Not getting married, should the baby have the dads surname?

If you are unmarried you are allowed to give the baby your own surname - and you don't need his permission. I think your reasons for doing this are very sensible. But if you are feeling nice you could consider the third option, which is to hyphenate both of your surnames together to create a new surname for your baby. For instance: Baby Jones-Smith. That's a good way to compromise. But it's your choice entirely. :-)