From 1689 to 1697, William was at war with France, partly financed by Scottish taxes and partly fought by Scottish soldiers. Yet many Scots, mindful of the Auld Alliance, disapproved of the war and others suffered financially from the disruption to trade with France. There were other economic irritants too, principally the legally sanctioned monopoly that English merchants had over trade with the English colonies. This monopoly inspired the Darien Scheme, a plan to establish a Scottish colony in Panama. The colonists set off in 1698, but, thwarted by the opposition of both William and the English merchants, the scheme proved a miserable failure. The colony collapsed with the loss of £200,000 ? an amount equal to half the value of the entire coinage in Scotland ? and an angry Scottish Parliament threatened to refuse the king taxes as rioting broke out in the cities.

Meanwhile, in the north, the Highlanders blamed William for the massacre of the MacDonalds of Glen Coe. In 1691, William had offered pardons to those Highland chiefs who had opposed his accession, on condition that they took an oath of allegiance by New Year?s Day 1692. Alasdair MacDonald of Glen Coe had turned up at the last minute, but his efforts to take the oath were frustrated by the king?s officials, who were determined to see his clan, well-known for their support of the Stewarts, destroyed. In February 1692, Captain Robert Campbell quartered his men in Glen Coe and, two weeks later, in the middle of the night, his troops acted on their secret orders and slaughtered as many MacDonalds as they could. Thirty-eight died, and the massacre caused a national scandal, especially among the clans, where 'Murder under Trust' - killing those offering you shelter - was considered a particularly heinous crime.

The situation in Scotland was further complicated by the question of the succession. Mary died without leaving an heir and, on William?s death in 1702, the crown passed to her sister Anne, who was also childless. In response, the English Parliament secured the Protestant succession by passing the Act of Settlement, which named the Electress Sophia of Hanover as the next in line to the throne. The Act did not, however, apply in Scotland, and the English feared that the Scots would invite James Edward Stewart back from France to be their king. Consequently, Parliament appointed commissioners charged with the consideration of ?proper methods towards attaining a union with Scotland?. The project seemed doomed to failure when the Scottish Parliament passed the Act of Security in 1703, stating that Scotland would not accept a Hanoverian monarch unless they had first received guarantees protecting their religion and their trade.

Nevertheless, despite the strength of anti-English feeling, the Scottish Parliament passed the Act of Union by 110 votes to 69 in January 1707. Some historians have explained the vote in terms of bribery and corruption. This certainly played a part (the Duke of Hamilton, for example, switched sides at a key moment and was subsequently rewarded with an English dukedom), but there were other factors. Scottish politicians were divided between the Cavaliers ? Jacobites (supporters of the Stewarts) and Episcopalians ? and the Country party, whose Presbyterian members dreaded the return of the Stewarts more than they disliked the Hanoverians. There were commercial considerations too. In 1705, the English Parliament had passed the Alien Act, which threatened to impose severe penalties on cross-border trade, whereas the Union gave merchants of both countries free access to each other?s markets. The Act of Union also guaranteed the Scottish legal system and the Presbyterian Kirk, and offered compensation to those who had lost money in the Darien Scheme.

Under the terms of the Act, both parliaments were to be replaced by a new British Parliament based in London, with the Scots apportioned 45 MPs and 16 peers. There were riots when the terms became known, but no sustained opposition.