Economics of Independence Scotland's Economy

Independence will generate a £109,000,000,000 asset windfall for Scotland

Written by Michael Gray

scotlands-futureAn independent Scotland will inherit a fair share of the UK’s £1.3 trillion assets. This is of huge significance. These assets will generate a huge economic windfall for the people of Scotland of £109 billion. It will make Scotland far wealthier and allow us to reshape our institutions’ towards priorities that suit Scotland.

How will this happen?

After a ‘Yes’ vote negotiations will share UK assets between Scotland and the rest of the UK. This is because Scotland’s taxes have contributed to UK assets for generations. Hundreds of billions of pounds of our taxes have poured into infrustructure, equipment and property. As an independent country, Scotland is entitled to its share of these resources.

Why does this affect me?

These resources will provide strong foundations for an independent Scotland. Scotland has vast natural resources and a highly skilled workforce across a range of sectors.

These assets will enhance those strengths and ensure that Scotland will be a rich and successful nation. This means the tax system will have the resources to operate effectively; defence services will have resources and equipment; social services will have infrastructure to ensure health, education and pensions can be improved. Beyond a ‘Yes’ vote, these assets ensure that you can have confidence in Scotland’s economic future.

Calculating Scotland’s assets

There are two methods of calculating what assets Scotland is entitled to. By a current population share, Scotland is entitled to 8.4% of UK assets. By this estimation, Scotland would receive £109 billion of UK assets. A second method would be to distribute assets on the basis of Scotland’s tax contribution to those assets since figures were available in 1980/81. Last year Scotland paid in 9.9% of total UK taxation. That would equal £129 billion of assets for an independent Scotland.

A conservative estimate

These figures are calculated from the UK Whole of Government Accounts. (page 178) £109 billion is a conservative estimate.

The full UK Asset Register – which is based on UK tangible, intangible and fixed assets – has not been fully compiled since 2005. A more detailed reading of recent UK acquisitions has therefore not been given a full breakdown. For instance, between 2000 and 2005 defence acquisitions were £30.3 billion higher than disposals.

Westminster suppressing the figures?

Previous Asset Registers were compiled by Westminster in 2001 and 2007. Yet there remains no plans for a 2013 register. This delay appears to have political motivations as without an asset register Scottish voters will lack up to date information on the huge range of assets than an independent Scotland is set to inherit.

Asset Scotland facts: good for negotiation and the economy

_65816111_017181755-1Through the Asset Register 2007 and the UK Whole of Government Accounts, which have been studied by Business for Scotland, we can generate outline figures and provide certain details on Scotland’s position.

This information adds up to two important facts. One, Scotland will be in a strong negotiating position after a ‘Yes’ vote. Two, our share of UK assets will place Scotland in a strong economic position. This is significant when establishing a framework of cooperation after a ‘Yes’ vote.

This is the case for a number of reasons.

A) It will be in Westminster’s interest to negotiate in good faith when sharing assets and on wider issues such as defence, common trade and common travel cooperation. Scotland’s balance of payments is crucial to the UK economy. Scottish trade and exports are crucial for UK business. Scotland also contains assets of significance for the rUK government. Defence ministers have already stated that Scotland will be entitled to its share of defence assets. The Department for Work and Pensions has already confirmed that state pension provision will be unaffected by independence.

B) If Westminster refused to negotiate fairly, it would be a disaster for the rest of the UK. Without a fair deal on UK assets, Scotland can drop UK liabilities. This includes UK national debt. Scotland would then save over £80 billion immediately. The rest of the UK would be far worse off as a result.

C) £23 billion of assets were attributed to Scotland in the old UK Asset Register. (half of this is the valuation of the road network) Yet an independent Scotland would inherit a far greater value of assets. This gives Scotland substantial room for negotiation in decided what assets are best for Scotland.

D) Scotland does not need all the assets currently stationed in Scotland. For example the Trident nuclear submarines are valued at £2.1 billion. This will strengthen Scotland’s position in negotiation as UK politicians are desperate to move the missiles.

Unaffordable and unnecessary weapons of mass-destruction

Unaffordable and unnecessary weapons of mass-destruction

E) Scotland does not need certain high cost items located outside Scotland. Scotland’s share of UK defence assets equals £8 billion, as of the UK Asset Register.

This will include assets like the UK aircraft carriers (currently without aircraft) constructed to project UK power and influence. Capital spare military items were valued at £5.6 billion in 2007. Apache helicopters were valued at £2 billion. UK guided missiles and bombs were valued at £1.5 billion. Tornado Aircraft, Merlin HMI Helicopters, Trafalgar Submarines and Frigate Type 23s were worth a total of £5.5 billion.

Scotland will have a defence policy that suits Scotland’s interests. Relinquishing the Scottish share of certain assets will therefore have a substantial and positive impact on Scotland’s financial accounts.

F) There are many assets that it will make perfect sense for Scotland to control. These include Dover House in Whitehall, Abercrombie House in East Kilbride, military bases situated in Scotland, Jobcentre buildings in Scotland and Dungavel detention centre. Scotland’s share of UK Embassies and British Council resources will also provide the foundations for international engagement. This, incidentally, is the position that was proposed in the White Paper on page 341.

G) Therefore the Scottish Government has proposed that Scotland’s assets are “realised in a combination of ways – through physical assets, cash transfer and continued use of assets through shared service agreements.” (pages 341-45 of the White Paper)

Assets and liabilities

The No Campaign has sought to highlight the liabilities that an independent Scotland will inherit to scare people away from bringing more powers to Scotland. While these liabilities were accumulated by Westminster’s economic misjudgements, it’s a basic error to focus on liabilities in isolation.

Every business person and accountant knows to look at both sides of the spreadsheet. When you consider your personal finances you also consider your incomings and your outgoings. Even if you have debt, it is crucial to count your assets. Focusing solely on Scotland’s liabilities is a con which ignores the other side of the story. The assets matter too!

Sharing assets fairly makes sense

Scotland has been an owner of the UK and investor in its projects. It’s like being partners in a business. Often business people decide that they can gain greater control and freedom through cashing in their share of a business and establishing independent enterprises. The assets are shared. The new organisations can focus on new opportunities.

At a government level this is not a new experience. After devolution, vast assets were transferred from the Scottish Office to the Scottish Executive. In an international context, almost every issue of asset sharing between the Czech Republic and Slovakia was agreed through negotiation. This was part of a peaceful and short transition between June and November of 1992.


An independent Scotland will inherit around £109 billion pounds worth of UK assets. While Scotland already has strong economic foundations, this windfall will be of great benefit. As a result, the people of Scotland can have confidence in the financial position of an independent Scotland.

About the author

Michael Gray

Michael is Head of Research with Business for Scotland.

A graduate from the University of Glasgow, he has carried out a series of interviews with academics, politicians and the public in Denmark, Iceland and Ireland. Michael's on twitter @GrayInGlasgow.


  • This is stupid as in this sense than 85% of Scottish’s assets will be going to the rest of UK. As all of the British tax payers have contributed to Scotland’s infrastructure and buildings. The assets won’t just go one way and you know that.

    • why use words like stupid when you clearly have not done your research. Ask questions – all building are considered land locked and therefor the property of the country they are based in. Oil and Gas is landlocked so it is Scottish and so is English shale. Mobile assets the gold in the bank of england, military hardware etc are all shareable by population. The figure quoted takes that into account what people have to understand is that if you take the debt you get roughly matching assets but if assets are withheld you don’t take debt.

      Hope that helps your understanding.

    • Ahem, perhaps if your ate going to call people stupid it might be an idea to fact check first.
      Those ‘Scottish assets’ are included in the ‘UK’ numbers.
      Not included however are UK overseas assets!
      My understanding is that UK overseas and national asset value almost exactly balance that of the UK national debt for Scotland’s puposes.
      The residual amount Scotland would be liable for on independence could be cleared easily from the savings we would make on debt interest payments we make towards the UK national debt, growing at about £150bn a year on average.

  • As oil reserves could be seen as a national asset and as Salmond reckons they’re worth a few trillion the rUK will be taking 90% of that then.

    There isn’t a shale gas industry in rUK yet so that could not be considered under the terms of a divorce being negotiated this year. It’s one big unknown, it could be worth £1 or £1000000000.

    So all this talk of £129 billion going to Scotland but still keeping all the oil is just wishful thinking.

    • The situation is very clear – all assets that are land locked oil, gas, coal etc are owned by the geography they are located in. All other assets owned by the UK government such as defence assets warships etc that are mobile and cash reserves overseas assets such as embassies etc are shared on a population basis. So there is no call on just over 90% of the oil from England but yes you are right any shale gas in England will be England’s and not UK’s.

      If the assets are not shared in this way as defined by the Vienna Convention of 1984 then the debts are also not shared on a population basis. This is the guiding principle of international law on the matter and so no if there were no currency union then there would be no deal on debt.

      • One other point to consider; under the North Sea amongst the rigs is between 3,000bn to 23,000bn tonnes of coal, available as synthetic natural gas(syngas) this has about half the calorific value of natural gas but does possess the virtue of being almost limitless ie in 50 years we have taken 6bn tonnes of oil & gas from the North Sea. At that rate there is over 1,000years supply.
        I’d be interested in your estimate for the potential revenue due on that lot, spread over a millenia, obviously!

    • Except that the income from oil & gas comes from the profits from the commodity sold on the open market, not on reserves still underground.
      Good try.

  • Hugh

    The essence of commerce is to negotiate robustly but fairly. There comes a point when a conclusion is required or the exercise ends in failure and exhaustion. It is no different when states negotiate. Stalemate is in neither parties’ interest.

    How the rUK acts will be closely watched by the international community. It has a lot to lose beyond prestige. Scotland being the smaller party offers opportunities for other countries to tap into as the obligation to use UK systems and services will reduce and be replaced by more dynamic ones provided by other countries

  • If we’re talking about fair division of assets, shouldn’t North Sea Oil and Gas be considered an asset and divided per head of population?

    • In such cases mineral and carbon assets are viewed to belong to the country they reside within. So Scotland gets 98% of oil, rUK gets a lot of the gas (not much left) and other assets buildings defence assets (ships and planes etc)are split on a population share. Its all negotiable though some defence assets such as nuclear subs etc Scotland doesn’t want fair share of.

      UK wants Scotland to take fair share of debt Scotland wants sterling union (as will rUK politicians after Yes vote) no fair share of all assets no deal to have fair share of debt. there is a deal to be done that will be in the interests of all parties but unionist politicians want to keep Scotland so they will bluff all the way up to a Yes vote.

      • Oh dear no! Currency union with sterling, are you sure?
        After the hoops the treasury has jumped trying to reduce The Deficit (not the national debt), and the volatility of Sterling with simply the prospect of Brexit, what price the pound when Scotland removes £150bn-ish from the UK balance of payments and Frankfurt and Paris make their grab for the €euro passported trade of the City of London?
        Best put as much clear blue water between us and Sterling before we get dragged down with it aswell!

    • London was completely refurbished on the £300bn the exchequer has extracted from the North Sea. A further £400bn was simply squandered by financial ineptitude(compared with Norway).
      How much would you allow for on that in your estimates for who owes what?

  • Just out of interest what is the current annual running costs of Scotland? And what percentage or fiscal cost would we be saving by the loss of trident and other assets we don’t really want?

  • My concern is that the £109 billion windfall repeatedly gets mentioned and later on a paragraph states that the uk government could be £80 billion worse off (our share of uk debt) if they don’t negotiate fairly as we couldwalk away, this leads me to think we are talking in general terms of a £29 billion windfall?

    A lot of haggis could be bought but in terms of a country’s capital base it would not be significant or sufficient.

    A general worry is the mention of “jam today” if we vote yes, why are SNP offers of better pensions, shorter working life (compared to proposed uk ideas) and employment for all not being put in to practice now?

    The mention of oil is a short term funding option…….. 30, 40 or 50 years of oil is nothing, absolutely nothing in the life of a country, what happens afterwards?

    Mike Froude MD

    • Mike wrote

      >”The mention of oil is a short term funding option…….. 30, 40 or 50 years of oil is nothing, absolutely nothing in the life of a country, what happens afterwards?”

      For an MD you seem remarkably unaware of the world of commerce in Scotland. Is it your case like that of the lies told by the hapless Darling and his ilk that Scotland, unique in the developed world, would be unable to reindustrialise it’s economy, and rebalance it’s base so as to increase revenues from other industries?

      Is it also your case that Scotlands economy is totally dependent on oil?

      If it is, as it seems to be, you really need to spend some time reading and researching the articles on this site, Wings Over Scotland,, Yes Scotland. And the recently published white paper.

      Scotland is a rich country. But the best of our riches are the people who live and work here. Who for to many years have been compelled by economic forces created in London to leave to live.

    • You are absolutely right, Mike, taking assets will also entail taking debt; quid pro quo.

      But your concern over oil running out is illusory, since it will run out whether we are independent or not. We have a choice – 50 years of 90% of the revenues, or 50 years of 10% of the revenues – which make more economic sense?

    • Google ‘Norway sovereign wealth fund’ and find out how they’ll benefit from their oil reserves long after its dried up but then, anyone who took the time to look at the scottish situation wouldn’t have to ask….

  • Where would we find the figures divisions of incomes generated through the intellectual property office IPO? It would be interesting to find out how much this office gains from copyright, trademarks etc from Scottish companies, designers, inventors, musicians & artists.

  • I am gobsmacked!

    If UK assets are £1300 billion and Scotland’s assets are only £23 billion (1.77%) when its population share would be £109 billion (8.4%) then this, all by itself, is a damning indictment of the UK’s “pooling and sharing of resources” that the unionists like to propound as a key benefit if not the key benefit of the union. I note however that when they do so the words “fairly” or “fair” are very carefully avoided. No wonder! Scotland’s share of UK assets is only 21% of what it should have been.

    And it is even worse than that if Scotland has indeed over-contributed to the UK coffers. On the figure provided in the article that Scotland’s true asset share should be more like £129 billion, then Scotland only got 17.8% of what it should have.

    Fair shares? Not even close.

  • Just wondering why proceeds of separation are labelled a ‘windfall’ three times in this article. If a wife were to divorce from her husband, keeping a share of their home and assets, I do not think that would be termed a windfall.

    • Except that currently only a fraction of those assets are consider as Scottish in Scotland’s national accounts – see Mike Simms comment above.

    • Steve it is 8.4% and the answer is yes.

      However if you read this research (which remains unchallenged by any economist / think tank) you will see that it is an absolute fact that Scotland did not intact create any of the UK’s debt at all.

      It was reported in several mainstream newspapers and several other rang around to get economists to say the research was flawed and I know of that said that the research underestimated the surplus Scotland would have had. Please read and think about it with an open mind and if you do you will see that the Scottish Governments acceptance that Scotland should accept a population share of UK debt is in fact very reasonable.

      • Why should a rUK give any of the its assets to an independent Scotland. Mr Salmon threatens not to accept any liabilty to any share of the UK national debt if there is no currency agreement. I think the majority in rUK dont want any of Mr Salmons wish list. No social union, dual nationality, currency union or an open border. At the moment many in England who have monies invested in Scottish companies, like myself, say they will transfer these out of Scotland following a yes vote. A lot you nationalist say will be to the benefit of both countries fail to take into account of public opinion in the rUK should a yes vote occur. Political parties in the rUK will not be in a rush to give Scotland anything with an election due in 2015.

        • If, as you suggest, you have money invested in a Scottish business, why would you remove that money if the business is performing and will continue to do so under an Independent Scotland? Why are you so desperate to invest currently and not in the future? Toys and pram?

        • If they are good investments please let me know who they are so i can put my money in thanks.

          If they are bad investments well a fool and his money are easily parted!

          Oh an who is Mr Salmons?

          Thanks Donald you prove by your post that people who know nothing about Scotland shouldn’t be listened to never mind put in charge of Scotland!

        • Turn your question the other way around for a second.

          SO instead of “Why should a rUK give any of the its assets to an independent Scotland. Mr Salmond threatens not to accept any liabilty to any share of the UK national debt if there is no currency agreement.”

          make it into

          “Why should Scotland take on any of the rUK debt if the UK is is not going to give any of its assets to Scotland?”

          The white paper says clearly, as does Mr Salmond that the correct thing to do is for Scotland to take on its share of debt. It is very difficult for anyone to argue against that view as anything but fair.

          It’s like a divorce – the couple of a house worth £300k, but have mortgage of £100k outstanding on it. There is no way either partner could argue “I’ll take the house, you take the mortgage”.

          Scotland MUST take its fair share of what’s owed, it must also get its fair % of the “house”.

          • So ‘a share’ ok, that’ll be 2/3 of a frigate, 1/4 a Trident and some Elgin Marbles, not sure how we can talk about some sort of divvying up of fixed assets??

            Or will it just be a nominal value given by accountants which rUK will just stump up?

            And how will some of the day-to-day stuff work; road tax (presumably still via the DVLA), will we have to pay a premium?

            My concern is not self-determination but that self-determination is exactly what most Scots won’t get , or at least not much more than they’ve got at present.

            What will we inherit? A bloated Public Sector, employing a greater percentage of people than over the border, socialist policies for free everything. And a leftie agenda which will, it pains me to say, drive businesses away via higher taxes.

            You can talk about the Scottish inventiveness but wait until that turns into higher taxes.

            But wait, it’s alright, we’ve always got the oil!

          • Only in a situation where it is also in receipt of a fair share of the assets. Look up the Vienna convention of 1984. If Scotland took the debt share without the assets we would be the laughing stock of the world – we need to negotiate debt and assets shares together.

      • If Scotland has no debt ? why would Scotland want to take any debt ?

        Why saddle yourself , you can have your own central bank in Edinburgh and keep your own pounds .

        If you prefer to float them or tie them to sterling , well and good .

        Is it common in world history for a nations self determination to be so preoccupied in minutiae ? If you wanted to leave , why did you not try harder to leave .

        Unless “Scotland good , England Bad ” is more like
        “Scotland is not that good , and England is not that bad “.

        • The SNP Government believed that it was fair for Scotland to take a population percentage of the debt – there were many who argued against it but the SNP position was a velvet divorce and shared currency and some shared services and regulation etc – so independent but with recognition that independent nations do share some sovereignty with neighbours for trade purposes. there were several options for currency that worked as I said all the way through the referendum and setting up our own would be viable.

          No it is particularly uncommon – England? You mean UK surely? Or do you really believe that Scotland is a region of England? I am from Hexham my view is that Westminster is bad not England. Its an outdated, incompetent distant disinterested and dysfunctional form of government.

          If I ever meet anyone who tried harder to leave than me I will shake their hand.

    • I agree that if Scotland were to become independent that it would be entitled to assets and liabilities. However continued use of rUK institutions and protection by rUK taxpayers is not an asset and is not something that there is any precedent for anywhere else. So the threat to walk away from all debt over this issue is saying that they would walk away from all assets, which would leave the rUK in a better position than is being claimed as the debt would be offset against the assets such as currency reserves.

      This is the problem with the argument, it has deteriorated down to threats not facts.

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