likely to affect Northern Ireland: how would ultimately depend on the form of constitutional change pursued.

Business, big & small

Scottish independence: how do business leaders view risk and opportunity?

Ahead of the 2014 independence referendum, businesses in Scotland were typically focused more on the risks posed by uncertainty than on potential opportunities. Circumstances have changed – most notably the UK’s exit from the European Union – which may lead to different assessments in a future vote.

Nations, regions & cities

How might Scottish independence affect the costs of international trade?

If Scotland were to become an independent country, there would be a new international border with the rest of the UK. The additional costs that are inevitably created by borders would affect trade, making it harder for Scottish firms to do business with the rest of the UK.

Lessons from history

Scottish independence: what lessons from the break-up of Czechoslovakia?

The dissolution of Czechoslovakia and the creation of the Czech Republic and Slovakia as independent nation states and economies caused limited disruption. This experience offers insights for Scotland as it considers independence from the rest of the UK.

Lessons from history

How has deindustrialisation shaped debates about Scottish independence?

Since the 1960s, Scotland’s constitutional politics have been moulded by competing assessments of the nation’s contemporary and future economy. The decline of industrial jobs and the economic changes that have followed underpin current independence debates.

Attitudes, media & governance

How important is economics in the debate on Scottish independence?

Voters’ perceptions of the economic outcomes of independence played an important role in the result of Scotland’s referendum in 2014. Following Brexit, the debate is no longer just about Scotland’s relationship with the rest of the UK, but also the European Union.

Nations, regions & cities

Scottish independence: what are the big economic questions?

Scotland may soon have a second referendum on whether to remain part of the UK. Economic issues will be a key part of the debate – from the fiscal policy institutions needed for an independent country to choice of currency and the future relationship with the European Union.

Nations, regions & cities

Higher North Sea revenues: what impact on Scotland’s independence debate?

Government revenues from North Sea oil and gas production in 2022 are on track to be at their highest level in over a decade. This may give a boost to the campaign for Scottish independence in the short term.

New Post • Nations, regions & cities

What would be the central economic issues around independence for Wales?

While an independent Wales currently looks unlikely, the prospect of greater devolution or even future independence raises the issue of whether the different policy choices made so far in this part of the UK imply a different sort of Welsh economy.

Lessons from history

Ireland’s economy since independence: what lessons from the past 100 years?

A century ago, advocates and opponents of Irish independence presented arguments about the future of Ireland’s economy outside the UK. With the benefit of hindsight, we can see that predictions made by both sides have come to pass at different points over the past 100 years.

Lessons from history

What were the economic consequences of Irish independence?

Following partition of the island of Ireland in 1921, the two successor states had to forge separate paths, both politically and economically. The experience of the early years of the Irish Free State offers lessons for today’s debates about independence from the UK.

Attitudes, media & governance

What do we know about voter turnout in parliamentary elections?

Voter turnout has declined in recent decades, reaching a 20-year low in the UK’s 2024 general election. While overall turnout has fallen, some groups – including young people and ethnic minorities – are even less likely to cast their vote. Alternative electoral systems might boost voter engagement.

News

Ideas for the UK – election economics nations and regions week

What are the big issues under debate in Northern Ireland, Scotland and Wales? And what’s happened to ‘levelling up’ – the ambition to address the UK’s long-standing geographical inequalities touted in the 2019 election? Our fifth election newsletter looks at cities, regions and the devolved nations.

Nations, regions & cities

What are the key election issues in Scotland?

The campaign north of the border is largely focused on issues that are the Scottish government’s responsibility. But a change of government in Westminster – with a new focus on growth, fiscal strategy, energy policy and the role of the Scottish Office – could see a big shift in policies in Scotland.

News

Banks, budgets and birthdays

Three years on from its inception, the Observatory has posted over 650 articles and collected more than 2.5 million page views. With tensions in the banking sector, a new first minister in Scotland, and the 25^th anniversary of the Good Friday Agreement coming up, there’s plenty more to be covered.

Attitudes, media & governance

Who do polls suggest will be the next first minister of Scotland?

The Scottish National Party will soon announce its new leader. Polls suggest that party members are choosing between one candidate with the support of most SNP parliamentarians and one who is more popular with the public. During the campaign, discussions of Scottish independence have been limited.

Nations, regions & cities

An independent Scotland: what would be the options for economic success?

If Scotland were to become independent, there would be significant short-term economic challenges. The prospects for the nation’s economy over the longer term are uncertain and would rest on the outcome of tough choices about currency, public finances and membership of the European Union.

New Post • News

The price of everything

The Bank of England has raised its policy interest rate for the fourth time in a row, yet still expects inflation to reach double digits before the year is out. Policy-makers must rise to the challenge of mitigating the cost of living crisis, while supporting the post-Covid-19 recovery.

Public spending, taxes & debt

How might an independent Scotland manage public debt?

How public debt is managed is a critical question for any national government acting on behalf of its current and future citizens. It is of particular importance to a newly independent country making choices about its approach to public spending and taxation.

News

Conflict, climate and constitutions

Establishing sustainable and affordable sources of energy is a central policy challenge. But cutting off funds to Putin’s war machine, and continuing to make progress towards net zero, may come at the expense of further escalation of the cost-of-living crisis.

Banks & financial markets

Currency choice of an independent Scotland: what role for the central bank?

Were Scotland to become independent, its choice of currency would be a key decision. Whether the country remained in a formal or informal currency union with the UK, adopted the euro or established a new currency would have significant consequences for the role of a Scottish central bank.

News

War stories

As the war in Ukraine enters its second month, headlines are dominated by stories of appalling violence and destruction. Economists are responding by offering expertise where they can, while hoping for a swift end to the conflict.

Lessons from history

Currency choice: what lessons from Ireland for an independent Scotland?

Monetary and fiscal stability were key issues during Scotland’s 2014 independence referendum. Independent Ireland’s experience of navigating alternative currency options and their implications for fiscal policy may offer lessons for the present.

News

Tearing up the rulebook

War has erupted in Europe, the international rulebook torn up. Vladimir Putin’s invasion of Ukraine is a stark reminder of the region’s turbulent geopolitical and economic history. Rules and expert guidance are essential if this crisis is to be navigated swiftly.

Lessons from history

Scotland’s future: what insights does a political economy perspective add?

The economic aspects of Scottish independence are of great importance, but only when viewed as part of a process that will change institutions, governance, power relations and behaviour – and where economic concerns stand alongside concerns with social and moral priorities.

News

Scotland’s past and future

As in the UK as a whole, there are significant inequalities between regions in Scotland. The success of levelling-up policies, designed to offer economic support to areas in need, will depend in part on how well policy-makers understand Scotland’s industrial history.

New Post • Nations, regions & cities

What is devolution, how is it changing and where might it go next?

Recent UK governments have ‘devolved’ power to Scotland, Wales and Northern Ireland. This is a simple idea, but the UK brand of devolution is complex. Its stability has been threatened by both the Covid-19 pandemic and Brexit.

Banks & financial markets

What would the currency options be for an independent Scotland?

If Scotland were to become independent from the rest of the UK, it would need to decide what currency to use. Options include sticking with sterling, creating a new national currency or joining a monetary union, such as the eurozone.

Nations, regions & cities

How might an independent Scotland build fiscal capacity?

Scotland currently has limited tax-raising powers: its government does not collect or legislate over the broad-based taxes that are needed for high fiscal capacity. Developing a sense of common purpose is critical for nation-building – and it would be a key issue for an independent Scotland.

Public spending, taxes & debt

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

With higher levels of public spending but lower tax revenues than the UK average, Scotland would likely have a large budget deficit were it to become independent, which may make spending cuts or tax rises necessary. The long-term fiscal outlook would depend on the performance of the Scottish economy.

Banks & financial markets

What new institutions of economic policy would an independent Scotland need?

Building trust in a post-independence Scottish government’s commitments to sound economic policy and sustainable public finances would require strong, operationally independent institutions – including a debt management office, a strengthened fiscal watchdog and a new monetary authority.

News

Arms race

Even as the UK’s vaccine rollout continues to gather momentum, the moral and economic arguments for ensuring global immunisation mount. At home, promoting an even recovery across regions and sectors remains paramount.

News

Northern Ireland at 100

The centenary of the creation of the Irish border offers a chance to reflect on the economic performance of the two Irelands over the last 100 years, as well as looking at some policy lessons from the past.

News

Ideas for the UK: election economics international week

What is the right level of migration for the UK? Is the country on track to meet its commitments on tackling climate change? And how will big changes in the world trading environment affect the economy? Our fourth election newsletter looks at some of the global issues at stake in the election.

Nations, regions & cities

Update: what big policy challenges face Scotland’s next first minister?

Humza Yousaf, Scotland’s first minister has recently stepped down. His successor, John Swinney, faces a number of economic challenges related to growth, an ageing population, regional inequality and the transition to net zero.

New Post • Lessons from history

What did Adam Smith think – and why does it matter today?

This year is the tercentenary of Adam Smith – 300 years since the birth of the man widely considered to be the father of economics. Jesse Norman MP, author of Adam Smith: What He Thought, and Why It Matters, talks to Romesh Vaitilingam about Smith’s life and the enduring importance of his ideas.

Nations, regions & cities

What are some of the big policy challenges facing Scotland’s new first minister?

On Monday, Scotland’s new first minister will be announced. Nicola Sturgeon’s successor faces a number of economic challenges related to growth, an ageing population, regional inequality and the transition to net zero.

Energy & climate change

How is the cost of living crisis affecting net-zero policies?

Rising energy prices have sparked calls to scale down UK decarbonisation policies, as well as to resurrect extraction of shale gas by fracking. But public support for pursuing ‘net-zero’ carbon emissions remains high; and the transition will bring benefits from health improvements to green jobs.

Public spending, taxes & debt

How will UK tax rises to fund social care affect the devolved nations?

The UK government’s announcement of a rise in national insurance contributions to pay for additional health and social care spending has been met with some criticism in the devolved nations. The practical implications of the decision to ring-fence the funding are limited, but it could remain a source of tension.

Nations, regions & cities

What are the implications of coronavirus for fiscal devolution in the UK?

The UK’s 1999 devolution settlement means that decisions about the public health response to Covid-19 are made by the three devolved governments of Scotland, Wales and Northern Ireland. What are the implications for the economic policy response and the future of fiscal devolution?

Nations, regions & cities

How hard will coronavirus hit Scotland's economy?

Just like everywhere else, Scotland’s economy is facing unprecedented stress from the Covid-19 crisis. How it performs in the months ahead will depend on the policy choices of Scottish ministers – and how these differ, complement or cut across UK-wide policies.