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Economy

Can Scotland afford to be independent?

Yes. Scotland is one of the wealthiest nations in the world. In terms of our total economic output per head we ranked eighth out of the 34 developed countries in the OECD in 2011. We raise more tax and our public finances have been stronger than the UK as a whole over the past 30 years.

Despite all these strengths, many families in Scotland are struggling to make ends meet. We are a wealthy country and yet the full benefit of our vast wealth is not felt by the people who live and work here. With independence, we can make sure Scotland’s wealth and resources work better for the people of Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

How would being independent benefit Scotland’s economy?

The Scottish Government believes that independence is the key to economic success. Scotland needs control over economic and fiscal powers to unlock our potential, boost growth and create sustainable, fairly-rewarded jobs.

Full control of the most effective levers of growth – such as tax, welfare and regulation – will allow Scotland to develop policies designed to deliver sustainable economic growth.

Scotland is already a wealthy nation, but the full benefit of that wealth is not felt by people across the country. With independence, we can turn our rich country into a prosperous society, with the many strengths of our economy delivering more for the people who live and work here.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland continue to use the Bank of England?

Yes. The Bank of England is the central bank for Scotland, as well as for England, Wales and Northern Ireland. It was formally nationalised in 1946 and is therefore an institution and asset owned both by Scotland and the rest of the UK.

For day-to-day monetary policy, the Bank of England is operationally independent of government. It currently sets monetary policy according to the economic conditions across the UK as a whole. The Scottish Government supports the Fiscal Commission proposals that, after independence, monetary policy would be set by the Bank of England according to economic conditions across the entire Sterling Area and that the Bank should be accountable to both Scotland and the rest of the UK through a shareholder agreement.

Source: Scotland's Future, Scottish Government, November 2013.

Currency

What currency will an independent Scotland use?

We propose that the pound Sterling will continue to be the currency of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland join the Euro?

No. The current Scottish Government is clear that Sterling should continue to be the currency of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland have control over fiscal policy?

With independence, Scotland will have full control over fiscal policy, with full powers on taxes, spending and borrowing. Currently, the Scottish Parliament is responsible for just 7 per cent of taxes raised in Scotland. Even with the new tax powers of the Scotland Act, this figure will only increase to around 15 per cent. Only with independence will Scotland have full control over 100 per cent of tax revenue and fiscal policy.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland have control over monetary policy?

Day-to-day monetary policy would be decided independently of government by the Bank of England as it is now, taking account of economic conditions across the Sterling Area. The Scottish Government would seek formal input into the governance and remit of the Bank of England.

Source: Scotland's Future, Scottish Government, November 2013.

Why would an independent Scotland wish to remain in a currency union with the rest of the UK?

A shared currency is in the economic interests of both Scotland and the rest of the UK, as key trading partners. It will make it easier for people and companies to go about their business across the two countries.

Source: Scotland's Future, Scottish Government, November 2013.

How can Scotland be independent if we keep the pound?

Independent countries around the world share currencies. Countries like France, Germany, and the Netherlands do not have their own currency but are independent, and control their own resources.

This approach makes sense for Scotland and the rest of the UK, because it will make it easier for us to trade with each other and will also mean that things like our mortgages and pensions will continue to be paid in pounds and pence, just as they are today.

Source: Scotland's Future, Scottish Government, November 2013.

What contribution would an independent Scotland make to the Sterling Area?

Scotland is the second largest export market for the rest of the UK. It would be damaging to jobs in England, Wales and Northern Ireland, and to the economy of the rest of the UK, if Scotland did not continue to use the pound. It is estimated that the rest of the UK exported £59 billion to Scotland in 2012 – trade that supports tens of thousands of jobs elsewhere on these islands.

Continuing to share the pound with Scotland will also be beneficial for the value of Sterling. The Sterling Area’s balance of payments will be supported by Scotland’s broad range of assets and exports, including North Sea oil and gas. North Sea oil and gas production boosted the UK’s balance of payments by £39 billion in 2012/13.

Source: Scotland's Future, Scottish Government, November 2013.

What would happen to Scottish banknotes in a Sterling Area?

Scottish banknotes will continue to be issued as at present.

Currently Scottish banknotes are issued by three authorised commercial banks in Scotland and are fully backed by Sterling balances held at the Bank of England – meaning they are recognised and accepted as being of equal value to Bank of England notes.

Source: Scotland's Future, Scottish Government, November 2013.

Fiscal Sustainability

Is Scotland a prosperous country?

Yes. An independent Scotland would be one of the top ten richest countries in the OECD – ranking eighth amongst the 34 member countries in terms of GDP per person, compared to the UK which would rank 17th.

The Scottish Government believes in independence because we want to turn this economic strength into tangible gains for individuals and families.

Five of the seven countries that would rank above Scotland in the OECD are small independent nations, such as Norway, with many similarities to Scotland. With the skills and natural resources at our disposal we have the potential to grow faster and in a more sustainable manner.

Source: Scotland's Future, Scottish Government, November 2013.

What will Scotland’s share of national debt be and how will it repay it?

The UK national debt is expected to peak at 86 per cent of UK GDP, almost £1.6 trillion in 2016/17.

The national debt could be apportioned by reference to the historic contribution made to the UK’s public finances by Scotland. Using 1980 as the base year, Scotland’s historic share of the UK national debt in 2016/17 is projected to be approximately £100 billion. This is equivalent to 55 per cent of Scottish GDP.

Other methods for dividing responsibility for the national debts would produce different results. For example the Fiscal Commission’s first report looked at an apportionment based on population. On this basis, Scotland’s notional share of UK debt in 2016/17 is projected to be approximately £130 billion, equivalent to approximately 75 per cent of GDP – still less than the UK.

Under any realistic scenario, Scotland’s projected share of the UK debt as a percentage of Scotland’s GDP will be less than the debt of the rest of the UK expressed in the same terms.

Source: Scotland's Future, Scottish Government, November 2013.

Would an independent Scotland increase national debt in an attempt to grow the economy?

Independence will bring the important decisions about the economy – including responsible borrowing to fund growth – to the Scottish Government and Parliament. It will allow decisions to be made in the interests of the people of Scotland and be based on Scotland’s strengths and opportunities.

The most effective way to reduce national debt is by increasing sustainable economic growth, a priority of the current Scottish Government.

Independence will bring the important decisions about the economy – including responsible borrowing to fund growth – to the Scottish Government and Parliament. It will allow decisions to be made in the interests of the people of Scotland and be based on Scotland’s strengths and opportunities.

The most effective way to reduce national debt is by increasing sustainable economic growth, a priority of the current Scottish Government.

Source: Scotland's Future, Scottish Government, November 2013.

How important will North Sea oil revenues be to an independent Scotland?

Scotland is endowed with significant oil and gas reserves. The tax revenues from these, which currently go to the UK Treasury, would remain in Scotland, generating significant tax revenues for Scotland.

But Scotland’s economy is not dependent on oil and gas. Oil and gas revenue makes up a smaller part of Scotland’s economy than is the case for other oil producing countries. For example, over the period 2000/01 to 2011/12, oil and gas revenues accounted for 15 per cent of Scotland’s overall tax income, compared to 30 per cent for Norway.

Without offshore oil activity, GDP per person in Scotland is 99 per cent of the UK average (within the UK, only London and the South East have higher levels of GDP per capita). This rises to about 120 per cent when a geographic share of North Sea output is included.

The position is similar for tax receipts, with estimated onshore tax receipts per person in Scotland broadly in line with the UK, but £1,700 per person higher than the UK average with the inclusion of offshore revenues.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland have a sovereign wealth fund?

We propose that, and as recommended by the Fiscal Commission, an independent Scotland should establish a Scottish Energy Fund to stabilise revenues in the short-term and to ensure that a proportion of oil and gas tax receipts are invested for the long-term benefit of the people of Scotland.

The decisions of successive Westminster governments to spend Scottish oil revenues rather than investing a proportion of them represent a major lost opportunity. Norway began transferring money into its oil fund in 1996. The fund is now worth £470 billion, equivalent to around £90,000 per person in Norway, and is the largest sovereign wealth fund in the world.

Analysis by the Fiscal Commission concluded that, had it used its oil wealth to establish an oil fund in 1980, Scotland could have eliminated its share of UK public sector net debt by 1982/83. By 2011/12 Scotland could have accumulated financial assets of between £82 billion and £116 billion. That would be equivalent to between 55 per cent and 78 per cent of GDP.

Source: Scotland's Future, Scottish Government, November 2013.

Is Scotland’s economy dependent on oil?

Not at all. Scotland has a mixed and varied economy that supports employment right across the country. Scotland’s economy is diverse, with key strengths across a range of sectors such as food and drink, tourism, creative industries, life sciences, universities, financial services and manufacturing.

Oil and gas revenue makes up a smaller part of Scotland’s economy than is the case for other oil producing countries. For example, over the period 2000/01 to 2011/12, oil and gas revenues accounted for 15 per cent of Scotland’s overall tax income, compared to 30 per cent for Norway.

Source: Scotland's Future, Scottish Government, November 2013.

Taxes and Taxation

How would an independent Scotland use tax powers?

The UK tax system is one of the most complicated in the world. With independence Scotland will have the ability to develop a simpler tax system that is better suited to our economy.

With its current powers, the Scottish Parliament has frozen council tax and delivered the most competitive business rates in the UK. The current Scottish Government has already legislated to replace UK Stamp Duty Land Tax with a new and fairer Land and Buildings Transaction Tax and has made clear its intention to use the opportunities of independence to reduce Air Passenger Duty and Corporation Tax to boost the economy.

Independence will make the Scottish Parliament responsible for its own finances and will provide access to the key economic levers, including taxation, to give Scotland the opportunity to develop policies to stimulate the economy, sustain Scotland’s public services and build social cohesion.

Source: Scotland's Future, Scottish Government, November 2013.

What will tax rates be in an independent Scotland?

On independence, Scotland will inherit the tax system and the prevailing UK rates and thresholds for all taxes. Decisions on specific taxes – including tax rates, allowances and credits – will be made by the Parliament and Government of an independent Scotland. For the first time ever there will be a guarantee that taxes will be set by a government that has the support of the people of Scotland.

Independence will provide the Scottish Government and Parliament with the powers to set tax rates and thresholds which are right for Scotland, allowing Scottish Ministers to develop policies that will deliver sustainable economic growth and a fair society.

Source: Scotland's Future, Scottish Government, November 2013.

Would the current rates and thresholds for personal income tax be altered or would there be any significant changes in the rates of insurance premium tax, VAT or employers’ National Insurance contributions?

Detailed policies on tax and spending will be set out in party manifestos for the 2016 election and thereafter in the first budget in an independent Scotland. There is no requirement to increase the general rate of taxation to pay for the services we currently enjoy in Scotland.

The current Scottish Government’s approach to tax is focused on fairness and economic growth. In Chapter 3 of this paper we set out our early priorities for taxation, were we to form the first government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

How much tax does Scotland currently pay into the UK?

In 2011/12, Scotland contributed £56.9 billion in tax revenue to the UK including a geographic share of North Sea oil. This is the equivalent of £10,700 per person and compares to £9,000 per person in the UK as a whole.

Scotland is estimated to have paid more tax than in the UK as a whole every year since 1980/81, averaging over £1,350 a year higher over that period when adjusted for inflation.rities for taxation, were we to form the first government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Will the way I pay tax change if Scotland becomes independent?

Initially on independence, you will continue to pay your tax and receive tax credits in the same way as you do now. Behind the scenes, we will be working to transition the administration of the tax system to Revenue Scotland, the Scottish tax authority, with a view to making the system simpler and more efficient for the taxpayer.

Source: Scotland's Future, Scottish Government, November 2013.

How would an independent Scotland improve on the UK tax system?

Independence will enable the Scottish Parliament to set all taxes in a way which stimulates economic growth, sustains the public services of Scotland and builds social cohesion. The design of a tax system will be decided by the elected Government and Parliament of an independent Scotland.

The Scottish Government is already reforming aspects of the Scottish taxation system with the new powers devolved by the Scotland Act 2012. This process has been informed by the knowledge and participation of a range of experts and representatives of civic Scotland. The current Scottish Government plans to follow this model of collaborative tax policy development to design a simpler Scottish tax system to replace the complex UK tax code.

Source: Scotland's Future, Scottish Government, November 2013.

How will tax collection be improved in an independent Scotland?

The opportunity to create a tax system that is less cumbersome and less open to avoidance is a benefit of independence. The Scottish Government is setting up a tax authority in Scotland, Revenue Scotland, which will provide the foundations for a tax administration system for all taxes in Scotland. Revenue Scotland will be collecting devolved taxes from April 2015.

There will be a transition phase after independence where, by agreement with HM Revenue & Customs, taxes would continue to be collected through existing HMRC systems. Scotland specific arrangements will be put in place for the collection of all taxes in Scotland as quickly as possible

Following independence we plan to build on the recommendations of the Fiscal Commission report on tax. These include deploying modern technologies, such as online filing. Over the course of the first independent Parliament, the Scottish Government and Revenue Scotland would work together to pursue opportunities for simplification of taxes and tax collection, with the aim of collecting up to £250 million a year of additional revenues, without increasing tax rates.

Source: Scotland's Future, Scottish Government, November 2013.

How long will it take to set up a distinct Scottish tax system following independence?

The Scottish Parliament will have formal legal responsibility for all taxes upon independence. The Scottish Government will make arrangements that will maximise its discretion over the tax system while HMRC continue to collect tax revenues for a transitional phase.

After the transition, Revenue Scotland will collect all taxes in Scotland. We plan that the collection system for personal taxes in Scotland will be in place within the first term of the Scottish Parliament in an independent Scotland.

We will maintain stability of collection for business taxes while we carry out fundamental work with businesses to implement a streamlined collection system.

Source: Scotland's Future, Scottish Government, November 2013.

How much will it cost Scotland to run its own tax system?

The UK tax system is complex and costly. It is widely accepted that there is considerable room for improvement in its design and operation.

Revenue Scotland, working with Registers of Scotland and the Scottish Environment Protection Agency, will set up the necessary administrative systems for Land and Buildings Transaction Tax and Scottish Landfill Tax and cover the basic cost of administration for the first five years of operation for £16.7 million. This is 25 per cent less than HMRC estimated for the cost of setting up and operating for five years in Scotland like-for-like equivalents of Stamp Duty Land Tax and UK Landfill Tax.

Building on that, we will create a tax system in Scotland that is simpler and costs less to administer than the current UK system.

Source: Scotland's Future, Scottish Government, November 2013.

Will I pay more tax after independence?

The process of becoming independent will not, in itself, change the tax you pay. There is no requirement to increase the general rate of taxation to pay for the services we currently enjoy in Scotland.

As is the case in any country, overall tax levels will be set by the government and parliament of the day in response to the needs of the economy and the public services that the Scottish people want.

Source: Scotland's Future, Scottish Government, November 2013.

How will taxes be administered for businesses with headquarters in Scotland but offices in England or elsewhere?

In the interconnected global economy many companies already operate across a number of different countries without difficulty. The Scottish Government has made clear its intention to ensure an independent Scotland remains an attractive and competitive place to do business.

The Scotland Act 2012 means that by 2016, whatever the result of the referendum, there will be differences between the tax systems in Scotland and the rest of the UK. Preparations are in hand to make sure that administration is as simple as possible for businesses in Scotland and elsewhere.

Following a vote for independence, the Scottish Government will seek a double taxation agreement with the Westminster Government. It will be in the interests of both Scotland and the rest of the UK to ensure that cross-border tax affairs for companies and individuals operating in both jurisdictions are as fair and simple as possible.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scottish taxpayers with overseas interests continue to be protected from double taxation after independence?

Yes. The Scottish Government is committed to a tax system that will ensure fairness for cross-border taxpayers, including those due to pay tax in both Scotland and the rest of the United Kingdom.

An independent Scotland will signal its intention to adhere to all international tax treaties in force between the UK and third party states, so that these treaties can continue in force between Scotland and that state. This was what happened, for example, when the Czech Republic and Slovakia adopted the double taxation agreement between the United Kingdom and Czechoslovakia in 1993.

Source: Scotland's Future, Scottish Government, November 2013.

What tax relief would be available to specific sectors in an independent Scotland?

At the moment of independence, Scotland will inherit the tax system and the prevailing UK rates and thresholds for all taxes, including tax reliefs. Thereafter decisions on the tax system and all specific taxes – including tax rates, allowances and credits – will be made by the Parliament and Government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Would the main business rates in an independent Scotland continue to match England?

The Scottish Government has committed to match the poundage for business rates in England for the rest of this parliamentary term. The Scottish Government is also delivering the most competitive business rates regime in the UK with our support for the Small Business Bonus, which currently helps 92,000 businesses.

Our policy is that taxes in Scotland should be competitive to create an attractive business environment, while ensuring that companies pay their fair share of taxes.

Source: Scotland's Future, Scottish Government, November 2013.

Would the fuel duty rate be altered following independence?

With independence we will examine the benefits of introducing a fuel duty regulator mechanism to stabilise prices for business and consumers.

Source: Scotland's Future, Scottish Government, November 2013.

Who would be liable to pay Scottish taxes?

The Scottish Government will build on the existing definition set out in the Scotland Act 2012 and general international protocols to establish a definition of a Scottish taxpayer based on residence. In general, this means that people who live in Scotland for most of the year will pay their taxes here. Where people split their time between Scotland and other countries, including England, Wales and Northern Ireland, there will be clear rules set out in statute to determine which tax authority they pay their taxes to.

Source: Scotland's Future, Scottish Government, November 2013.

Banks

What about bank bail-outs if there is another financial crisis?

A priority of all governments is to ensure that there is no further banking crisis. Improvements to financial regulation and crisis management are taking place in the UK, the EU and globally. The emerging system reduces risk of exposure to the taxpayer. For example, in the UK, the most risky and speculative financial activities will be separated from retail and high street banking following the recommendations of the Vickers Report.

If in the future wider support from governments is required to stabilise the financial system, this would be coordinated through the governance arrangements agreed between the governments of the Sterling Area.

Source: Scotland's Future, Scottish Government, November 2013.

Could an independent Scotland protect depositors on the same basis as the UK deposit guarantee scheme?

Yes. An independent Scotland will comply with EU rules to provide a deposit guarantee of a minimum of €100,000 (£85,000).

Source: Scotland's Future, Scottish Government, November 2013.

What impact will independence have on the basing of the Green Investment Bank in Edinburgh?

The UK Green Investment Bank plc was created in 2012 as a UK funding institution to attract funds for the financing of the private sector’s investments related to environmental preservation and improvement. Under our plans, the Green Investment Bank will continue to be shared between an independent Scotland and the rest of the UK and continue to be headquartered in Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Lender of Last Resort

Who will be the lender of last resort to Scottish financial institutions?

In the Sterling Area, lender of last resort arrangements for financial institutions will continue to operate on a common basis across Scotland and the rest of the UK. This will reflect the reality of our integrated financial system. The Bank of England, as the institution responsible for financial stability, will continue to play its role in the effective functioning of the banking system using its operations under the Sterling Monetary Framework.

Banks receive lender of last resort facilities from across the world, and it is normal for countries to act in a coordinated way to secure financial stability. For example, the RBS and Barclays received significant liquidity support from the US Federal Reserve at the height of the financial crisis.

Source: Scotland's Future, Scottish Government, November 2013.

Macroeconomic Policy

What credit rating would an independent Scotland have?

Countries of a comparable size to Scotland, such as Norway, Finland and Sweden, currently enjoy very low levels of borrowing costs through careful management of the public finances. We expect Scotland to have the top credit rating.

To manage debt and borrowing, Scotland will establish a debt management function.

Source: Scotland's Future, Scottish Government, November 2013.

What will the cost of government borrowing be in an independent Scotland?

The cost of government borrowing will reflect the underlying fundamentals of the economy. Scotland has a strong economy and is in a stronger fiscal position than the rest of the UK. For example, it is estimated that the total amount of tax raised per person in Scotland, including North Sea taxes, has been higher than the equivalent figure for the UK in every single year since 1980/81.

In order to keep borrowing costs low, a government must have clear and credible commitments to maintain sustainable levels of public sector debt. Scotland is well placed, therefore, to have a top credit rating and government borrowing will be undertaken in an affordable and sustainable manner.

Although the expectation would be that Scotland will receive the top credit rating, the example of the UK, which has lost its triple-A rating without a subsequent meaningful increase in borrowing costs, demonstrates that the most important factors are the fundamental strengths and assets of the Scottish economy.

Source: Scotland's Future, Scottish Government, November 2013.

How will an independent Scotland boost the economy when there are pressures on public finances?

Independence will allow Scotland to design policies on tax, spending and regulation for the particular needs of the Scottish economy, to support the growth and innovation that will deliver prosperity and jobs.

All developed economies need to address the challenges posed by changing social and economic circumstances. Scotland, with its strong asset base and skilled workforce, will be in a strong position to face these challenges.

Spending on social protection (on things like welfare benefits and pensions), as a share of GDP, has been lower in Scotland than in the UK in each of the past five years – and lower than in the majority of EU-15 countries during 2011.

Source: Scotland's Future, Scottish Government, November 2013.

What deficit will an independent Scotland inherit and how would this be managed?

Scotland’s deficit is forecast to fall to between 1.6 per cent and 2.4 per cent of GDP in 2016/17 with a historic share of UK debt and to be between 2.5 per cent and 3.2 per cent of GDP if we take on a population share of UK public sector debt. The Office of Budget Responsibility forecasts that the UK will run a deficit of 3.4 per cent of GDP in the same year. The IMF estimates that the average deficit across the G7 economies will be 3.2 per cent in 2016. Based on this approach, the net fiscal balance for an independent Scotland in 2016/17 is therefore forecast to be better than for the UK as a whole.

When assessing a country’s finances an important figure to consider is the current budget balance. This measures the degree to which current taxpayers meet the cost of paying for the public services they consume today and includes a contribution to debt interest payments. If a country is running near to a current budget balance or surplus it may still have to borrow to fund capital expenditure. However, such borrowing will be for long term investment which can be expected to increase the economy’s productive capacity in future years. Such borrowing can therefore be part of a sustainable approach to managing public finances.

Assuming a share of debt interest payments based upon Scotland’s historic contribution to the UK public finances, Scotland’s Current Budget Balance is estimated to be between 0.1 per cent (i.e. a surplus) and -0.7 per cent of GDP in 2016/17. Assuming a population share of debt interest payments, Scotland’s current budget balance in 2016/17 is projected to be between -0.8 per cent and -1.5 per cent of GDP. This compares to a forecast for the UK as a whole of -1.9 per cent.

Source: Scotland's Future, Scottish Government, November 2013.

Business Support to Business

How can Scotland improve business growth?

With independence, the Scottish Government and Parliament will have control over the full suite of economic levers, including taxation, business regulation, infrastructure and investment.

The government of an independent Scotland will be able to create a more supportive, competitive and dynamic business environment.

Within the powers currently available the Scottish Government is pursuing a range of actions supporting sustainable economic growth and higher quality jobs, including the Small Business Bonus Scheme, supporting Foreign Direct Investment, the Scottish Investment Bank and investment in infrastructure.

With independence, future Scottish Governments will be able to develop these policies further to enable Scotland’s businesses to reach their full potential. Future Scottish governments will have the ability to make choices over tax, use measures to boost innovation and exports, promote good industrial relations and support small and medium enterprises.

For example, corporation tax rates remain an important tool for securing that competitive advantage. Following independence we will announce a timetable for a reduction in the corporation tax rate of up to three percentage points. Modelling has already suggested that such a cut could increase the level of output by 1.4 per cent, boost overall employment in Scotland by 1.1 per cent (equivalent to 27,000 jobs) and raise overall investment in the Scottish economy by 1.9 per cent over the long term.

Other key policies to support business that we plan to introduce include:

  • supporting investment, including research and development

  • strengthening the role of the Scottish Investment Bank

  • expanding skill development, bringing together employment and skills policies and putting modern apprenticeships at the heart of our approach

  • expanding manufacturing, with a particular focus on manufacturing opportunities through the development of our offshore energy potential

  • targeted use of loan guarantees

  • reduce Air Passenger Duty by 50 per cent to boost international connections

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland still trade with the rest of the UK?

Yes. The rest of the UK is Scotland’s main trading partner and this will continue following independence.

Source: Scotland's Future, Scottish Government, November 2013.

Will financial services firms still be able to operate across the UK and EU?

Yes. Firms and institutions based in Scotland will continue to operate across UK and EU markets.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland keep its trading relationships in Europe and across the world?

Yes. Scotland will maintain its trading relationships as an independent member of the European Union. As an EU member state Scotland will continue to benefit from participation in the World Trade Organisation and other relevant international trade organisations.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland improve exports?

Independence will enable the Scottish Government to focus investment in Scotland’s overseas representation in ways that will deliver key gains for Scotland’s economy, including more targeted support for companies wishing to export for the first time or increase their existing level of exporting.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scottish industries be promoted in the EU?

Yes. As an independent member of the EU, Scotland will have a seat at the top table in the European Institutions. This will enable the Scottish Government to better promote our economic and social interests in EU affairs.

Source: Scotland's Future, Scottish Government, November 2013.

Will companies be able to make a public share offering in an independent Scotland?

Independence will have no impact on Scottish companies’ ability to make a public share offering. Companies from any country can be listed on a stock exchange provided that they meet the criteria of that exchange.

Source: Scotland's Future, Scottish Government, November 2013.

Would companies based in an independent Scotland still be able to float on the London stock exchange?

Yes. Businesses and individuals in an independent Scotland will retain access to capital markets in the UK and globally. For example, around 2,500 companies from over 70 jurisdictions are listed on the London Stock Exchange.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland need new systems for trading on international financial and stock markets?

No. In the Sterling Area, existing domestic and global systems and infrastructure would continue to facilitate Sterling-based transactions

Global trading activity in any stock will remain as it is now, and continue to depend on the market on which that particular company’s stock was traded.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland need new systems for trading on international financial and stock markets?

Under EU public procurement law, Scottish firms will continue to have access to procurement opportunities across Europe. Independence will give Scotland our own voice in the EU in order to secure improvements for business. At home we will continue the distinctive Scottish approach to generate training and employment opportunities through public procurement.

Source: Scotland's Future, Scottish Government, November 2013.

Employment

How would independence help create jobs?

A country’s people are its greatest asset and it is vital that everyone in Scotland has the opportunity to fulfil their potential. Well rewarded and sustained employment is the best route out of poverty and to tackle inequality.

The actions outlined in Chapter 3 are designed to improve job opportunities and long-term economic resilience. With independence, we will focus on creating better work opportunities, with the aim of creating maximum employment for the entire workforce for the long-term success of Scotland’s economy.

Source: Scotland's Future, Scottish Government, November 2013.

What will happen as a result of independence to people in Scotland employed by companies from other parts of the UK?

Nothing will change as a result of independence. Employers based in the rest of the UK, or further afield, will be able to continue operating in Scotland, and people employed by them will not notice any difference. Today, around 16 per cent of Scotland’s private sector employees work for enterprises that are owned outside the UK.

Source: Scotland's Future, Scottish Government, November 2013.

Will the national minimum wage in an independent Scotland remain aligned to the UK level?

The minimum wage has failed to increase in line with inflation in almost a decade. In every single year since the recession of 2008 the minimum wage has failed to keep up with the cost of living. If it had, some of the lowest paid Scots would be earning the equivalent of £675 more.

We plan that the minimum wage will rise at least in line with inflation.

Source: Scotland's Future, Scottish Government, November 2013.

Will a living wage be introduced?

The current Scottish Government fully supports the Living Wage campaign and its principle of encouraging employers to reward their staff fairly. We have led by example by ensuring all staff covered by the public sector pay policy are paid the Scottish Living Wage. This covers the 180,000 people in Scotland working for central government, its agencies and the NHS

This is part of the Scottish Government’s “social wage” – the contract between the people of Scotland and their Government. Our commitment to support the Scottish Living Wage for the duration of this Parliament is a decisive, long-term commitment to those on the lowest incomes. However, over 400,000 people in Scotland are working for less than the living wage and the majority of these are women.

A priority for action in an independent Scotland for the current Scottish Government would be to fund the Poverty Alliance to deliver a Living Wage Accreditation Scheme to promote the living wage and increase the number of private companies that pay it to make decent pay the norm in our country. We will continue to support and promote the living wage if Scotland becomes independent.

Source: Scotland's Future, Scottish Government, November 2013.

How would the labour market work more effectively in an independent Scotland?

The view of the Scottish Government is that in order to build a fairer and more prosperous Scotland we need to combine employment law that protects the rights of employees with a regulatory regime that encourages companies to grow and create jobs.

A partnership approach to addressing labour market challenges is important. The Scottish Government has already, within the devolved settlement, adopted a strong social partnership approach, working with the voluntary sector, unions, employer associations and employers directly. We will continue that approach after independence, for example by ensuring that there is high quality, readily available childcare supporting parents to find sustained employment and the use of active labour market policies to get people into good quality, sustainable work. This is particularly important for supporting young people into the labour market.

Source: Scotland's Future, Scottish Government, November 2013.

Would laws around unfair dismissal, employment tribunals, industrial relations and trade union rules change in an independent Scotland?

The laws that are in place immediately before independence would remain in place on independence. After that, decisions on specific laws, including in relation to employment, will be made by the Parliament and Government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

What difference would independence make to laws on unfair dismissal, employment tribunals, industrial relations and trade union rules?

While each element of employment regulation has individual impacts, taken together as a system, they need to balance the twin objectives of protecting the rights of employees and encouraging companies to grow and create good quality jobs. The current Scottish Government would reverse recent changes introduced at Westminster which reduce key aspects of workers’ rights. For example on independence we will restore a 90 days consultation period for redundancies affecting 100 or more employees.

Source: Scotland's Future, Scottish Government, November 2013.

Employers

Why should companies base their headquarters in an independent Scotland?

Companies base their decisions on where to locate their headquarters on a range of factors. Many successful companies are already headquartered in Scotland, benefiting from our highly skilled workforce. We believe that the economic benefits that independence will bring will further enhance the attraction of Scotland

With independence, Scotland will be able to send a clear signal that it is one of the most competitive and attractive economies in Europe, with tax rates designed to boost economic activity and support the fast-growing industries that already have a comparative advantage here in Scotland. Corporation tax rates remain an important tool for securing that competitive advantage and for offsetting competitive advantages enjoyed by other parts of the UK, notably London. We plan to announce a timetable for a reduction in Corporation tax rate of up to three percentage points.

Source: Scotland's Future, Scottish Government, November 2013.

Will businesses still be able to brand their products as ‘British made’?

Yes. “Britain” is a geographical term and, as such, businesses could choose to continue to refer to themselves as “British” if they wished. However, “Scotland” and “Scottish” already have strong international brand recognition associated with quality goods and services and innovation. This has resulted in Scotland’s brand being regarded highly in measurement tools such as the Anholt-GfK Roper Nation Brands Index (NBI). Independence also provides us with opportunities to grow Scotland as a brand.

Source: Scotland's Future, Scottish Government, November 2013.

Will intellectual property rights be protected?

Yes. Intellectual property will continue to be protected. As an EU member state, Scotland will meet European regulations and directives on IP rights protection, as well as international patent and trademark protections.

Source: Scotland's Future, Scottish Government, November 2013.

Will independence offer improved intellectual property services?

Yes. Independence will allow Scotland to offer a simpler, cheaper and more business-friendly model than the current UK one which is seen as bureaucratic and expensive, especially for small firms. The UK is one of very few EU countries which does not offer a “second tier”, or “utility” protection scheme which covers the basics of IP protection and is cheaper and quicker to access. Scotland could follow, for example, the German utility model which is more a protection of technical innovations.

Source: Scotland's Future, Scottish Government, November 2013.

Entrepreneurs and the Self Employed

Would the UK Seed Enterprise Investment Scheme continue?

Yes. The current Scottish Government proposes that this scheme will continue on independence. Future decisions on the Seed Enterprise Investment Scheme will be made by the Government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

What can be done to increase Venture Capital Investment in an independent Scotland?

Independence will allow future Scottish governments to explore new approaches to encourage higher levels of equity financing and venture capital, responding to the needs of Scottish SMEs and building on the significant private sector partners in place under the Scottish Co-investment Fund and Scottish Venture Fund.

Source: Scotland's Future, Scottish Government, November 2013.

How could commercialisation of research be enhanced in an independent Scotland?

Innovation policy alone cannot deliver a wholesale increase in innovation activity and impact. It needs to interact effectively with other policies, such as tax, business regulations and environmental policies. Independence will enable the Scottish Government to integrate approaches across public policy to provide better support for the commercialisation of research.

Source: Scotland's Future, Scottish Government, November 2013.

Consumer Protection

Will an independent Scotland be able to offer consumers the same level of protection as the UK currently does?

Yes. Scottish consumers will continue to have the same rights as they currently do, and there will continue to be organisations that offer consumers help and advice when they need it. Independence will enable the Scottish Parliament to tailor consumer protection legislation for Scotland. We have published our full proposals for consumer protection, which are laid out in the paper Consumer Protection and Representation in an Independent Scotland: Options.

Source: Scotland's Future, Scottish Government, November 2013.

When consumers are harmed, will there be systems in place to help them?

Yes. We propose that in an independent Scotland there will be:

  • a single consumer body, which would advocate for consumers’ interests, as well as provide information and education for general consumer matters and regulated industries

  • local community hubs, overseen by the consumer body, where consumers could go to ask for help and receive advice on more than just the consumer issues initially raised – a consumer who is struggling to meet energy bills may, for example, have related, underlying financial or employment issues

  • a more efficient model of trading standards, so that the same level of service exists and the same rules apply, no matter where a consumer lives or a business operates

  • a single ombudsman for consumers to turn to when they cannot resolve disputes with traders, so that they can quickly and easily seek redress without going through the courts

Source: Scotland's Future, Scottish Government, November 2013.

Will steps be taken to ensure all consumers, including the most vulnerable, will be able to access independent advice and education when they need it?

Yes. Under this Government’s proposals, Scottish consumers will be able to receive personalised advice by phone, online, or face-to-face, and while we will take advantage digital technology, we will continue to help those consumers who cannot easily use or access such technology.

Source: Scotland's Future, Scottish Government, November 2013.

How will independence help consumers in practice?

With independence, the Scottish Government will be able to act on issues that are of particular concern for Scottish consumers, such as pay day lending and nuisance calls. For example, this Government would introduce a cap on short-term interest rates, similar to those in place in many countries in Europe, Japan, Canada and some US states. The current Scottish Government plans to regulate the advertising of pay day lenders and place restrictions on the ‘rolling over’ of loans.

Source: Scotland's Future, Scottish Government, November 2013.

After independence, would consumers who suffer damage as a result of cross-border sales with the rest of the UK be protected?

Yes. As an EU member state, an independent Scotland will continue to meet all EU consumer requirements, including those covering cross-border transactions. The current Scottish Government intends to set up an EU Consumer Centre, and consumers will be able to go there for help when they have problems with goods bought from other EU countries.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland continue to protect consumers and businesses from unfair trading practices, such as price fixing?

Yes. Scotland will continue to meet all EU rules and regulations designed to ensure competitive markets, and we will set up a competition authority to ensure these rules are applied.

Source: Scotland's Future, Scottish Government, November 2013.

Personal Finances Financial Products and Services

Will people in an independent Scotland still have access to a wide choice of financial products and services?

Yes. The EU Single Market ensures that products can be sold across borders. Under the European Single European Market, consumers should be able to choose products and services which have been designed by companies anywhere in the EU.

Source: Scotland's Future, Scottish Government, November 2013.

Will independence affect my mortgage rate?

In an independent Scotland mortgages rates will continue to be based on the interest rate set by the Bank of England, which in a Sterling Area will be exactly the same for Scotland as for the rest of the UK, just as it is now.

Source: Scotland's Future, Scottish Government, November 2013.

Will Real Estate Investment Trusts continue in an independent Scotland?

Yes, Scotland will inherit these and similar schemes from the date of independence. Thereafter decisions on specific schemes and support structures – such as Real Estate Investment Trusts – will be made by the Parliament and Government of an independent Scotland. The current Scottish Government recognises the positive impacts of such schemes.

Source: Scotland's Future, Scottish Government, November 2013.

How will my bank account be affected by independence?

Where you have financial products with companies, like banks, these arrangements will continue. Within the Sterling Area, your current account or savings accounts, or your credit cards and mortgages, will continue to be based on the Bank of England base rate which will be the same across the Sterling Area.

Source: Scotland's Future, Scottish Government, November 2013.

Will I still have access to banks and banking services based in the UK?

Yes. In an independent Scotland business and personal customers will continue to have access to banks and banking services in the same way as they do now.

Source: Scotland's Future, Scottish Government, November 2013.

Will bank deposits and other financial products still be protected?

Yes. An independent Scotland will have effective protection for bank deposits and other financial products, maintaining the level of protection currently provided by the Financial Services Compensation Scheme. An independent Scotland will comply with EU rules to provide a deposit guarantee of a minimum of €100,000 (£85,000).

Source: Scotland's Future, Scottish Government, November 2013.

Regulation and Regulators

General Regulation

How will services such as energy, post, telecommunications, rail and water be regulated in an independent Scotland?

We propose that, in an independent Scotland, these industries will be regulated by a combined economic regulator.

Source: Scotland's Future, Scottish Government, November 2013.

What will be the benefit of a combined economic regulator?

A single economic regulator will reduce the number of regulatory bodies business has to deal with in Scotland, while increasing the consistency of decision-making. It will also be a more powerful regulator, with a stronger voice to act on behalf of consumers and ensure that Scottish markets work efficiently.

Source: Scotland's Future, Scottish Government, November 2013.

Does Scotland have the necessary experience to deliver economic regulation?

Yes. Scotland already has responsibility for economic regulation in the water and sewerage sector, and we have an extremely good track record. For example:

  • the average household bill for water services in Scotland for 2013/14 is £54 cheaper than in England or Wales and standards of service are amongst the highest in the UK.

  • the Scottish Parliament, in what was a world first, introduced retail competition for non-domestic customers. Two thirds of business customers now have lower bills as a result.

Source: Scotland's Future, Scottish Government, November 2013.

Will the combined economic regulator have a role to play in protecting consumers?

Yes. We plan to task the Scottish regulator with ensuring open and competitive markets to protect the interests of Scottish consumers while ensuring a fair return on investment for business.

Source: Scotland's Future, Scottish Government, November 2013.

Will independence impose burdens on businesses by making them deal with another regulator in an independent country?

No. There are 27 independent EU countries with their own regulators, and multinational companies operate in several of them already. Industry also frequently deals with a wide range of regulatory bodies even in the same country, such as environmental, planning, and health and safety regulators.

Source: Scotland's Future, Scottish Government, November 2013.

What will independence mean for the regulation of professionals – such as architects and auditors?

The professional regulation systems in place immediately before independence will remain in place on independence. After that, decisions will be made by the government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

What will independence mean for the production of official and national statistics?

Scotland is already part of a UK-wide statistical service that meets professional requirements nationally and for the EU, so we can build on the expertise already in the Scottish statistical service. Following a vote for independence, Scotland will require a designated National Statistics Institute. We propose that the National Records of Scotland should take on that role.

Source: Scotland's Future, Scottish Government, November 2013.

Will freedom of information and data protection be regulated in an independent Scotland?

Yes. The functions of the Scottish Information Commissioner will be extended into the areas currently dealt with by the UK Information Commissioner, including data protection, from independence.

Source: Scotland's Future, Scottish Government, November 2013.

Financial Regulation

How will financial services be regulated in an independent Scotland?

We propose that the key elements of prudential regulation will be discharged on a consistent basis across the Sterling Area.

Major financial institutions operating in the Sterling Area will therefore be subject to the same prudential supervision and oversight in both Scotland and the UK.

As the Fiscal Commission Working Group made clear, such an approach is in the clear economic and financial interests of Scotland and the UK. Macro-prudential policy and micro-prudential regulation of the most significant Sterling Area institutions will be discharged, by the Bank of England, as the shared central bank, or by the regulatory arm of the Scottish Monetary Institute in partnership with the UK body.

Source: Scotland's Future, Scottish Government, November 2013.

Who would be responsible for financial stability?

As part of the proposed Sterling Area framework, the Bank of England will retain its remit for financial stability.

Source: Scotland's Future, Scottish Government, November 2013.

Who will regulate financial conduct?

With independence, we will ensure that all firms incorporated and authorised in Scotland comply with the highest standards expected of the financial industry. The key elements of financial conduct will be co-ordinated with the relevant UK bodies.

Independence will enable Scottish governments to act on issues that are of particular concern for Scottish consumers, such as pay day lending and nuisance calls. For example, we will introduce a cap on short-term interest rates, similar to those in place in many countries in Europe, Japan, Canada and some US states. We will also regulate the advertising of pay day lenders and place restrictions on ‘rolling over’ of loans which saddle those unable to pay off debt with an even bigger loan.

As is the case in all other EU countries, Scotland will be able to design its own institutional framework for financial regulation and have its own regulator. A Scottish regulator will work with regulator for the rest of the UK to set equivalent standards, for instance where there are significant cross-border markets.

Source: Scotland's Future, Scottish Government, November 2013.

Health and Safety Regulation

Would the people of Scotland still be protected by strong health and safety measures?

Yes. The legal system that is in place immediately before independence will continue on independence. Thereafter, decisions on health and safety law, including corporate homicide, will be made by the parliament and government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Energy Regulation

How will the energy market in an independent Scotland be regulated?

As an independent member of the European Union, Scotland will be required to create a national regulatory authority for energy. The Scottish Government’s proposal of a new combined economic regulator will bring together the economic regulatory functions of communications, energy, transport and water. The energy arm of the Scottish Regulator could, in principle, be based at the Scottish offices of Ofgem. This Scottish regulator will work in partnership with the energy regulator in England and Wales in a model of shared regulation of the integrated GB-wide market.

Source: Scotland's Future, Scottish Government, November 2013.

Will independence allow Scotland to have greater influence on key regulatory matters, such as energy prices?

Yes. Powers over key regulatory decisions, currently exercised by Westminster, will transfer to the Scottish Parliament as a result of independence. After that, decisions on the energy market will be made by the Parliament and Government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland be able to take steps to ensure that consumers’ interests are taken into account when energy policy is set?

Yes. The powers of independence will allow energy policy to be designed to protect the interests of consumers and make sure people are treated transparently and fairly. Appropriate information on energy tariffs will help customers decide which company to go with, and help make prices competitive.

The Scottish Government plans that, in an independent Scotland, funding for ‘green investment’ would transfer from energy bills to central government budgets. By passing on these cost reductions to their consumers, energy companies would be able to reduce bills by around five per cent or approximately £70 every year.

Source: Scotland's Future, Scottish Government, November 2013.

Health Industry Regulation

How will an independent Scotland access services from the Medicines and Healthcare products Regulatory Agency?

The Medicines and Healthcare products Regulatory Agency (MHRA) is an Executive Agency established by the Department of Health in England. The MHRA takes forward reserved issues around the licensing, safety and efficacy of medicines and functions on a UK-wide basis. The Scottish Government plans to continue using the services of MHRA in an independent Scotland, unless and until the Scottish Parliament decided to make changes in this area.

Source: Scotland's Future, Scottish Government, November 2013.

Will current legislation to regulate doctors, nurses and other health professionals continue to be in force in an independent Scotland?

Laws which are in force in Scotland prior to independence will continue in force after independence until such times as that legislation is amended or repealed by the Parliament of an independent Scotland.

The regulation of all health professionals will become the responsibility of the Scottish Parliament on independence. The Scottish Government will seek to work in cooperation with Westminster, and the devolved administrations, to ensure that health professional regulation is maintained in the best interests of patient safety and the consistent treatment of healthcare professionals.

The Scottish Government will seek to maintain the current professional current healthcare regulatory bodies, which are funded by fees from registrants, which will continue to operate in Scotland after independence.

Source: Scotland's Future, Scottish Government, November 2013.

Telecommunications Regulation

Will there be a Scottish telecommunications regulator in an independent Scotland?

Regulation of broadcasting is currently carried out by Ofcom, which also regulates telecommunications and postal services. We propose that the economic regulatory functions of Ofcom are included in a combined economic regulator. Capacity will be developed within the new regulator to advise on the regulation of broadcasting content. We also propose that an independent Scotland co-operates with the rest of the UK on managing the spectrum, in the same way that Ofcom and Ireland’s ComReg co-operate at present.

Source: Scotland's Future, Scottish Government, November 2013.

What approach will be taken to spectrum management and licensing and the universal service obligation in an independent Scotland?

Powers over these issues will transfer to the Scottish Parliament as a result of independence. Thereafter decisions on spectrum management and licensing and the universal service obligation will be made by the Parliament and Government of an independent Scotland.

It is the intention of the current Scottish Government that the universal service obligation will operate at least at the same level as the rest of the UK in an independent Scotland. Independence also offers the opportunity for Scotland to set higher coverage obligations on spectrum licences.

Source: Scotland's Future, Scottish Government, November 2013.

Rail Regulation

How will Network Rail be regulated in an independent Scotland?

We propose that, on independence, the Office of Rail Regulation will continue to operate in Scotland while the options for regulation are examined further, although the proposed combined economic regulator will cover aspects of its functions. This will ensure there is no disruption to the operations and safety of rail services.

Source: Scotland's Future, Scottish Government, November 2013.

Aviation Regulation

Will an independent Scotland still be covered by the Civil Aviation Authority?

Powers over civil aviation will transfer to the Scottish Government and Parliament as a result of independence. After that, decisions on this will be made by the Parliament and Government of an independent Scotland.

We propose to retain the current regulatory framework governing aviation on independence through a memorandum of understanding with the Civil Aviation Authority (CAA). The CAA will report to the Scottish Government on regulatory matters affecting aviation in Scotland.

Building on this initial arrangement an independent Scotland can develop its own regulatory body in due course.

Source: Scotland's Future, Scottish Government, November 2013.

How will a Scottish aviation regulator be funded?

The current Scottish Government has no plans to change the current model for the funding of aviation regulation, where the industry covers the cost of regulation.

Source: Scotland's Future, Scottish Government, November 2013.

Regulation of Outer Space Activity in an Independent Scotland

Will Scotland continue to participate in international space agencies?

Yes. Scotland will continue to work with the UK Space Agency and the European Space Agency.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scottish businesses be able to compete for contracts to the UK Space Agency?

Yes. An independent Scotland will continue to be part of the European Union. In line with EU Public Procurement Law companies in Scotland will be able to compete for contracts to the UK Space Agency and the European Space Agency.

Source: Scotland's Future, Scottish Government, November 2013.

Videogame Regulation

Will an independent Scotland use the UK’s videogame age rating system or create its own one?

Powers over videogame age rating system and other age rating systems will transfer to the Scottish Parliament as a result of independence. The rating system in place immediately before independence will be inherited on independence. After that, decisions on these systems will be made by the Parliament and Government of an independent Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Weights and Measures

Would Scotland develop its own legislation on weights and measures, and would this be metric or imperial?

The existing system will continue on independence.

Source: Scotland's Future, Scottish Government, November 2013.

Time

What impact will independence have on the time zone that applies in Scotland?

None. As a matter of common sense the current time zone will be retained.

Source: Scotland's Future, Scottish Government, November 2013.

Transport

Rail

What will independence mean for Scotland’s rail services?

Since 2005, powers to specify and fund work on the Scottish rail network have been devolved. However, discussion about the overall structure of the rail industry remains reserved to Westminster, along with safety and standards.

Independence will not result in any immediate change to rail services. However, future governments of an independent Scotland will have greater flexibility over the budgets available to support rail services and over franchise arrangements and ownership models.

Source: Scotland's Future, Scottish Government, November 2013.

Will railways in an independent Scotland be re-nationalised?

The existing ScotRail franchise ends on 31 March 2015 and competitions for the replacement ScotRail and Caledonian Sleeper franchises are underway. The ScotRail franchise will be let for 10 years with a review after five years. The Caledonian Sleeper franchise will be let for up to 15 years.

After these franchises have completed, the government of an independent Scotland will, under existing European legislation, have the opportunity to consider all options for the delivery of passenger services, including public sector options.

Source: Scotland's Future, Scottish Government, November 2013.

Will cross-border services still run?

Yes. Cross-border rail services operate throughout Europe every day, linking cities and people across national boundaries. Governments work in partnership to deliver rail services of economic and social importance. Scotland and the rest of the UK will be no different in that respect.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scottish customers be disadvantaged over fare pricing for these services?

No. An independent Scotland will have the opportunity of a greater role in determining cross-border franchise arrangements. Today in Europe, passengers can book a ticket on services connecting the Netherlands, Belgium and France without nationality playing a factor in fares costs. There is no reason why a similar situation should not apply between Scotland and the rest of the UK.

Source: Scotland's Future, Scottish Government, November 2013.

What will happen to rail fares in Scotland post-independence?

The Scottish Government is already responsible for specifying regulated rail fare increases within its franchise agreements. Independence will not change these arrangements.

The current policy in Scotland has led to lower rail fare increases than in England. As of January 2013, the maximum rail fare increase for regulated fares was 3.1 per cent in Scotland, compared to an average increase of 4.1 per cent in England. In addition, off-peak fares will be frozen in Scotland. Within the next franchise period from April 2015, the Scottish Government has committed to bearing down further on the cost of fares for passengers by ensuring that ScotRail peak fares do not increase by more than inflation, and ScotRail off-peak fares will rise not greater than one per cent below inflation.

Source: Scotland's Future, Scottish Government, November 2013.

Will franchises being let now still apply?

Yes. The Scottish Government proposes no change to current plans for the ScotRail and Caledonian Sleeper franchises and these will continue to operate as planned.

Source: Scotland's Future, Scottish Government, November 2013.

Will UK franchises for cross-border services have to be renegotiated with the Government of an independent Scotland?

With the exception of the Caledonian Sleeper, the Westminster Government is currently responsible for cross-border franchises and receives all of the money paid by operators. This arrangement will need to be renegotiated. Negotiation will not, however, affect the day to day delivery of the franchises. Given the importance of these routes to Scotland and the rest of the UK, it will be in both countries’ interests to put in place arrangements to ensure the continued operation of cross-border services.

Source: Scotland's Future, Scottish Government, November 2013.

Will plans for high speed rail between Glasgow and Edinburgh be affected by independence?

No. The Scottish Government is currently developing plans for high speed rail infrastructure in Scotland. This will improve the journey times for future Scotland to England services and also provide a fast, dedicated capacity in high speed rail service between Edinburgh and Glasgow. It will also free up the central belt so more services to other areas of Scotland can be created.

The current planning is independent of what is being developed in England, but will clearly be designed to be compatible. Independence will have no impact on these plans.

Source: Scotland's Future, Scottish Government, November 2013.

Will plans for high speed rail between Scotland and England be affected by independence?

Current confirmed Westminster plans exclude Scotland and Northern England, with the next phases of high-speed rail only due to connect London with Birmingham in 2026 and then Leeds and Manchester by 2033.

While this investment will bring some benefits between the Central Belt and London, the economic benefits to Scotland, the North East and far North West of England are marginal compared to those which will accrue to other areas of the UK. Indeed, Westminster’s own analysis shows that the economies of Aberdeen and Dundee may suffer from such a partial approach.

Despite a much stronger business case from a network that includes Scotland and previous calls, not just from the Scottish Government but councils in the North of England and civic and business Scotland too, it is only now that Westminster has agreed to plan for high speed to go beyond Manchester and Leeds.

Consistent with the Borderlands initiative, an independent Scotland could work together with northern English councils to argue the case more strongly for High Speed to go further North faster. High Speed Rail will also attract air travellers from Glasgow and Edinburgh to London, freeing air slots to maintain air access to Aberdeen and Inverness, which with rail improvements will maintain and enhance the connectivity of these economically vibrant cities.

Source: Scotland's Future, Scottish Government, November 2013.

What will happen to Network Rail in Scotland?

Network Rail is a private company limited by guarantee and will continue to operate as it does now, regulated by the Office of Rail Regulation. The Scottish Government will expect to become a member of Network Rail with membership rights equivalent to those currently held by the Department for Transport to ensure it best meets its obligations with respect to an independent Scottish Government.

Source: Scotland's Future, Scottish Government, November 2013.

What will happen to Network Rail’s debt, which is currently guaranteed by the Westminster Government?

An independent Scotland will continue to meet its rail financing obligations – including the servicing of regulatory debt for Scotland. This is in line with the determination made by the Office of Rail Regulation for the period 2014 to 2019. The Scottish Government will continue to meet any obligations with respect to the financing of Network Rail in Scotland, and, if required, the Scottish Government will provide its own Financial Indemnity Mechanism (FIM) to support this. Under these circumstances Network Rail would pay a fee to the Scottish Government to reflect the benefit it received from the FIM.

Source: Scotland's Future, Scottish Government, November 2013.

If I buy a travel pass or season ticket before independence that continues into independence will it be valid for the whole period?

Yes. The Scottish Government proposes no change to the ScotRail franchise, which will operate as normal. All passes and tickets will remain valid.

Source: Scotland's Future, Scottish Government, November 2013.

Roads

Who will be responsible for the road network in an independent Scotland?

The Scottish Government is already responsible for roads. This will not change with independence.

Source: Scotland's Future, Scottish Government, November 2013.

Will there be road charging in an independent Scotland?

The current Scottish Government has no plans to introduce road charging.

Source: Scotland's Future, Scottish Government, November 2013.

Buses and Trams

Who will be responsible for public transport, such as buses and trams, in an independent Scotland?

Many powers relating to public transport are already devolved and in an independent Scotland decisions on them will continue to be made as they are now by the Scottish Parliament and Government.

However, some further powers will also transfer to the Scottish Parliament on independence. For example, the registration and funding of bus services is already devolved but the responsibility for licensing and permits for bus operators, drivers and vehicles currently rests with Westminster.

Source: Scotland's Future, Scottish Government, November 2013.

Aviation

What will happen to Air Passenger Duty in an independent Scotland?

Air Passenger Duty is currently set by the Westminster Government. With independence, the Scottish Parliament will be able to set Air Passenger Duty at a level that suits Scotland – or abolish it entirely.

It is estimated that Air Passenger Duty will cost Scotland more than £200 million a year in lost tourism spend alone by 2016. In addition to the direct losses to the Scottish economy, another report earlier this year found that reducing Air Passenger Duty would increase receipts from other taxes, such as VAT.

As an early priority for action following independence the current Scottish Government proposes a 50 per cent reduction in APD, with a view to eventual abolition of the tax when public finances allow.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland protect links to London airports?

The number of flights to London from Scotland has been reducing.

With independence, the Scottish Government will be able to protect routes. The present Government would propose to promote Public Service Obligations on routes that benefit the economy most. The current Scottish Government will prioritise a 50 per cent reduction in APD, with a view to eventual abolition of the tax when public finances allow.

Source: Scotland's Future, Scottish Government, November 2013.

Will there be more direct flights into an independent Scotland?

More long haul flights operate into independent countries, for example into Denmark and Ireland which are similar in size to Scotland.

The government of an independent Scotland will be able to develop an aviation policy that suits the people of Scotland. This could include the develop of new routes to strategically important markets, such as Asia, boosting tourism by encouraging the use of direct flights to Scottish airports, and working at the top table in the European Union – as an independent member state – to develop more efficient and co-operative international regulation.

Source: Scotland's Future, Scottish Government, November 2013.

How will air traffic services be managed in an independent Scotland?

Airspace will be managed in the same way as it is currently managed with the emphasis on allowing the free and safe movement of aircraft.

The Westminster Government has a 49 per cent shareholding in National Air Traffic Services (NATS) and one of its two operational centres is based at Prestwick.

On independence, it is the intention of the current Scottish Government that NATS will continue its services for Scotland. The Scottish Government will negotiate an appropriate share for Scotland of Westminster’s stake in NATS.

Source: Scotland's Future, Scottish Government, November 2013.

Freight

What will independence mean for regulation of the road freight sector in Scotland?

The road freight sector is governed primarily through European legislation, which is aimed at ensuring the free movement of goods and fair competition across Europe. EU rules govern drivers’ hours and working time regulations; common rules on international movement of goods across member states; vehicle standards; vehicle weights and dimensions; initial driver training and drivers Certificate of Professional Competence; the operator licensing regime; health and safety requirements; and a range of regulations aimed at improving road safety including rules governing the carriage of dangerous goods.

As an independent Member State of the EU, Scotland will continue to comply with European regulations. Implementation of EU legislation into UK law (and exercise of any aspects where there is a degree of discretion) is currently a reserved matter, however, and so this responsibility would transfer to the Scottish Parliament as a result of independence. Given the extent of EU regulation, the scope for significant change to the rules is limited but the current Scottish Government plans to achieve a healthy and sustainable freight industry in Scotland that would be able to compete effectively in the European single market.

Source: Scotland's Future, Scottish Government, November 2013.

Would relevant regulations be aligned with the rest of the UK?

Would a Scottish Government want to pursue a distinct course over time? As a member of the EU, an independent Scotland will meet its obligations under EU law with regards to the haulage industry. Regulation that is in place immediately before independence will be inherited on independence. Thereafter decisions on the regulatory framework will be made by the Parliament and government of an independent Scotland in line with Scotland’s interests and to suit Scotland’s circumstances.

Source: Scotland's Future, Scottish Government, November 2013.

What effect would independence have on the movement of goods by road between Scotland and the rest of the UK, and between Scotland and other countries?

Under EU regulations, all hauliers carrying out the movement of goods under ‘hire and reward’ between member states must have a standard international operator’s licence and a community authorisation licence.

In a modern global economy many companies already operate across a number of different countries without difficulty. The Scottish Government has made clear its intention to ensure an independent Scotland remains an attractive and competitive place to do business.

Source: Scotland's Future, Scottish Government, November 2013.

Motoring Services

Will an independent Scotland have its own driver and vehicle licencing and driving standards agency?

Powers over these issues will transfer to the Scottish Parliament as a result of independence. It is the current Scottish Government’s intention to continue to use the services of the Driver and Vehicle Licensing Agency, Driving Standards Agency, and Vehicle and Operator Services Agency in the immediate post-independence period. These agencies are currently selffunded through user fees. Scottish users, therefore contribute fully to the cost of providing these services.

Independence will allow the Scottish Parliament to determine the best way to deliver these services in the future. The current Scottish Government proposes the creation of a new, streamlined Scottish Motor Services Agency, which will bring together the functions of DVLA, DSA, VOSA, and Vehicle Certification Agency. By the end of the first term of an independent Parliament, the current Scottish Government would plan to have completed the design and development work, with a view to the Agency going live early in the second Parliament.

Source: Scotland's Future, Scottish Government, November 2013.

Will we need to reapply for driving licences if Scotland becomes independent?

No. The Scottish Government intends that the driver licensing regime will remain in place at the point of independence. This will ensure all licences granted by the DVLA are recognised in Scotland.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland change the UK legislation for bus, coach and lorry drivers’ Certificate of Professional Competence training?

This is a decision for future elected Governments of an independent Scotland. This Government has no plans to change the present regime for Certificate of Professional Competence training.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland retain the role of Traffic Commissioner?

Yes. The Scottish Government’s intention is that an independent Scotland will retain the Traffic Commissioner’s role.

Source: Scotland's Future, Scottish Government, November 2013.

Ferries

How will ferry services be managed in an independent Scotland?

Ferries are an essential part of Scotland’s transport network. The quality of our ferry services impacts on us all, affecting both island and mainland communities. The Scottish Government is fully committed to delivering first class sustainable ferry services to our communities, stimulating social and economic growth across Scotland.

The planned improvements to Scotland’s ferry services, as set out in our recently published Ferries Plan will enable our rural and remote communities to thrive, and continue to make a significant contribution to Scotland’s economy. With the fully integrated transport system that independence will deliver, we can ensure the best alignment between ferries and other modes of transport.

Source: Scotland's Future, Scottish Government, November 2013.

Maritime

How will maritime services be delivered in an independent Scotland?

What will change in maritime functions with independence? Scotland has approximately 60 per cent of the seas and coastline of Great Britain. However, the essential maritime institutions (the Maritime and Coastguard Agency, Northern Lighthouse Board and Marine Accident Investigation Branch) are currently controlled by Westminster. The Scottish Government currently has no say in how these essential services are delivered.

Independence will let Scotland shape and develop maritime services that reflect our unique coastline and give the people who use our seas the support they need. The Scottish Government intends that the Maritime and Coastguard Agency will continue to provide its services for the safety of mariners. It also plans that the Northern Lighthouse Board and Marine Accident Investigation Branch will continue its role unchanged in an independent Scotland, funded by existing arrangements for the collection of light dues at Scottish ports through Trinity House.

It will then be for future governments of an independent Scotland to look at how these services would be provided in the years ahead. This may, if appropriate, include developing a distinct Scottish organisation to deliver some or all of these functions.

Source: Scotland's Future, Scottish Government, November 2013.

Will an independent Scotland remain a member of international organisations like the International Maritime Organisation and the International Civil Aviation Organisation when independent?

Aviation and maritime regulations will continue to apply in an independent Scotland as these activities, by their nature, are subject to international regulations. The Scottish Government intends that Scotland, as an independent state, will become a member of these organisations.

Source: Scotland's Future, Scottish Government, November 2013.

Will the Royal National Lifeboat Institution continue to provide services?

The Royal National Lifeboat Institution is totally independent of government and serves the Republic of Ireland, the Channel Islands and the Isle of Man as well as the United Kingdom. The RNLI is an integral part of the maritime search and rescue structure. Its purpose is to save lives at sea and the organisation has a proud history of providing lifeboat services and volunteer crews. Decisions about the RNLI are for the Institution itself, but we can see no obstacle to it continuing to play its vital role around the coasts of Scotland as it does around the rest of these islands.

There is a long history of maritime search and rescue being co-ordinated across borders and boundaries with all available resources and vessels deployed to assist in any incident. This will continue to be the case after independence.

Source: Scotland's Future, Scottish Government, November 2013.

Will Scotland register ships?

Yes. The present Scottish Government intends that an independent Scotland will set up a Shipping Register.

Source: Scotland's Future, Scottish Government, November 2013.

Will the standards for vessels be the same as in the rest of the UK?

Most standards for shipping and vessel safety are set by international agreement through the International Maritime Organisation and the EU and these will continue to apply in an independent Scotland as they do for the rest of the UK.

Source: Scotland's Future, Scottish Government, November 2013.

Will there be any changes to the operation or structure of harbour authorities?

All of the Statutory Harbour Authorities in Scotland operate under their own local legislation. There is no reason for this to change with independence.

Source: Scotland's Future, Scottish Government, November 2013.