Scotland's Future

Chapter 1 The Case for Independence

Since the Scottish Parliament was re-established in 1999, responsibility for governing Scotland has been split.

The Scottish Parliament and Scottish Government in Edinburgh are responsible for a range of "devolved" matters, including the National Health Service, education, justice, social services, housing, the environment, farming, fisheries and aspects of transport.

The Westminster Government - currently a coalition of the Conservative and Liberal Democrat parties - and the Westminster Parliament have "reserved" responsibilities including defence, foreign affairs, macroeconomic policy, the welfare system, financial and business regulation and most aspects of taxation (see Annex B).

Taxes raised in Scotland pay for both governments, but our taxes generally go directly to Westminster^[1]. Devolved services are largely funded by a "block grant" determined by Westminster^[2].

Under independence, the Scottish Parliament and Scottish Government would take over all Westminster's remaining powers and responsibilities for Scotland. Decisions on economic policy, international relations, defence spending and priorities, social security benefits, taxation and other public spending would be made in Scotland by governments accountable to the Scottish people and not by Westminster governments we often do not support.

This chapter gives an overview of:

• why Scotland needs independence
• what Scotland will look like on independence
• what will happen between a Yes vote and Scotland becoming independent
• our financial and economic strengths
• the benefits of independence and the priorities for action of the current Scottish Government if it becomes the first government of an independent Scotland
• the consequences of Scotland voting No to independence

Later chapters of this guide look at these issues in greater detail.

Why Scotland needs independence

The central purpose of independence is to make life better for people living in Scotland. Only a Scottish Parliament and Government will always be able to put the interests of the people of Scotland first. We only have to look at the track record of devolution since 1999 to know this is the case; these powers have been good for Scotland, but in those areas still controlled by Westminster there have been many costs for families and communities in Scotland.

Democracy, prosperity and fairness are the principles at the heart of the case for independence. Independence means that the people of Scotland will take responsibility for our future into our own hands. It will also give us the economic and social powers that any country needs to build a more prosperous and fairer society. As this guide will demonstrate, Scotland can afford to be independent.

Crucially, these principles work in harmony. If we transfer decision-making powers from Westminster to Scotland we are more likely to see policies that are in tune with the values of the people of Scotland, that close the gap between rich and poor, and provide greater opportunities for everyone in Scotland regardless of their background. We can build a fairer society. And in doing so we can create a more prosperous country because we know that successful countries are more equal and cohesive. They make full use of everyone's talents and have a sense of shared national purpose.

There are three over-riding reasons for Scotland to become an independent country. These are:

1. To create a more democratic Scotland

The Scottish Government believes that the people of Scotland are the ones who will do the best job of running our country. We will not get every decision right, but more often than not the choices we make for our economy and our society will be better for Scotland than those made at Westminster.

A Scottish Parliament with limited devolved powers has already shown what is possible. The Scottish Parliament has delivered free personal care for the elderly, kept our NHS in the public sector and restored free education for our students. With powers over our tax system, social security, immigration and defence, the Scottish Parliament will also be able to make better choices for Scotland on these issues.

With independence, Scotland will always get the governments we vote for. For 34 of the 68 years since 1945, Scotland has been ruled by Westminster governments with no majority in Scotland. Policies are imposed on Scotland even when they have been opposed by our elected Westminster MPs. Under the current Westminster Government this democratic deficit has resulted in:

• the privatisation of the Royal Mail
• unfair welfare changes such as the "bedroom tax"
• cuts in capital spending, harming economic recovery
• a commitment to spend as much as £100 billion on the lifetime costs of a replacement nuclear weapon system

Being able to decide our own government really matters. The costs of decisions being made at Westminster are being paid by families and communities across Scotland. Many of the consequences will be long-lasting: as a direct result of the Westminster Government's welfare changes, the child poverty rate in Scotland is predicted to rise to 22.7 per cent, equivalent to an additional 50,000 children by 2020^[3]. None of this needs to happen. These consequences are a direct result of Scotland getting governments we did not vote for.

With independence, Scotland will have the tools we need to turn our rich country into a rich society. This will require hard work and effort, but the prize is worth it: we can create a more prosperous, sustainable and successful future for our families, our nation and for ourselves.

2. To build a more prosperous country

Both before and after devolution, the key economic powers necessary to deliver growth and prosperity remained with Westminster. Control of taxation, public spending limits, regulation of business and industry, and competition policy all rest in London. Successive devolved Scottish governments have had considerable success in reducing unemployment, increasing employment and promoting inward investment. But the fundamental economic decisions that affect Scotland are taken in Westminster, often by governments that have no popular mandate in Scotland, and in the interests of an economy and society with different priorities from Scotland.

Scotland is blessed with a range of economic strengths and advantages: substantial natural resources, a strong international brand, world-class universities and research, and a range of world-leading industries including food and drink, life sciences, the creative industries, energy, tourism, insurance, wealth management and engineering.

Because of those strengths and advantages, our national output per head of population puts us near the top of the OECD^[4] - the association of the wealthiest countries in the world^[5].

Even without North Sea oil, Scotland's economy produces almost exactly the same amount of output per head as the rest of the UK. With oil and gas, we produce nearly a fifth more.

However, despite all of Scotland's strengths, over the past 30 years our economic growth rate has been lower than the UK average and lower than that of comparable nations across Europe (see Chapter 3). That reflects a number of factors, including lower population growth.

Our economic output is the product of our collective hard work and ingenuity as a nation, and reflects the many advantages we enjoy. Yet life expectancy is lower in Scotland than in similar countries^[6], and poverty levels are too high^[7].

Nations that are similar to Scotland - such as Norway, Finland, Denmark and Sweden - sit at the top of world wealth and well-being league tables^[8]. Unlike Scotland, they are independent and are able to take decisions in the best interests of their own economies. They do not leave the important decisions about their economy to parliaments whose interests necessarily lie elsewhere. That is their independence advantage and they have used it to build societies that deliver a higher quality of life for their citizens.

If Scotland moved from the rates of growth it has experienced in the past to instead match the levels of growth of other small European countries, the benefits for people in Scotland in terms of prosperity and employment would be significant. As an illustration, had Scotland's growth matched these other independent nations between 1977 and 2007, GDP per head would now be 3.8 per cent higher, equivalent to an additional £900 per head (see Chapter 3). We would also enjoy the higher revenues that accompany greater prosperity.

Independence would make the Scottish Parliament and Government responsible for the full range of economic powers. Decisions on taxation and other economic levers, as well as employment law and all aspects of economic regulation, would be taken in Scotland and tailored to Scotland's needs. In some cases - such as our proposal to continue to share the pound as our currency - the choices would involve partnership and co-operation with other countries. However, the decisions on when to co-operate would be entirely ours to make.

The ability to make our own decisions is the point of independence. It will provide the best conditions for sustainable economic growth, and enable us to protect living standards, reduce poverty and inequality, and build a better society.

3. To become a fairer society

Within the UK, Scotland is part of an increasingly unequal society. The UK ranks 28th out of 34 nations in the OECD on a measure of overall inequality^[9]. OECD analysis shows that since 1975, income inequality among working-age people has increased faster in the UK than in any other country in the organisation^[10]. This is not the result of the policies of one government, but of almost 40 years of decisions at Westminster.

Seeking to become a more equal society is not just the right thing to do. It also makes sense for the economy.

We know that the most equal societies also have the highest levels of well-being and are most prosperous. They are also, more often than not, nations like Scotland; the fairest and most successful countries in the world are independent European nations of similar size^[11].

We want the powers of independence so that we can build a different and better Scotland, where the many benefits of a rich and active society are cherished and where we work together to advance our nation as a whole. Progress under devolution has shown us what is possible, but it is not enough.

For these important reasons of democracy, prosperity and fairness, it is time for the people of Scotland to take responsibility for our own future as we look towards the third decade of this 21st century. Rather than remaining a peripheral concern for Westminster governments that we did not elect and do not necessarily support, we can forge our own path. With independence we can create a social nation: a country that acts and feels like a community, a vibrant society where we know the benefits of looking out for each other. Independence is about empowering the people and communities of Scotland as much as it is about empowering our Parliament and government. It will give us the ability, collectively, to choose the path ahead that is right for us and for those we work with and live beside.

Driving our ambition is the firm knowledge that Scotland, and all of the people who live here, should be enjoying the benefits of higher levels of sustainable economic growth. There is so much more we can achieve with all the advantages that we enjoy.

What a newly independent Scotland will look like

Immediately following a vote for independence next year, Scotland will look familiar, but will already have changed, and for the better. The Yes vote will be a resounding statement of national self-confidence.

There will be a transition period between a Yes vote in September 2014 and Scotland becoming independent. Negotiations will take place in this period with the Westminster Government and international partners, particularly the European Union (EU). Setting a date of March 2016 for those to be completed will allow a realistic time period for all of the preparations needed for the Scottish Parliament to take on the necessary powers of independence (see Chapter 10).

On independence, Her Majesty The Queen will remain our head of state, just as she is for 16 Commonwealth countries. Scotland will be a constitutional monarchy for as long as the people of Scotland wish us to be so. Scotland will take our place amongst the member states of the EU and the United Nations.

Scotland's existing institutions and structures of government will continue, but independence will extend their powers and responsibilities. The Scottish Parliament will become the Parliament of an independent Scotland. It will continue to have 129 members, representing constituencies and regions across Scotland, and will be located in the existing Parliament building at Holyrood. The Scottish Parliament will take over responsibilities currently exercised at Westminster.

We will replace a costly, remote and unrepresentative Westminster system with a Parliament elected entirely by the people of Scotland, saving the Scottish taxpayers around £50 million a year in their contributions to the costs of the House of Commons and the House of Lords.

However, the biggest difference will come from the opportunity to take action to meet Scotland's needs, across all areas of the nation's life, to make the most of Scotland's strengths and build on key principles supported by the people of Scotland.

The first election to the new independent Scottish Parliament will take place on 5 May 2016. People will vote in the usual way using the existing proportional system. The newly elected independent Parliament will have responsibility for establishing a constitutional convention which will take forward the drafting of a written constitution for Scotland, based on extensive engagement with the people of Scotland, as well as civic groups and organisations.

Independence will see the Scottish Government develop new functions as it takes on the responsibilities of serving an independent country. If the present Scottish Government is re-elected, we will spread government jobs and decision-making across the country, delivering the direct economic benefits of independent government to more parts of Scotland.

During the transition period, many more countries will set up embassies and consulates in Scotland. We can expect an increase in transport connections to and from Scotland, and the new independent Scottish Government will start to be created - bringing jobs which are currently based in London to Scotland.

For public services that are currently reserved, there will be arrangements for the continued delivery of services to the public across the UK where this is in the interests of service users and the two governments. In most cases, this will be for a transitional period, but in some it may be for the longer term. The underlying principle in all cases will be the seamless delivery of services to people in Scotland (and the rest of the UK), with decisions for Scotland being made in Scotland by the Scottish Government and Scottish Parliament.

Scotland already has an independent legal system. The Inner House of the Court of Session and the High Court of Justiciary sitting as the Court of Criminal Appeal will collectively be Scotland's Supreme Court.

References on points of EU law will continue to be made to the European Court of Justice in Luxembourg, and applications on human rights issues to the European Court of Human Rights in Strasbourg will continue. The structure of Sheriff Courts and other courts will remain the same. The Crown Office will continue to be the sole independent public prosecuting authority and will continue to investigate all suspicious and unexplained deaths. The structure of police and other emergency services will be also be unaffected by the move to independence.

On independence, the structure of local government in Scotland will remain the same, with local councils continuing to deliver the full range of services they do today. This will include schools, leisure and social services. The next election to Scotland's local authorities will take place as planned in 2017. Independence will give us the power to embed the role of local authorities in a written constitution and consider the most appropriate responsibilities for local government and communities. The NHS, which is already the responsibility of the Scottish Parliament, will operate on exactly the same basis the day after independence as it does the day before.

The most important point, however, in considering what an independent Scotland will look like is this: it will look like the kind of Scotland we as a people choose to build. We will take the decisions. What happens to our country will be our responsibility.

The Government of an independent Scotland

The structure and location of government in an independent Scotland will be for the elected government of the day to decide. This box sets out the approach proposed by the current Government, which is to structure the Scottish Government into nine portfolios, each of which will comprise at least one Cabinet Secretary and supporting Ministers. This structure is designed to continue the current Scottish Government's approach of more flexible and more efficient government, allowing us to take full advantage of some of the key benefits of independence: agility, accessibility and short lines of decision-making. The nine portfolios we are planning are:

• Office of the First Minister
• Finance and Economy
• Health, Wellbeing and Social Protection
• Education, Skills and Employment
• International Relations and Defence
• Justice, Security and Home Affairs
• Environment, Rural Scotland, Energy and Resources
• Culture, Communications and Digital
• Law Officers

Office of the First Minister

The First Minister will have overall responsibility for the Scottish Government, transition agreements and the constitution, and will be supported by a Minister for Parliamentary Business who will attend Cabinet.

Finance and Economy

The Cabinet Secretary for Finance will have responsibility for Scotland's budget and public service reform, and will be supported by a Minister for Communities and Public Services who will have responsibilities including local government, equalities and community empowerment. A Cabinet Secretary for Trade and Economic Development will have responsibility for competitiveness, business and tourism, and will be supported by a Minister for Transport. Revenue Scotland will have major operational centres based in East Kilbride and offices around Scotland.

Health, Wellbeing and Social Protection

The Cabinet Secretary for Health will have responsibility for the NHS and will be supported by a Minister for Public Health and Sport and a Minister for Children and Families. There will be a Cabinet Secretary for Social Protection who will be supported by a Minister for Pensions and Older People. NHS services will be based in existing facilities. A Working Age and Disability Benefits HQ will be based in Glasgow. There will be national pensions centres at existing sites in Dundee and Motherwell and a national child maintenance centre in Falkirk, plus a network of centres around the country.

Education, Skills and Employment

The Cabinet Secretary for Education will have responsibility for primary, secondary, further and higher education, as well as Gaelic and Scots, and will be supported by a Minister for Schools and a Minister for Youth Employment.

International Relations and Defence

The Cabinet Secretary for International Relations will have responsibility for relations with the rest of the UK and Ireland, the EU, and the wider international community, and will be supported by a Minister for International Development. The Cabinet Secretary for Defence will have responsibility for defence policy and will be supported by a Minister for the Armed Forces and Veterans. Scotland's Military HQ will be at Faslane and there will be delivery functions in East Kilbride, at Kentigern House in Glasgow, and in international embassies and missions.

Justice, Security and Home Affairs

The Cabinet Secretary for Justice will have responsibility for police, security and intelligence, and the justice system, and will be supported by a Minister for Home Affairs with responsibilities including immigration and borders.

Environment, Rural Scotland, Energy and Resources

The Cabinet Secretary for Natural Resources will have responsibility for energy, sustainability and the environment. The Cabinet Secretary for Food and Rural Affairs will have responsibility for food and drink, agriculture, fishing and rural communities.

Culture, Communications and Digital

The Cabinet Secretary for Culture will be responsible for culture, broadcasting, postal services and digital delivery, and will be supported by a Minister for Communications.

Law Officers

The Lord Advocate and Solicitor General will continue as head of the systems of criminal prosecution and investigation of deaths in Scotland and will provide legal advisory functions across the whole range of government activity, including currently reserved functions.

In addition to these government departments, significant functions currently delivered for Scotland from elsewhere in the UK will be transferred to Scotland. This means that jobs which Scottish taxpayers currently fund in London and elsewhere will instead come to Scotland, providing a boost for our economy, and creating new jobs and career opportunities. This Government proposes to locate these functions around Scotland.

In an independent Scotland, we will establish a new security and intelligence body, a Scottish Border and Migration Service and a Scottish Motor Services Agency. At present spending on these functions in other parts of the UK is funded, in part, by taxes and fees collected from people and businesses in Scotland. With independence these taxes and fees would be spent in Scotland.

Becoming independent - the transition

Timetable for negotiations

Following a vote for independence in the referendum on 18 September 2014, there will be a period of preparation for Scotland to become an independent country. Setting a realistic independence date of 24 March 2016 will allow time for the preparations necessary for the Scottish Parliament to take on the new powers of independence to be completed.

This period between the referendum and independence will see negotiations with the rest of the UK, represented by the Westminster Government, and with the EU and other international partners and organisations. Following these preparations and negotiations, Scotland will assume our status as an independent country before the Scottish parliamentary elections in May 2016.

In the Edinburgh Agreement signed by the First Minister and the Prime Minister on 15 October 2012, the Scottish and Westminster Governments committed to work together constructively in light of the outcome of the referendum in the best interests of the people of Scotland and the rest of the UK^[12]. Following a vote for independence in 2014, agreements will be needed between the Scottish and Westminster Governments, in the spirit of the Edinburgh Agreement, setting the parameters for Scotland's transition to independence. These will set out:

• the precise timetable towards independence day in 2016
• the constitutional platform for an independent Scotland - the laws and administrative arrangements to establish Scotland as an independent state
• the process and timetable for the negotiations, and conclusion of the agreements which will form the final independence settlement

It will be in the interests of both countries for the governments to make rapid and constructive progress on these negotiations, in line with the commitments made in the Edinburgh Agreement. It would assist in preparing for the negotiations if discussions between the governments were to take place prior to the referendum, and the Scottish Government will continue to press for such engagement.

A Yes vote will require work to be undertaken within the Scottish Government, drawing on external advice and expertise from within civic society and our academic and business communities.

The negotiating team will be led by the First Minister, and the process will include figures from across Scottish public life and Scotland's other political parties. During the transition period the Government will seek the agreement of the Scottish Parliament to extend its sitting days to ensure full democratic scrutiny of the process and to provide adequate time for the necessary legislation to be passed.

Constitutional platform for independence

Scotland's current governmental arrangements are based on the Scotland Act 1998, which is an Act of the Westminster Parliament. With independence, Scotland's government will not be based on the authority of Westminster but on the sovereignty of the people of Scotland.

To prepare for this new status a number of steps will need to be taken to provide a constitutional platform for Scotland to make a seamless transition to independence and to provide a secure underpinning to the legal and governmental system.

Soon after a Yes vote in the referendum, the Westminster and Scottish Parliaments will need to pass legislation to give the Scottish Parliament powers to: declare independent statehood for Scotland in the name of the sovereign people of Scotland; amend the Scotland Act 1998; and extend the powers of the Scottish Parliament and Scottish Government into all policy areas currently reserved to Westminster, in order to make preparations for independence.

With the transfer of the appropriate legislative competences, the Scottish Parliament will be in a position to make the necessary preparations for Scotland to become independent.

Agreement with the rest of the UK

The independence agreement with the rest of the UK will cover a range of matters, mainly the approach to the assets and liabilities of the UK, the delivery of services and the position of individuals working within public services. There will also need to be agreements on cross-border operational matters, as is the case now, and on transitional arrangements for those areas where a period of adjustment will be the most sensible approach.

The over-riding priority will be the seamless delivery of public services on independence to citizens of both countries. This applies both to those services currently delivered to Scotland from locations elsewhere in the UK, and to those services currently delivered from Scotland to citizens elsewhere in the UK.

Agreement with international organisations and partners

In addition to discussions with the Westminster Government, negotiations will be held in advance of independence with the EU to agree the terms of an independent Scotland's continuing membership. Scotland will continue to be part of the UK - and, therefore, an integral part of the EU - during these negotiations. The UK and Scottish Governments, along with the EU institutions and member states, will have a shared interest in working together to conclude these negotiations to transfer Scotland's EU membership from membership as part of the UK to membership as an independent member state.

Discussions and negotiations will also be required about the terms of Scotland's (and indeed the rest of the UK's) membership of other international bodies to which Scotland currently belongs as a component nation of the UK. Such negotiations will necessarily involve both the Scottish and Westminster Governments, together with our international partners (see Chapter 6). Such arrangements will cover Scotland's membership of international organisations such as the UN and NATO. On independence, Scotland will also become a Non-Nuclear Weapons State party to the Nuclear Non-Proliferation Treaty and a party to other major international treaties.

Scotland will succeed to international treaties by sending notifications of succession to the depositaries of multilateral treaties (for example, the Secretary-General of the UN is the depositary for the 500 UN Treaties), and by writing to the other states in relation to each of the UK's existing bilateral treaties to which Scotland would wish to succeed. This is in line with normal international practice.

Strong foundations - Scotland's financial and economic strengths

There are now few people who still argue that Scotland does not have the strength or capacity to be independent. The UK Prime Minister, David Cameron, has recognised that this is the case^[13].

Most countries in the world generate less wealth per head than Scotland - including the UK as a whole. If Scotland cannot afford to be independent, neither can the UK.

We pay our own way

Over each of the last 32 years, estimates show that Scotland has contributed more tax per head of population than the rest of the UK. In 2011/12 we generated £10,700 of tax revenues per head, compared to £9,000 for the UK^[14].

We spend a lower proportion of both our national output and our tax revenues on social protection - things like pensions and welfare - than the UK, which means that Scotland is wealthy enough to look after our most vulnerable people.

Taken as a whole, Scotland's national accounts are healthier than the UK's. Over the last five years they have been stronger to the tune of £12.6 billion - almost £2,400 for every person living in Scotland. That is money that could have been used to deliver more for public services such as our schools and hospitals, to reduce taxes or to cut the amount we need to borrow. More importantly, it shows that Scotland has firm financial foundations. We have the economic and financial strength we need to choose independence.

By independence in 2016/17, Scotland's fiscal deficit is forecast to have fallen to between 2.5 per cent and 3.2 per cent of GDP, assuming that we take on a population share of UK public sector debt; with a historic share of UK debt, our deficit is forecast to be lower still, at between 1.6 per cent and 2.4 per cent of GDP. By contrast, the UK is forecast to run a deficit of 3.4 per cent of GDP in the same year^[15]. The International Monetary Fund estimates that the average deficit across the G7 economies will be 3.2 per cent in 2016^[16].

On independence, Scotland will accept a fair share of the existing UK debt. The amount of the debt that we accept will be subject to negotiations. We will also be entitled to a fair share of UK assets (assets that our taxes have helped to pay for). The debt could be apportioned by reference to the historic contribution made to the UK's public finances by Scotland. An alternative approach would be to use a population share. In either case, Scotland's debt is projected to be lower as a proportion of GDP than that of the UK as a whole.

The question, therefore, is not ''Can we afford to be independent?'' Instead, given all these strengths, we should be asking ''How do we make people in Scotland better off?'' With independence, we will be better able to get our resources working for all the people of Scotland.

We will only be able to do that if we make the most of the talents and potential of everyone in the country. That means creating a fairer society so that everyone has the opportunity to get on in life, both for themselves and for the contribution they can make to their communities and to Scotland.

Greater security through independence

Some who support the current Westminster system argue that Scotland benefits from a pooling and sharing of resources across the UK. However, this is far from the reality. Our resources may be pooled, but they are not fairly shared.

The Westminster system has created a country with some of the biggest regional differences in GDP per head of any EU nation. Growth has been concentrated in London and the South East.

Within the UK, half of the population owns just 9.9 per cent of the wealth, while the very richest 10 per cent own 43.8 per cent^[17]. Income inequality is amongst the highest in the developed world^[18].

This situation has been getting progressively worse. Even though Scotland is economically strong, it will become harder to cope with an economic policy which funnels so much activity into one corner of the UK and to one section of society.

In addition, Westminster is making welfare changes that threaten the security of all of us, especially the most vulnerable.

This is in contrast to the Scottish Parliament's protection of the universal principle, which recognises that people pay into the system and should get some reward or help in time of need.

The idea of pooling and sharing wealth is the mark of a fair society. The evidence shows that it is small independent European nations that have the best record of generating more wealth for all and of sharing it more fairly across society^[19].

The evidence is clear that Scotland is ideally placed to deliver the economic and social gains that are normal in similar nations. The strength of our economy, our natural resources, and the degree of political consensus we enjoy gives us confidence that choices will be made to use the wealth of our nation to transform our economically productive country into a rich and fair society. But only independence can deliver this outcome and secure a Scottish Parliament with the necessary responsibilities, political balance and political will to achieve genuine social advances.

Across the world, nations face a range of challenges, from climate change and energy and water security to demographic changes that will alter the composition of society. With independence, we will have the powers to respond to these challenges and their impact in Scotland ourselves, rather than relying on the decisions of others. Independence will also give us the opportunity to play an active part in shaping global and European solutions to these problems. With independence, we will be better placed to meet the challenges of the future.

Over time, we will also have the opportunity to save a proportion of the revenues that flow from our offshore energy wealth for the benefit of future generations (see Chapter 8).

Energy and resources

Scotland has energy security. We produce six times our current demand for oil and three times our demand for gas. We have extraordinary potential in renewable energy, including a quarter of Europe's offshore wind and tidal potential.

Investment in the oil and gas sector is at the record level of £13.5 billion this year, and planned future investment is estimated at £100 billion. Industry projections also point to an increase in output in the first years of independence. Production is expected to extend beyond the middle of the century, with the industry estimating remaining reserves of up to 24 billion barrels of oil and gas that can still be recovered. In terms of wholesale value, North Sea reserves could be worth £1.5 trillion - a greater value than the amount extracted to date. As the vast bulk of the reserves are beneath Scottish waters, that gives us one of the best financial safety nets of any country in the world^[20].

While projections of the price for oil and gas vary, everyone now acknowledges that Scotland's oil and gas wealth is an extremely valuable resource and will last for a long time to come. Scotland can also look forward to a further energy bonus from our green energy resources, with expected sales of £14 billion by 2050 from offshore tidal and wind energy^[21].

Given the breadth and depth of our economic strengths, Scotland is better placed than most to ensure a secure future for the people who live here. By making the most of our strengths, we can provide the strongest guarantees in the years to come. In this way, we can prepare for future economic and financial pressures, enabling us to respond in a more effective way to economic downturns or unexpected challenges.

Population

Developed countries across the world face pressures on public services, as there are fewer people of working age and a larger proportion of children and people in retirement in the population. For at least the next 15 years, Scotland will be in a more advantageous position than the rest of the UK, and with independence^[22] we will be able to take the most important steps to address this challenge for the longer term. With the economic powers of independence, we can do more to generate higher levels of economic growth, which will in turn boost revenue levels. We will be able to create more opportunities for young people, allowing us to retain more of our working age population, and to attract back people who have chosen to work elsewhere. We will also be able to encourage suitably qualified new talent to settle and work in Scotland, and retain more of the students who come to study at our world-class universities. Right now, detrimental policies from Westminster are a major factor in preventing many Scottish-educated graduates from choosing to live and work in Scotland.

Scotland has the talent, resources, wealth and ingenuity to meet the challenges of the future. Greater certainty in the future comes not from leaving decisions to others, but from taking responsibility ourselves. Scotland has greater security when we have greater control over the direction we take as a nation. We can respond with action based on Scotland's particular circumstances, and take decisions that put us in a stronger position to meet the longer-term challenges that we can see emerging in the years ahead.

Government policies and public services with independence

On day one of independence, public services will continue to be delivered in a way that will be seamless for those who rely on them. Policy changes will be decided not in the 2014 referendum, but at future elections, both national and local. The benefit of independence is that all the important decisions affecting the quality of public services in Scotland will be taken in Scotland and not at Westminster. Westminster will no longer be able to reduce the funding available to the Scottish Parliament. Instead our Parliament will decide the right level of public spending for Scotland.

The success of those public services already under the control of the Scottish Parliament - free personal care for the elderly and world-leading improvements in hospital safety, to take just two examples - demonstrates the gains that come when decisions are made in Scotland.

As with devolution, the full gains from independence will come over time. The aim of the Scottish Government, through the process of becoming independent, is to protect the things we know are important to people living in Scotland, while also providing some immediate advantages from the move to independence and building for the long term.

With independence, decisions on the taxes we pay, the state pension, the delivery of all public services, and policies that affect our economy and society will be taken in Scotland based on the needs and interests of the people who live here.

Looking at neighbouring independent nations, such as Norway and Denmark, it is clear that they enjoy an independence bonus that allows them to deliver fairer societies. They are able to provide more targeted support for families with children and better levels of care for older citizens, and deliver measures to boost their economies, support higher standards of living and create more jobs.

These independence gains did not come overnight. They required effort and a focus on what was best for their societies, but they are a signal of what can be achieved when Scotland too becomes an independent nation.

Independence will give us the opportunity to better provide the public services we all value and rely on. It will put decisions on the level and allocation of Scotland's budget into the hands of the Scottish Government and Parliament, rather than leaving these decisions to Westminster. That means we can choose to guarantee free personal care and decent pensions for our older people and free tuition fees for students, instead of replacing Trident. Indeed, making different choices from Westminster on nuclear weapons and defence will allow this Scottish Government to save £500 million - money that can deliver direct benefits for people in Scotland.

The policies that will be pursued in an independent Scotland will be down to the government elected by the people of Scotland, starting with the first election following independence in May 2016.

This may be the SNP, Labour or any other party - or coalition of parties - that wins enough support.

The consequences of Scotland voting No in the referendum

The referendum is a choice between two futures: taking control in Scotland of our own affairs, or remaining under the control of Westminster. It is a choice about who can be trusted to make the best decisions for Scotland - our own Parliament elected in Scotland, or Westminster.

If the result of the referendum is No, decisions on welfare, defence and foreign policy will continue to be taken by Westminster for Scotland, whatever the views of the Scottish electorate. For example, with a No vote we will see a new generation of nuclear weapons on the Clyde. There is no assurance that decisions on the key issues that affect Scotland's prosperity, security and future will be made in line with the interests and values of the people who live here. Decisions with damaging effects on Scottish society - such as the "bedroom tax" which was introduced despite the opposition of 90 per cent of Scottish MPs - will continue to be made in Westminster.

The overall level of public spending in Scotland will continue to be driven by decisions on priorities for England through the Barnett formula - which determines Scotland's block grant by reference to spending by Westminster - rather than by Scottish priorities. There is the prospect that the funding system for devolved government in Scotland will be scrapped, with the risk of further significant cuts to the Scottish Parliament's budget and serious consequences for Scottish public services. Westminster politicians from all parties have indicated that reviewing the basis of Scotland's spending is a real possibility.

If we remain in the UK, the Conservative Party's promise of an in/out referendum on EU membership raises the serious possibility that Scotland will be forced to leave the EU against the wishes of the people of Scotland.

Despite much talk of further devolution and more powers for Scotland, with a No vote there is no assurance that there will be any new powers for the Scottish Parliament within the UK. Neither the Westminster Government nor the campaign opposing independence has made concrete proposals for further devolution to the Scottish Parliament following a No vote in the referendum. A vote against independence would not in itself lead to an extension of the powers of the Scottish Parliament; any proposals to strengthen the Scottish Parliament would require the agreement of Westminster through legislation, and there is no guarantee that any of the UK parties will propose - or follow through on - any such legislation.

Following the referendum in 1979, we saw that, despite the promises made during that campaign and the clear public support for devolution, it took a further 20 years for a democratic Scottish Parliament to be established. The only way to secure and guarantee greater powers for the Scottish Parliament is to vote Yes in the referendum.