First Minister says Scotland at limits of devolution

It also rejects suggestions that the country would need to cut its budget deficit to 3% of GDP to rejoin the EU.

Speaking at the launch in Edinburgh’s National Portrait Gallery on Wednesday, the First Minister warned of a “rightward shift” in UK politics which, he said, made the case for change more pressing.

“The prospect of Nigel Farage becoming Prime Minister is a very real one,” he said. “But even if Farage does not make it to Number 10, he is driving the agenda at Westminster ever more to the right. I believe, with all my head and all my heart, that cannot be the best future for Scotland.”

Mr Swinney said that while devolution had delivered “real benefits”, it could no longer provide the economic transformation he argued Scotland needs.

“There is a ceiling on what the Scottish Parliament’s current powers can achieve,” the paper states. “The establishment of the Scottish Parliament has been good for Scotland. But if we want Scotland to meet its full potential as a nation, the Scottish Government believes that all decisions about Scotland’s society, economy and future need to be made in Scotland.”

John Swinney said Scots would be £10k better off(Image: Jane Barlow/PA)

Speaking to journalists afterwards, the First Minister said: “We obviously try as far as we can to create differential outcomes. So if you take on child poverty, for example, we’ve taken a very different policy approach that is resulting in a reduction in child poverty, which is helping with the living standards of those families.

“I suppose what I’m saying is that we’re either reaching or we have reached the limits of devolution. Because I think the steps we’ve taken on the Scottish child payment are big, bold steps.

“But, as the Joseph Rowntree Foundation said on Monday, we’ve got to do more. I accept that, but I’ve also got to recognise the context in which we operate, and that’s heavily influenced by the macro framework of the United Kingdom.”

The publication comes just days before Mr Swinney heads to Aberdeen for SNP conference, where the party’s position on leaving the UK will be debated on Saturday.

The leadership motion, tabled by Mr Swinney and his deputy, Keith Brown, says the party should contest the election on “a clear platform of national independence” and aim to replicate its 2011 majority, which led to the 2014 referendum.

Winning at least 65 seats would be “the only uncontested way to deliver a new vote on Scotland’s future”, the motion states.

However, the proposal faces significant challenge from party activists.

One amendment, backed by more than 40 branches, would scrap key parts of the leadership motion and replace them with a more hardline strategy.

It would revive Nicola Sturgeon’s de facto referendum plan, meaning a majority of votes for pro-independence parties in 2026 would be treated as a direct mandate to begin independence negotiations.

Other amendments seek to tie the strategy to winning more than 50% of the popular vote, make EU membership an explicit goal, or focus on uniting the wider Yes movement by producing a cross-party independence prospectus. Members will also have the option of remitting the motion for further work or rejecting it entirely.

Asked whether the publication of the paper was partly about internal party management, Mr Swinney said it was “about setting out a positive case for Scotland’s future”.

Central to the new paper is the claim that Scottish households could be £10,200 a year better off under independence.

Drawing on analysis from the Resolution Foundation, the document notes that UK households would be £8,300 per year better off if the country matched the performance of other similarly sized nations. Applying the same methodology to Scotland produces the £10,200 figure.

The paper says: “That does not mean Scottish households would instantly be more than £10,000 richer each year if Scotland was a nation state, or even that we would be as successful just by being independent.

“Instead it shows how much better those comparable nation states do than the UK, and what we might be able to do if we were able to make our own choices about the shape and direction of our economy.

“The prize of independence, the Scottish Government believes, is not matching the performance of these independent countries straight away, but the opportunity to start catching up.”

The Scottish Government’s new independence paper(Image: Jane Barlow/PA)

The First Minister said there was “every reason to believe that we can match the high-productivity, higher living standard societies of our neighbours in north-western Europe.”

These countries, he said. enjoy the “golden combination” of being an independent country in the EU.

The First Minister was asked about the cuts needed to bring down Scotland’s deficit to meet EU rules.

Official Government Expenditure and Revenue Scotland (GERS) figures currently put Scotland’s notional deficit at 11.6% of GDP in 2024-25, compared with 5.1% for the UK as a whole.

All new members of the EU are formally required to work towards reducing budget deficits to 3%.

The Scottish Government’s Q&A document says it is not presenting an estimate of the starting fiscal position of an independent Scotland “given the uncertainty over the outlook for the global, UK and Scottish economies”.

It suggests the larger fiscal deficit reflects “the unbalanced UK economy” and “is not a guide to the public finances of an independent Scotland”.

Asked if he agreed there was a sizeable deficit that would need to be cut, the First Minister said: “What’s also important is that we agree the starting point of an independent Scotland. Because that will be a product of assessing the assets and liabilities of the UK and Scotland at that particular moment. So none of us knows what that starting point looks like definitively.”

He added: “Obviously there are a whole range of powers and opportunities of independence to use the scope and flexibility that independence would give us to create a more dynamic economy, which enables us to emulate the economic performance of other countries and strengthen the public finances of Scotland as a consequence.”

Mr Swinney said it would be hard to argue that remaining in the UK would mean more stability than leaving.

“Look at the arguments that eventually prevailed in the 2014 referendum campaign about economic stability, partnership with Europe, improvements in quality of life and standard of living,” he said. “There’s not a scrap of evidence to support those propositions now.

“And so, essentially, we’ve reached a moment where we’ve got to decide. We can see what life in the United Kingdom looks like because we’ve now had all the experiences since 2014 of seeing the implications of it. And I’m simply saying to people in Scotland, we have an important choice — an alternative pathway that allows us to build an economy focused on improving living standards and prospects.”

He said that while independence would bring challenges, the argument that the UK offered more stability “does not stand up to scrutiny”.

The paper confirms an independent Scotland would initially “continue to use the pound sterling for a period, before moving to the Scottish pound”.

Asked for timings, Mr Swinney said that would be as “soon as practicable”.

The paper accepts that if Scotland were to rejoin the EU, the border with England would become an external frontier of the single market, meaning some checks on goods would be required.

These, it says, would be “risk-based, proportionate and streamlined”, making use of digital technology and trusted trader schemes.

There would be no passport checks for people crossing between Scotland and England, as both would remain part of the Common Travel Area.

The paper makes clear that the King would remain Scotland’s monarch at the point of independence, stating: “His Majesty The King would continue as Head of State. Scotland would be a constitutional monarchy, with the same monarch as the rest of the United Kingdom.”

On defence, it says an independent Scotland “would be able to build new partnerships with other countries and apply to join international organisations like the UN and NATO”.

The Q&A adds: “An independent Scotland could apply to join NATO without nuclear weapons” and that the government “would remove nuclear weapons from Scotland in a safe and responsible manner”.

Scottish Labour finance spokesman Michael Marra said: “John Swinney should be embarrassed at these baseless claims. The Scottish Government’s own GERS statistics show Scotland would lose billions on day one of independence. The SNP cannot be trusted with Scots’ money — they should focus instead on housing, health and education.”

Scottish Conservative deputy leader Rachael Hamilton said: “John Swinney’s latest fantasy paper shows how out of touch he is. While the NHS is struggling, schools are chaotic and bills are soaring, his priority is breaking up the UK. Our message is simple: move on, John.”

Scottish Greens MSP Patrick Harvie said independence was “more vital than ever” given “the rightward drift” in UK politics.

Alba Party leader Kenny MacAskill said: “Of course independence is the way to transform our economy and eliminate poverty. But it is not enough to talk — Scots need action and a clear route out of this social and economic blight.”