The UK Government is undertaking a major cross-government programme of analysis prior to the referendum on Scottish independence in 2014. The aim is to provide a comprehensive and detailed analysis of Scotland's place in the UK. This paper, the first of a series to be published in 2013 and 2014, examines the UK's constitutional set-up and the legal implications of independence. The UK Government is convinced that the current devolution offers the best for Scotland: the Scottish Parliament and Government are empowered to take decisions on a range of domestic policy areas - such as health, education, policing - while Scotland continues to benefit from decisions made for the UK as a whole - defence and security, foreign representation, economic affairs. Independence is very different to devolution. Based on independent expert opinion (published as Annex A), the paper concludes that if there were to be a vote in favour of leaving the UK, Scotland would become an entirely new state whilst the remainder of the UK would continue as before, retaining the rights and obligations of the UK as it currently stands. Any separation would have to be negotiated between both governments. Legal and practical implications of independence, both at home and abroad, are addressed. An independent Scotland would have to apply to and/or negotiate to become a member of whichever international organisations it wished to join, including the EU and NATO. Scotland would also have to work through its positions on thousands of international treaties to which the UK is currently party.

The second Scotland analysis paper, Currency and monetary policy, explained that the currency and macroeconomic framework that operates across the UK would not be able to continue between two separate states. In the event of a vote for independence, there would be further consequences for the financial sector and for its customers which are analysed in the current paper. The most profound implication is that independence would create two separate financial jurisdictions: the continuing UK and a new, independent Scotland, which would require its own legal and regulatory framework. The competitiveness of Scotland's financial sector is aided by its location within the UK. Industry and international bodies view the UK as a strong tax and regulatory regime, building customers' and partner organisations' trust in UK financial firms. Being part of the UK helps support the Scottish financial services sector, which generates employment not just in financial services firms, but in the professional and other services that support the sector. Location in a larger economy also helps to reduce firms' cost of borrowing because markets perceive these firms as less of a risk. If Scotland became independent, this position would be called into question: The Scottish banking sector would be exceptionally large compared to the size of an independent Scotland's economy, making it more vulnerable to financial shocks than it is as part of the larger UK. There could be questions about an independent Scotland's ability to stabilise its banking system in the event of a future financial crisis

This paper is the latest in the Scotland analysis series and explores how an integrated domestic environment for research in publicly funded institutions supports the UK's, including Scotland's, excellent and thriving research base which is vital for innovation and economic success. An independent Scottish state would become responsible for deciding how much to spend on research activity and how to distribute research funding. In order to replace the 2012-13 level of Research Council expenditure in Scotland (£307 million), the government of an independent Scottish state would have to spend 0.23 per cent of 2012 GDP on research or seek additional funding from elsewhere such as overseas, businesses or charities. Businesses and research charities could, however, face additional administrative burdens created by divergences in regulatory regimes and tax jurisdictions, meaning funding projects in both the continuing UK and an independent Scottish state could become more complex. UK national institutions would operate on behalf of the continuing UK as before but would have no power or obligation to act in, or on behalf of, an independent Scottish state. In the event of independence the single strategic and highly integrated research framework would be likely to diverge as an independent Scottish state set and deliver its own research priorities. Research collaborations between the continuing UK and an independent Scottish state would be international collaborations associated with levels of risk not present in domestic collaborations. Research excellence is also supported by the ability of researchers and staff to move freely across the UK and elsewhere, thereby supporting the flow of knowledge

This assessment finds that the UK is a successful union because taxation, spending, monetary policy and financial stability policy are co-ordinated across the whole UK. It means risks are pooled, there is a common insurance against uncertainty and no one area or sector of the larger economy is too exposed. Within a sterling currency union, an independent Scottish state would find it more difficult to adjust to the effects of economic challenges. The continuing UK would become unilaterally exposed to much greater fiscal and financial risk from a separate state. Greater fiscal risk would come from UK taxpayers being asked to support the wider economy of another state and also financial risk were banks from that state to fail. The experience of the euro area in the financial crisis highlighted the challenges of creating a durable and effective currency union, illustrated by the very difficult economic adjustments required by some members and the financial risks that have been accepted by other members and their taxpayers. On the basis of the scale of the challenges, and the Scottish Government's proposals for addressing them, HM Treasury would advise the UK Government against entering into a currency union. There is no evidence that adequate proposals or policy changes to enable the formation of a durable currency union could be devised, agreed and implemented by both governments.

In September 2014 people in Scotland will take one of the most important decisions in the history of Scotland and the whole of the United Kingdom (UK) - whether to stay in the UK, or leave it and become a new, separate and independent state. In advance of the referendum, the UK Government will ensure through the Scotland analysis programme that the debate is properly informed by analysis, and that the facts crucial to considering Scotland's future are set out. This paper sets out the role of economic and fiscal integration in shaping Scotland's economic performance as part of the UK and describes some of the potential economic and fiscal consequences of independence. It follows the fourth paper in the Scotland analysis series, Scotland analysis: Business and microeconomic framework, which sets out how the UK's domestic market is a key part of Scotland's successful business environment

This paper analyses the UK's approach to identifying and managing threats to the national security of the UK, and the implications for these arrangements of a vote for independence. It complements analysis of the UK's approach to defence explored elsewhere in the Scotland analysis series. It is clearly in the UK's interests to be surrounded by secure and resilient neighbouring countries, including - in the event of a yes vote - an independent Scottish state. While the UK endeavours to work with other countries and international organisations to improve security and fight organised crime for everyone's mutual benefit there is something qualitatively different about being influential and intimately connected with the rest of the UK by being a part of it. Issues of national security are of the utmost sensitivity, linked to a country's foreign, security and defence policy posture, and any decisions are closely related to matters of sovereignty and democratic accountability. For this reason, a security union is closely connected to the existence of a political union. The creation of an independent Scottish state would see an end to the current arrangements for ensuring Scotland's security, as Scotland, including Police Scotland, would no longer be part of the UK's national security infrastructure and capabilities. In practical terms this means that the present level of strategic and operational communication and co-ordination that occurs everyday across the UK, with Scotland playing a key role within it - whether concerned with counter-terrorism, fighting serious and organised crime or protecting against cyber threats - would end

On 18 September 2014, Scotland held a referendum on the question: Should Scotland be an independent country? This is a most unusual event in modern democracies and engaged the political class, civil society, and the general public to an unprecedented degree, leading to an 85 per cent turnout in the final vote. This was an occasion to debate not just the narrow constitutional issue but the future of the nation, including the economy, social welfare, defence and security, and Scotland's place in Europe and the world. Debating Scotland comes from a team of researchers who observed the debates from close-up and engaged with both sides, with the media and with the public in analyzing the issues, while remaining neutral on the independence question. The book examines the main issues at stake, how they were presented, and how they evolved over the course of the campaign. The editors and contributing authors explore the ways both independence and union were framed, the economic issues, the currency, welfare, defence and security, the European Union, and how the example of small independent states was used. The volume concludes with an analysis of voter responses, based upon original survey research, which demonstrates how perceptions of risk and uncertainty on the main issues played a key role in the outcome.

This book examines the impact of devolution on Scottish and UK higher education systems, including institutional governance, approaches to tuition fees and student support, cross-border student flows, widening access, internationalisation and research pol

Former Prime Minister Gordon Brown looks at what lies in store for Scotland ahead of their 2014 independence referendum.

Scotland's Choices, now fully revised for the critical last few months before the referendum, explains the choice that Scotland will have to make in September 2014. The authors clearly explain the issues and how each of the options would be put into place