Salmond dismisses business concerns over independence as scaremongering
27 Feb 2014
Alex Salmond has dismissed business concerns over the consequences of separation – on the day Standard Life warned thousands of jobs may have to be moved south.
RBS also expressed concerns that independence would affect their “credit ratings”, which could have a knock-on effect for customers paying mortgages and loans.
Yet, during First Minister’s Questions, Alex Salmond branded those uttering such warnings as “scaremongers”.
Scottish Conservative leader Ruth Davidson MSP challenged the First Minister to respond to comments from Standard Life Chief Executive David Nish, who said he had started to establish companies to operate outside of Scotland in the event of independence.
The firm warned that five keys issues, ranging from what currency there would be to EU membership, remain unanswered.
With 5,000 employees in Scotland, Standard Life is just the latest firm to express concerns about the impact of separation.
Other major firms such as BP, Asda and Morrisons have also warned of the consequences independence could have on their business operations.
Scottish Conservative leader Ruth Davidson MSP said:
“When one of Scotland’s most prominent financial institutions warns it may move its operations out of Scotland in the event of independence it’s time to sit up and take notice.
“This morning 5,000 Standard Life workers woke up wondering whether separation could see them having to move south to keep their job.
“Today, we also have RBS expressing concern that independence could hurt its credit rating, which could have a massive impact on employees and customers.
“These are some of Scotland’s major employers putting forward a sober analysis of the impact of breaking up the UK, but the kneejerk reaction from the SNP is to shout them down and accuse them of scaremongering.
“In Alex Salmond’s world everyone who does not agree with him are part of some kind of wild conspiracy.
“But the simple truth is the First Minister has no answers for the key questions on currency and EU membership that businesses like Standard Life are crying out for.
“A company which has made Scotland its home for 189 years is now threatening to leave because of Alex Salmond’s independence obsession.
“His policy is now threatening jobs in this country.”
Notes to editors:
Standard Life– 5,000
David Nish, Chief Executive:
As a large company and employer based in Scotland, we have been following the constitutional debate ahead of the independence referendum on 18 September 2014.
We have a long-standing policy of strict political neutrality and at no time will we advise people on how they should vote. However, we have a duty and a responsibility to understand the implications of independence for our four million UK customers, our shareholders, our people and other stakeholders in our business and take whatever action is necessary to protect their interests.
For this reason, we have engaged with key politicians and analysed the relevant papers published by both sides of the independence debate. These include the Scottish Government publication Scotland’s Future (the ‘White Paper’) and the UK Government’s Scotland Analysis series.
At the time of publishing this report (February 2014), we believe a number of material issues remain uncertain. These include:
• The currency that an independent Scotland would use
• Whether agreement and ratification of an independent Scotland’s membership to the European Union would be achieved by the target date (currently 24 March 2016)
• The shape and role of the monetary system
• The arrangements for financial services regulation and consumer protection in an independent Scotland
• The approach to individual taxation, especially around savings and pensions, as a consequence of any constitutional change
We will continue to seek clarity on these matters, but uncertainty is likely to remain. In view of this, there are steps we will take based on our analysis of the risks. For example, we have started work to establish additional registered companies to operate outside Scotland, into which we could transfer parts of our operations if it was necessary to do so. This is a precautionary measure to ensure continuity of our businesses’ competitive position and to protect the interests of our stakeholders.
As Chief Executive, my commitment is whatever happens we will continue to serve the needs of our customers and maintain our competitive position.
From RBS annual report:
During 2013, the focus on the question of potential Scottish independence from the UK has heightened and the Scottish government will be holding a referendum in September 2014.
A vote in favour of Scottish independence would be likely to significantly impact the Group’s credit ratings and
could also impact the fiscal, monetary, legal and regulatory landscape to which the Group is subject. Were Scotland to become independent, it may also affect Scotland’s status in the EU.
Nobel Prize winner Economist Paul Krugman:
“It’s true, as pointed out here, that England, I mean the rump UK, I mean continuing Britain, whatever, can’t prevent the Scots from using the pound, just as the United States can’t stop Ecuador from using dollars. But the lesson of the euro crisis, surely, is that sharing a common currency without having a shared federal government is very dangerous.”
Bank of England governor Mark Carney:
“The euro area is now beginning to rectify its institutional shortcomings, but further, very significant steps must be taken to expand the sharing of risks and pooling of fiscal resources.
“In short, a durable, successful currency union requires some ceding of national sovereignty.
“It is likely that similar institutional arrangements would be necessary to support a monetary union between an independent Scotland and the rest of the UK.”
Other quotes if needed:
Sir Nicholas MacPherson, Permanent Secretary to HM Treasury, letter to the Chancellor of the Exchequer, 11 February 2014
I would advise strongly against a currency union as currently advocated, if Scotland were to vote for independence.
Commenting on the referendum related issues raised by today’s publication of Standard Life’s Annual Report and Accounts, Liz Cameron, Chief Executive of Scottish Chambers of Commerce said:
“Scottish businesses plan ahead for different situations, whether it is the referendum or other economic changes and they are obliged to report external issues which may impact on their business – this is normal practice.
“Today’s announcement from Standard Life confirms what businesses have said since the referendum debate started: uncertainty from any source can impact on the operations of any business. It is therefore sensible and necessary to plan for possible eventualities and there is a responsibility towards both shareholders and customers to do so.
“Businesses can plan best in a stable economic environment. The referendum is necessarily creating some degree of uncertainty and businesses will naturally work with this and plan accordingly, so whether Scotland chooses to vote ‘yes’ or ‘no’, they will need stronger detail from both sides of the campaign on issues such as tax, currency and European Union membership in order that they can best plan for the future.”
Simon Walker, director general of the Institute of Directors, said: “While businesses on both sides of the border would regret new transaction costs resulting from an independent Scotland adopting a new currency, this inconvenience would pale in comparison to the financial danger of entering an unstable currency union.
“As we’ve seen with the eurozone, having countries with separate fiscal plans using the same currency can be very problematic. And if an independent Scotland did not have control of its monetary policy, it would raise the question, is that independence?”
John Cridland, director general of the CBI, said: “Scotland needs a stable currency, within a secure single market, so that Scottish companies have the best chance to grow and create jobs. Staying in an unstable currency union would have serious economic consequences.
“With the three main UK political parties making it clear that keeping the pound after independence is not an option, it is maintaining the union that offers the stability of sterling that businesses need.”
Rt Hon George Osborne MP, Chancellor of the Exchequer, 13 February 2014
On this basis, the official advice I have received from civil servants in the Treasury is that they would not recommend a currency union to the Government of the continuing UK.
Listening to that advice, looking at the analysis myself
It is clear to me:
I could not as Chancellor recommend that we could share the pound with an independent Scotland.
The Scottish government says that if Scotland becomes independent there will be a currency union and Scotland will share the pound.
People need to know – that is not going to happen.
Because sharing the pound is not in the interests of either the people of Scotland or the rest of the UK.
The people of the rest of the UK wouldn’t accept it and Parliament wouldn’t pass it.
Rt Hon Danny Alexander MP, Chief Secretary to the Treasury, 13 February 2014
As a Scot and as Chief Secretary to the UK Treasury, on the basis of this analysis, I couldn’t recommend a currency union to the people of Scotland and my party couldn’t agree to such a proposition for the rest of the UK.
The Scottish government continue to pretend that an independent Scotland could continue to share the pound. It couldn’t, without agreement. And because a currency union wouldn’t work for anyone, it simply isn’t going to happen. The Scottish government now need to work out what their alternative currency proposal is and set it out openly.
This isn’t bluff, or bullying, it’s a statement of fact. The Scottish government’s claims that an independent Scotland could or should be able to share the pound are pure fiction. When we vote in September, no one in Scotland should vote for independence in the belief that we could keep the pound.
A strong, stable, growing Scottish economy is best served by keeping the United Kingdom together. That is the only way for Scotland to keep the pound.
Rt Hon Ed Balls MP, Labour Party Shadow Chancellor of the Exchequer, 14 February 2014
All this analysis tells us that a currency union between the UK and a separate Scotland cannot work, will be unstable and bad for both a separate Scotland and the rest of the UK. And having helped to keep the UK out of the Euro I cannot import in to the UK the sort of problems which the Eurozone has faced.
I want Scotland to stay in the UK. But if Scotland were to vote to break away, then I do not believe a currency union would be in the interests of either an independent Scotland or the rest of the UK.
And as Chancellor in a UK Labour government after the general election, I simply could not support or recommend to Parliament that we form a currency union with a separate Scotland.
Looking at the economics of this, it’s the only conclusion I can reach. A currency union between an independent Scotland and the rest of the UK is not going to happen.
So I hope the Scottish people vote to stay part of the UK. But if Scotland votes to break away they will be voting to leave both the fiscal and currency union that we now have – and which has worked to the benefit of all.
Rt Hon Carwyn Jones AM, First Minister of Wales, 21 November 2013
I am not convinced that a shared currency would work from the Welsh perspective.
If one part of the currency union decides to leave, then that’s a matter for them.
But if an independent nation wants to join, then that is a matter for the people of Wales, Northern Ireland and England – and as the first minister of Wales, I would want the right to have a say.
Alex Salmond described as acting like a spoilt child: