Scottish independence: Finance sector ‘may be hit’

INDEPENDENCE would cause extensive uncertainty and result in greater cost and complexity for Scotland’s financial services sector, according to the industry’s umbrella body.

Standard Life, based in Edinburgh, is one of the key members of SFE. Picture: TSPL

A briefing note produced by Scottish Financial Enterprise warns its members that a separate Scottish currency is a “real possibility”, while adding that a “dollarization” arrangement - where the pound would remain Scotland’s currency without collaboration or agreement with the Bank of England - cannot be ruled out.

SFE, which represents the financial services industry in Scotland which employs 100,000 people directly and contributes £7 billion annually to the Scottish economy, says independence would lead to two separate tax and regulation systems.

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As a politically “neutral” organisation, the SFE paper said it aimed to provide impartial advice to its members.

“Many of the most important questions about the consequences of a ‘Yes’ vote cannot be answered before it occurs,” the paper reads.

“Uncertainty is extensive and likely to continue for some time after such a vote. Compared with the business environment as it stands, greater cost and complexity are certain. The industry will have to reconfigure to deal with the changed political landscape.”

According to the paper, a Yes vote would affect Scotland’s international competitiveness, creating increased cost and complexity which would not apply in the rest of the UK and other countries.

The SFE paper also suggested that an independent Scotland would likely become a member of the EU, but the period of transition is unknown.

The paper warns that there are “strong reasons” to believe the transition period would last “a lot” longer than 18 months. If that were the case, it would mean the SNP missing its March 24 2016 independence deadline.