Indyref2 bigger threat to finance sector than Brexit - report

Edinburgh's financial district. Picture: TSPLEdinburgh's financial district. Picture: TSPL
Edinburgh's financial district. Picture: TSPL
The prospect of a second Scottish independence referendum is causing 'even greater' uncertainty than Brexit for the key financial services industry, a new report has found.

It would be in Scotland interests to retain the key “passporting” arrangement which allows the financial services industry to operate EU-wide, according to the study by ex-Treasury economist Jeremy Peat and former Scottish Financial Enterprise chief Owen Kelly.

They call on the UK government to press of a flexible post-Brexit deal that would allow “retention and recruitment” of high skilled staff from overseas.

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“The risks to relationships for the financial sector with counterparts and customers in the rest of the UK would intuitively appear at least as great as the risks from a hard Brexit while remaining within the UK,” the report says. “The uncertainties for the sector following independence look even greater than those following a sharp Brexit.”

Tory finance spokesman Murdo Fraser said: “The SNP’s obsession with independence is the biggest threat facing our economy.”

Meanwhile, Scotland’s international development minister Alasdair Allan is to hold talks with the UK government at Westminster after UK ministers rejected calls for a more flexible post-study work visa system for international students north of the Border.