WE MAY never know fully why voters in Scotland decided against independence, but there’s no doubt that some were swayed by fears over the effect it would have on their finances, writes Jeff Salway
In the final analysis it may be the case that the Scottish Government ultimately paid the price for its obfuscation over so many of the questions posed around the financial implications of independence.
Its failure to provide a satisfactorily robust answer to the currency question undermined confidence in its wider economic case. But currency was just part of it. Last year’s White Paper was supposed to answer all manner of questions, but on the money matters that count – pensions and savings in particular – it was frustratingly vague.
The Scottish Government was hamstrung by the commitment to defer all negotiations until after a Yes vote, but that was too often a convenient excuse when more detailed proposals could and should have been set out.
In this sense the Yes campaign was indebted to the scaremongering of the unionists, which gave them an opportunity to dismiss the more reasonable warnings. Because what is clear is that there would have been consequences for our personal and collective financial wellbeing.
The cost of establishing dual or separate regulation; confidence in pensions and investments; consumer protection; energy bills; the stability of institutions; the strength of Scotland’s financial services sector; the effect of tax changes; the impact on mortgages. All of these and more would have been affected to some degree by a Yes vote, yet many on that side refused to even accept that such risks existed.
That’s why people working in Scotland’s financial services sector certainly breathed a sigh of relief on Friday morning. One reason why so many people in the industry, including SNP supporters, were against independence is because they understood the cost and the sheer complexity of transition, as well as the more fundamental long-term issues.
Their relief will be matched by that at the City regulator, the Treasury and the Bank of England. Like so many in London, the Financial Conduct Authority was evidently complacent over the prospects of independence. Only when the polls narrowed in the final weeks of the campaign did it engage more directly with Scottish financial services firms, the Treasury and the Prudential Regulation Authority in assessing the problems that a Yes vote could create.
Back in Scotland, meanwhile, the country’s financial advisers can enjoy a weekend off work. If the vote had favoured independence they would have faced a flood of enquiries from worried clients on a scale not seen since the Lehman Brothers debacle six years ago.
Incidentally, one senior industry figure told me a year ago, off-record, that the consequences of a Yes vote for UK financial services “would make the Lehman crisis look like a short-term blip”. It was an exaggeration, but not a ridiculous one.
There are myriad lessons to learn from the way the referendum has played out. One is that when it comes to our finances, a failure to acknowledge, accept and understand the risks has a nasty habit of backfiring. The Scottish Government may well have paid a high price for its tendency to duck the tricky questions.