Economy could be ‘dragged down’ by referendum uncertainty - Danny Alexander

THE UK economy could be affected if Scotland is “dragged down” by the uncertainty surrounding an independence referendum, the Chief Secretary to the Treasury said today.

Danny Alexander joined the row between the UK Government and Nationalist ministers at Holyrood over the possible impact of the Scottish Government’s planned vote on the country’s constitutional future.

The spat was sparked when Chancellor George Osborne claimed the “instability and uncertainty that hangs over the Scottish economy” was as a result of the planned independence referendum, for which no date has yet been revealed.

But Finance Secretary John Swinney accused the Tory of trying to sabotage investment north of the border with his remarks.

He wrote to Mr Osborne demanding answers, but the Scottish Government’s concerns were increased when Mr Alexander - not Mr Osborne - replied.

In his letter to Mr Swinney, the Chief Secretary to the Treasury said the “economic impact of the uncertainty created by the Scottish Government is increasingly clear to see” and added: “The uncertainty created by the Scottish Government is damaging not just Scotland but the whole of the UK.

“At a time when there are severe headwinds facing the whole UK economy, the last thing the UK needs is a self-inflicted wound by the Scottish Government.”

Today he warned that at a time of “severe” economic problems “what we really don’t need in Scotland or the UK is this sort of self-inflicted wound holding us back”.

Mr Alexander told BBC Radio Scotland’s Good Morning Scotland: “Scotland is 10 per cent of the UK economy so this isn’t just about Scotland.

“If Scotland succeeds it helps the whole of the UK, if Scotland is dragged down by this uncertainty then that affects the whole of the UK.”

The Liberal Democrat minister went on: “You wont find anyone more committed in the UK Government than myself and the Chancellor to seeing investment in Scotland and investment across the whole of the UK.

“But we do face very severe problems as a country, we face severe problems because of the legacy that Labour left us of huge debts and deficits, we face huge headwinds in the economy because of the challenges in the eurozone. And what we really don’t need in Scotland or the UK is this sort of self-inflicted wound holding us back.”

He added: “When you’ve got the Scottish Government and the UK Government pulling together doing the right thing for the economy then Scotland works well, because we’re stronger together, weaker apart.”

Mr Alexander insisted that “as a Scot I have a responsibility to tell it as I see it” and said: “As someone who talks to businesses regularly I think it is very important to say to the Scottish Government there is a particular issue here that is threatening investment that we all want to see.”

Finance Secretary John Swinney, speaking on the same programme, said: “I think what the Chief Secretary’s response this morning illustrates is the United Kingdom Government is now becoming ever more hysterical in how it responds to this particular issue.

“What I asked the Chancellor was a simple set of questions about what had motivated him to put out a message that tried to sabotage the Scottish economy.

“I didn’t get a reply from the Chancellor, I got a set of other answers from the Chief Secretary to the Treasury, who cannot possibly know what the Chancellor was thinking about when he set out his views.

“I think at the very least the Chancellor should reply directly to the accusation that I put to him that he’s trying to sabotage the Scottish sabotage.”