TRAPPED: Nobody Asks Scotland · The chapters

Chapter 27: The First Budget

"This will not be known until Scotland actually becomes independent."

Scottish Government, *A Fresh Start with Independence: Questions and Answers*, on the starting budget deficit, 8 October 2025.

Nobody will tell a Scot what happens to their own money on the first morning, and not because the number is unknowable: it is the output of a negotiation Scotland has never been permitted to open, and no body anywhere holds the duty to produce it.

The receipts

The source list for this chapter, as the publisher maintains it. Archive links are given wherever a cited page could move or die.

• Median weekly earnings, full-time employees, Scotland £773.80 and UK £766.60, 2025: Scottish Government, Annual Survey of Hours and Earnings 2025, Employee Earnings page, first published 27 October 2025, from ONS ASHE (1 per cent PAYE sample; 2025 estimates provisional). Arithmetic: £773.80 less £766.60 is £7.20.
• Income tax divergence by income, 2026-27, and "around 55%" paying less: Scottish Government, Scottish Income Tax 2026 to 2027: technical factsheet, 13 January 2026, Table 2, column "Position relative to the rest of the UK in 2026 to 2027", read directly from the live page in session. Scottish rates and bands set since 2017-18 under the Scotland Act 2016.
• Rent: Scottish Government, Private Sector Rent Statistics, Scotland, 2010 to 2025, 25 November 2025, Key Points: two-bedroom £921 (+£28), Lothian £1,356, Dumfries and Galloway £569; "figures are based predominantly on advertised rents".
• Energy: Ofgem, press release, Energy price cap will rise by 4% from October 2026, 26 August 2026: £1,663 to £1,723 on the updated Typical Domestic Consumption Values; £1,862 to £1,935 on the old; and Ofgem's news page of the same date: "Costs cannot be compared directly to previous periods because of this change." The cap is "the average across England, Scotland and Wales".
• Waiting list: Public Health Scotland, Stage of treatment waiting times, 29 September 2026, data to 31 August 2026: 588,073 individuals, "around 1 in 9 of Scotland's population", 62.8 per cent of new outpatient waits completed in 12 weeks or less; the 95 per cent standard as in chapter 28.
• GERS 2025-26 headline (£25.3 billion; 10.9 against 4.2 per cent of GDP) and the IFS "unsustainable": chapter 16 Sources. Reserved UK debt interest allocated to Scotland, £9.0 billion in 2025-26: Scottish Government, GERS Methodology Publication 2025-26, Frequently Asked Questions.
• IFS Report R88, Michael Amior, Rowena Crawford and Gemma Tetlow, Fiscal Sustainability of an Independent Scotland, November 2013, executive summary, quoted verbatim: the 4.1 per cent, "about £6 billion in today's terms", the 1.9 per cent best case, the 8 and 7 percentage point equivalents, and "very sensitive to the assumptions made in the model".
• Sustainable Growth Commission, Scotland - the new case for optimism, May 2018, paragraphs B4.61 to B4.68 (legacy deficit 5.9 per cent of GDP excluding oil) and B12.16 to B12.20 (under 3 per cent by year nine).
• IFS, David Phillips, Weak public finance position implies more austerity for an independent Scotland, 15 June 2018, quoted verbatim ("If this is austerity, then austerity would be extended"; "not implausible"; "should be commended for setting out how they would approach this issue head on").
• Fraser of Allander Institute, Some early thoughts on the Sustainable Growth Commission report, 25 May 2018, quoted verbatim ("No small country listed in the report is currently running a fiscal deficit of 6%").
• UK public sector net borrowing 4.35 per cent of GDP and net debt excluding the Bank of England 90.6 per cent, 2025-26: OBR, Public finances databank, March 2026 Economic and Fiscal Outlook edition, aggregates sheets (edition to be confirmed on obr.uk before print; see Verification notes). Not the same series or vintage as GERS's 4.2 and never netted against it.
• Scottish Government, A Fresh Start with Independence, 8 October 2025, Part Two, "What would the public finances of an independent Scotland look like?", quoted verbatim ("this publication does not present an estimate of the starting fiscal position of an independent Scotland"), read directly from the gov.scot page in session. Companion Questions and Answers, same date: Q4 ("This will not be known until Scotland actually becomes independent", the epigraph); Q10 (sterling would go on being used; "would not prevent sterling from being used"); Q11 ("individual private contracts would continue as before"; exchange "would be voluntary"); Q15 ("In practical terms most headquarter functions are already carried out in London. In an independent Scotland this is likely to be formalised."); Q26 ("Will EU membership mean rejoining the Common Fisheries Policy (CFP)? A. Yes."), read directly from the PDF in session. Same main paper, "How would pensions work?": the State Pension passages quoted verbatim, and the dependency on the UK Pensions Commission and State Pension age review "expected to report in 2027".
• HM Government, Scotland analysis: Work and pensions, Cm 8849, April 2014: paragraph 4.16 quoted in full to the end of its sentence; paragraph 4.26 ("are paid for out of the UK-wide annually managed expenditure budget as the UK is better placed to take on the risk associated with the long-term pension liabilities of these major schemes"; police and fire "met out of Scottish delegated budgets"; civil service and armed forces schemes integrated UK-wide); paragraphs 4.29 to 4.33 and footnote 21 ("in the region of £100 billion", liabilities as at 31 March 2012, "Wider analysis would be required").
• State Pension "payable worldwide, regardless of the recipient's country of residence or their nationality" (Richard Harrington, HC Deb 20 April 2017, c846) and 679,000 pensioners abroad receiving uprating: chapter 19 Sources.
• Scottish Public Pensions Agency, Scottish Teachers' Pension Scheme Annual Report and Accounts 2024/25, published February 2026: liability £30.2 billion at 31 March 2025 (section 1.9); unfunded, funded from the Scottish Government's AME budget (1.10); cash requirement from the Scottish Consolidated Fund £195.9 million (Table 1); discount rate and liability series 2021 to 2025 (note 11.1.2: 1.25, 1.55, 4.15, 5.10, 5.15 per cent; £48.2, £53.5, £31.5, £29.1, £30.2 billion); "may be significantly affected by even small changes in assumptions" (11.1.7). Re-read against the primary in session.
• Scottish Public Pensions Agency, NHS Pension Scheme (Scotland) Annual Report and Accounts 2024/25, published February 2026: liability £53.7 billion at 31 March 2025 (1.9); cash returned to the Scottish Consolidated Fund £538.4 million (Table 1; "This amount is returned to the Scottish Consolidated Fund as the scheme does not require cash funding at this point"). Re-read against the primary in session. Arithmetic: £538.4 million less £195.9 million is £342.5 million; £30.2 billion plus £53.7 billion is £83.9 billion, "about £84 billion".
• HM Treasury, Statement of Funding Policy, eleventh edition, June 2025, Annex C, "Scottish Government AME programmes funded by the UK Government": "NHS pensions", "Teachers' pensions"; chapter 7 paragraphs 7.1 and 7.3. Re-read against the primary in session.
• Scottish Government, Pensions in an Independent Scotland, September 2013, chapter 6 key points, quoted verbatim ("On independence, the financial management of the Scottish NHS and Teachers' schemes would transition from HM Treasury to the Scottish Government"); Table 6.1 (NHS and Teachers "Unfunded scheme supported by AME"; Police and Firefighters "supported by Scottish DEL").
• Scottish Government, Building a New Scotland: Social security in an independent Scotland, 6 December 2023, page 1 ("Note that proposals on pensions will be made available in a later paper in the 'Building a New Scotland' series"); the series' thirteen papers and dates, ending 25 April 2024, from each publication page.
• HMRC, HMRC impact assessment for the movement of goods if the UK leaves the EU without a deal, third edition, 7 October 2019, section C: £15 to £56 per declaration; 215 million additional declarations; £7.5 billion; the segmentation table (low volume small traders, outsourced: £56 import, £46 export; "£40 average charge from survey of freight forwarders. Plus assumed 1 hour per declaration for business to prepare information @ £15.60 per hour"; £30 for export); £24 million plus £10 million of support. "Updated to reflect 2017 data" throughout.
• OBR, How are our Brexit trade forecast assumptions performing?, 11 March 2024, quoted verbatim (15 per cent, 4 per cent, fifteen years; UK goods trade "around 10 per cent below 2019 levels, while it was around 5 higher on average for the rest of the G7").
• Scottish Government, Export Statistics Scotland 2023, 25 November 2025: £55.4 billion to the rest of the UK, £93.1 billion total. Arithmetic: 59.5 per cent, printed as 60 as in chapter 28. "No statistics on the total value of imports to Scotland on a comparable basis": chapters 19 and 28 Sources.
• The Windsor Framework and the open land border: chapter 19 Sources. The Trader Support Service as a free declaration service for Great Britain to Northern Ireland movements: stated as fact of its existence only; no contract figure is used (see Verification notes).
• Frantisek Brocek, Monetary and fiscal policy in a newly independent Scotland: lessons from the dissolution of Czechoslovakia?, Fraser of Allander Institute Economic Commentary 42(3), September 2018, pp. 42 to 51: the 38 days; Czech GDP minus 1 per cent and Slovak minus 4 (citing Fidrmuc, Horvath and Fidrmuc 1999); "the overall costs associated with the dissolution were 2.1% of Czech and 5.7% of Slovak GDP" (citing Sujan and Sujanova 1994); Slovak unemployment 14.4 per cent in December 1993.
• Národná banka Slovenska, Slovak koruna currency, history page: exchange 4 to 7 February 1993, 4,000 koruna per person, stamps at 40 locations, first Slovak banknote 15 August 1993, stamped federal notes invalid from 10 January 1994.
• Slovakia 49.5 to 74.9 and Estonia 36.1 to 80.1 per cent of the EU average, GDP per head in purchasing power standards, 1995 and 2025: chapter 28's Eurostat table and Sources.
• Eesti Pank, History of Eesti Pank and History of Estonian money (kroon sole legal tender from 20 June 1992; EEK 8 to DEM 1; reserves "only around 2.5 billion kroons"; "Sweden returns the gold to Estonia on 1 July 1992"; no Accounting Act or Commercial Code "until 1995", Credit Institutions Act January 1995), and Annual Report 1993 (inflation 1053 per cent in 1992, 35.6 per cent in 1993; GDP "decreased approximately 15%" in 1992, real growth 3 per cent in 1993). The museum page's 1077 per cent for 1992 differs from the Annual Report's 1053; the Annual Report figure is used.
• John FitzGerald and Seán Kenny, 'Till Debt Do Us Part': Financial Implications of the Divorce of the Irish Free State from the UK, 1922-6, Trinity Economics Papers TEP 2117, November 2017: British claim "between 80 and 100 per cent of GNP"; "debt to GNP of 90 to 110 per cent instead of the ratio of 10 to 15 per cent which was the actual outcome"; waived "in a Financial Agreement in 1925 at the expense of an unchanged border with Northern Ireland"; "The Irish delegation was forced to react in an impromptu fashion during the discussions with the UK government"; "By December 1926 the First National Loan was trading at par". Read directly from the PDF in session for the "impromptu" wording.
• Scottish Fiscal Commission, Scotland's Economic and Fiscal Forecasts, January 2026, Foreword, quoted verbatim ("Our statutory duty is to provide independent and official forecasts of Scottish GDP, devolved tax revenues, and devolved social security spending to inform the Scottish Budget").
• HM Treasury news story, 26 May 2014, "the UK government has not published its own estimate": chapter 28 Sources.
• Growth Commission, Part C, paragraph C2.6, test 4 ("Sufficiency of foreign exchange and financial reserves: Does Scotland have sufficient reserves to allow currency management?"), and C2.8 (the tests "unlikely to be met until towards the end of the first decade").
• Scottish Government, The macroeconomic framework of an independent Scotland and the measurement of economic flows, technical paper, 8 October 2025, 16 pages, read in full: no reserve estimate.
• Common Weal, Peter Ryan, Backing Scotland's Currency: Foreign exchange reserves for an Independent Scotland, June 2017: 20 per cent of GDP, "approximately $40 billion"; the four sources ($16.2 billion from a division of UK reserves, $2.9 billion from converted cash, $13 billion from a Bank of England swap, $8.8 billion from a euro bond). Campaign-aligned, 2017, dollars; used only as the sole published estimate.
• Publication review additions, 9 October 2026 (the advocate merge; each tag is the edit it sources): - (27-A02#1) Michael Amior, Rowena Crawford and Gemma Tetlow, Fiscal Sustainability of an Independent Scotland, IFS Report R88, Institute for Fiscal Studies, November 2013, ISBN 978-1-909463-28-8. Executive summary p.3: 'Our basic model for Scotland (which assumes that Scotland takes on a population share of accumulated UK debt at the point of independence) suggests that... We estimate that Scotland would require a permanent tax increase or spending cut (or a combination of the two) equal to 4.1% of Scottish national income'. Basic-model assumptions table, p.12: 'Public sector net debt: allocation to Scotland Population share'. Section 3.4 'Debt allocation and interest rates', p.33: 'Our basic projection assumes that, on independence, Scotland would take its population share of accumulated UK net debt, resulting in projected debt of 71.8% of national income in 2015–16.' Table 4.1 'Estimates of the fiscal gap', p.39, target debt 40% by 2062–63: 'Basic model 4.1'; '40% debt, 5% interest rate 3.2'. https://ifs.org.uk/sites/default/files/output_url_files/r88.pdf archive: https://web.archive.org/web/20240531211412/https://ifs.org.uk/sites/default/files/output_url_files/r88.pdf (existing capture, recorded in line 2117)..

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