Independence is Good for Business: Economic Policy

Scotland operates within a UK economic framework where the key levers of growth are firmly held in London. Monetary policy, borrowing powers, VAT, corporation tax, and industrial strategy are all reserved to Westminster. Scotland doesn’t have a central bank so interest rates are set in London too. 

That means Scottish businesses operate under economic conditions not shaped in line with Scotland’s needs, but in response to what works for London and the South East, both politically and economically.

Scotland’s economic potential is strong - but the lack of control over core economic levers limits our ability to build the kind of economy we see in similar-sized independent countries like Denmark, Norway and Ireland.

Corporation tax was one of the levers Ireland used to pull ahead of Scotland

Ireland has been able to use the economic levers of independence to build prosperity. When Ireland joined the EU alongside the UK, 60% of its foreign trade depended on Britain. Today, that figure is below 10%. 

Ireland now outperforms Scotland on multiple fronts: it has created two to three times more billion-dollar companies, has higher average wages, and enjoys lower rates of unemployment, poverty, and child poverty.

Independent Scotland could promote the wellbeing economy

An independent Scotland could implement an industrial strategy designed around its unique assets - from renewables to life sciences, food and drink to advanced manufacturing. 

With full fiscal powers, we could offer targeted tax incentives and fairer business rates that reward companies contributing to national wellbeing - not just short-term profits. 

That means moving beyond a narrow focus on growth or low taxes, and towards a broader set of goals: rewarding businesses that create good jobs, invest in communities, uphold environmental standards, and support employee wellbeing.

A strategy based on local needs

With control over taxation and regulation, Scotland could offer targeted incentives not just to attract big corporations, but to support the kinds of businesses we want to grow: those that deliver long-term value for society. 

Crucially, this approach would allow Scotland to shape regional development and investment strategies closer to home. Instead of relying on UK-wide plans skewed towards the South East of England, a Scottish Government with full economic powers could invest directly in the infrastructure, industries, and skills needed in different parts of the country - from the Highlands to the central belt.

Scotland needs to borrow to invest in infrastructure

Borrowing powers are a major constraint on Scotland’s future. While the UK Government can borrow at scale to fund infrastructure and growth, Scotland’s devolved borrowing powers are tightly capped. That limits our ability to invest in the long-term projects we need such as transport and connectivity to green energy and innovation.

Countries with the most developed infrastructure tend to have the most resilient economies. Yet under the current settlement, Scotland can’t make the transformational investments that would unlock future prosperity.

Take the Faroe Islands, a small nation that has spent decades building tunnels to connect its scattered islands. Scotland, by contrast, is held back. Our government struggles to fund major infrastructure unless it aligns with Westminster priorities, often focused on London and the South East. But Scotland’s needs are different. We are a geographically diverse country with rural and island communities that need tailored solutions.

Independence would give Scotland the power to invest in its own future on its own terms. We could build the infrastructure, skills, and connectivity that support local businesses, boost regional economies, and create lasting prosperity.

Conclusion

The ability to set economic policy in line with our own democratic choices would bring clarity and accountability. Policies could be designed for Scotland’s economy - not imposed on Scotland as a consequence of what London wants. Independence would offer agility: the chance to respond more quickly to change, to back key sectors, and to build long-term prosperity for businesses of every size.

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