AN INDEPENDENT Scotland will be forced to set up its own financial services regulator, the UK government has claimed, raising the prospect of “significant costs” from extra red tape for the industry.
Chief Treasury Secretary Danny Alexander told MPs that plans by the SNP to continue with UK regulators were illegal under European Union law.
Speaking to the Scottish affairs select committee, the Liberal Democrat minister said an independent Scotland would need its own version of the Monetary Policy Committee and Financial Services Authority.
Although the Treasury refused to comment, it also adds to concerns that major financial services providers in Edinburgh, Glasgow and Aberdeen could migrate south of the Border.
The statement by Mr Alexander comes ahead of the UK government’s next paper, to be launched on Monday in Edinburgh, which will look at the impact of independence on financial services.
Scottish finance secretary John Swinney had announced in June last year that Scotland’s industry would continue to be regulated from London.
He said: “As the Bank of England takes on the role of regulator for UK financial services – a very sensible and long-overdue position – retaining the pound will preserve the highly integrated UK financial services market.”
But yesterday Mr Alexander said: “Every independent sovereign state [in the EU] is required to have its own separate system of financial regulation, and that is something that is just a fact.”
A Treasury source added that a second regulatory system would provide the industry with “significant costs”.
But the SNP last night latched on to an answer to the committee from Scottish Secretary Michael Moore, who admitted he was “speculating” on questions of currency and financial regulation.
Following the comments on financial services regulation, Mr Moore was asked by committee chairman Ian Davidson MP, “How do you know that?” Mr Moore said: “Okay, I’m speculating”.
SNP Treasury spokesman Stewart Hosie MP said: “Michael Moore has given the No campaign’s game away.”