By Emre Alex Aslan
The largest political party in Scotland is the Scottish National Party (SNP), a nationalist party whose primary objective is to leave the United Kingdom (Scottish Parliament, 2026). But leaving the United Kingdom has financial consequences. Scotland spends more money than it generates, and its currency is controlled by the Bank of England. Scotland could become politically sovereign, but it may never be financially sovereign.
Start with the spending. In 2024–25, Scotland ran a deficit of £26.2 billion. Relative to the size of its economy, that is more than double the UK average (Institute for Fiscal Studies, 2025). Scotland spends more per person on public services than the rest of the UK, but collects less tax on average. University, for example, is free for Scottish students. That is a great deal of spending, and the deficit is currently covered by tax revenue from London and the South East of England. As the IFS puts it, “under full fiscal autonomy or independence, these transfers would end” (Institute for Fiscal Studies, 2025). This raises an obvious question: who pays? An independent Scotland would have to raise taxes or cut spending, either of which could lower the quality of life of the people it is meant to serve.
Then there is the currency. If Scotland left the UK, it would still have to decide what money to use, and the Bank of England sets interest rates. Scotland would have three choices. It could keep the pound, but that defeats the purpose of sovereignty, since it would have no control over its own money (Hardie, 2022). It could create its own currency, but that would take time and money, and a new currency could lose value, making everyday life in Scotland more expensive (McCausland, 2019). Or it could join the EU and adopt the euro, but then monetary decisions would be made by the European Central Bank instead. In each case, where exactly is the sovereignty?
Supporters of independence often point to Denmark. Scotland and Denmark have a similar population and land mass, yet Denmark is far wealthier, with a GDP per capita about twice Scotland’s (Believe in Scotland, n.d.). If Denmark can be independent and successful, many ask, why can’t Scotland? But even Denmark is not fully financially sovereign. Although it has its own currency, the krone, that currency is pegged to the euro (Believe in Scotland, n.d.), which means Denmark must follow decisions from the European Central Bank rather than setting policy entirely on its own. If financial sovereignty is a hard task even for a country as wealthy as Denmark, it would be harder still for Scotland.
Scotland could become independent and leave the UK, but it may never become financially independent. It relies on money from England to fill its deficit, so the real choice is stark: be bound to another central bank and lose true sovereignty, or accept financial hardship in exchange for it.
In my opinion, being part of the UK benefits Scotland. Outside it, Scotland might not be able to afford benefits like free university or social housing. If the people of Scotland fully understood this trade-off, would they still vote to leave?
Sources
Believe in Scotland (n.d.) Denmark. Available at: https://www.believeinscotland.org/denmark
Hardie, I. (2022) Currency choice of an independent Scotland: what role for the central bank? Available at: https://www.economicsobservatory.com/currency-choice-of-an-independent-scotland-what-role-for-the-central-bank
Institute for Fiscal Studies (2025) Scotland relies increasingly on fiscal transfers like other regions outside South East England. Available at: https://ifs.org.uk/articles/scotland-relies-increasingly-fiscal-transfers-other-regions-outside-south-east-england
McCausland, D. (2019) Scotland’s currency conundrum? Available at: https://www.abdn.ac.uk/business/blog/scotlands-currency-conundrum/
Scottish Parliament (2026) Election 2026. Available at: https://www.parliament.scot/chamber-and-committees/research-prepared-for-parliament/research-briefings/2026/5/12/sb-26-26
