The economic implications for the United Kingdom of Scottish Independence : 2nd report of session 2012-13

In 2014, Scottish people will cast their vote in a referendum on their country's future.

If they vote "Yes" to independence, the 300-year old Act of Union with the rest of the UK would lapse and Scotland would emerge as an independent state.

If they vote "no", Scotland will continue its existence as part of the UK with its own devolved government.

The decision the Scots will have to make is not a simple one.

It will have far-reaching constitutional, political and social, as well as economic consequences.

This report considers a number of economic aspects of separation, including: (i) Impact on the single market in the UK; (ii) International investment in Scotland; (iii) Location implications for medium and small companies; (iv) Scotland's currency; (v) Role of the Bank of England if Scottish financial institutions needed emergency support; (vi) Regulation of Scottish financial institutions; (vii) Division of assets and liabilities; (viii) Underlying fiscal position of Scotland post-independence without a block grant transfer from Westminster; (ix) Membership of the European Union; (x) Defence arrangements. The economic implications of Scottish independence for Scotland and for the rest of the United Kingdom are not symmetrical.

Broadly Scotland's GDP is around one-tenth of that of the rest of the UK.