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| Version 0 | Version 1 |
|---|---|
| Scottish Independence: Treasury claims savers would not be protected | Scottish Independence: Treasury claims savers would not be protected |
| (about 11 hours later) | |
| A UK Treasury analysis paper will say an independent Scotland could have "significant difficulties" providing protection for savers. | A UK Treasury analysis paper will say an independent Scotland could have "significant difficulties" providing protection for savers. |
| The Treasury paper was being launched by Scottish Secretary Michael Moore and economic secretary to the Treasury, Sajid Javid, in Edinburgh. | |
| It will say Scotland would find it "difficult and expensive" to provide protection for savers and pensioners. | It will say Scotland would find it "difficult and expensive" to provide protection for savers and pensioners. |
| The Scottish government dismissed the analysis as "far-fetched" and "flimsy". | The Scottish government dismissed the analysis as "far-fetched" and "flimsy". |
| Scotland's Finance Secretary John Swinney said the risk was no greater to Scotland than it was to the UK. | Scotland's Finance Secretary John Swinney said the risk was no greater to Scotland than it was to the UK. |
| The Treasury report, the third in a series of UK government papers on Scottish independence, will claim that schemes such as the Financial Services Compensation Scheme (FSCS) and the Pension Protection Fund (PPF) provide safeguards for deposits in UK banks and UK pension schemes. | The Treasury report, the third in a series of UK government papers on Scottish independence, will claim that schemes such as the Financial Services Compensation Scheme (FSCS) and the Pension Protection Fund (PPF) provide safeguards for deposits in UK banks and UK pension schemes. |
| It will say that the UK can afford to compensate savers if banks get into difficulties, as they did in 2008 when the government stepped in to guarantee deposits at the time of the banking crisis. | It will say that the UK can afford to compensate savers if banks get into difficulties, as they did in 2008 when the government stepped in to guarantee deposits at the time of the banking crisis. |
| The Treasury argues that Scotland's retail banking sector is dominated by two large banks - RBS and HBoS. | The Treasury argues that Scotland's retail banking sector is dominated by two large banks - RBS and HBoS. |
| It claims that if one of these were to fail, the costs for compensating the depositors would fall almost entirely on the one remaining bank. | It claims that if one of these were to fail, the costs for compensating the depositors would fall almost entirely on the one remaining bank. |
| The paper says: "The principal benefit of the UK in this area is risk-pooling. When one deposit-taker fails, the others are liable to contribute to the cost of compensating eligible depositors." | The paper says: "The principal benefit of the UK in this area is risk-pooling. When one deposit-taker fails, the others are liable to contribute to the cost of compensating eligible depositors." |
| 'Risk spread' | 'Risk spread' |
| On pensions, the paper also claims that UK-wide pension protection was easier to fund by spreading the risks across a much larger number of levy-paying schemes. | On pensions, the paper also claims that UK-wide pension protection was easier to fund by spreading the risks across a much larger number of levy-paying schemes. |
| The paper says: "It would be difficult for an independent Scotland to maintain an effective standalone scheme. | The paper says: "It would be difficult for an independent Scotland to maintain an effective standalone scheme. |
| "The UK has a large number of defined benefit schemes, meaning that the risk is spread." | |
| It also states that an independent Scotland would be required to provide such protection through a similar guarantee fund under EU rules. | It also states that an independent Scotland would be required to provide such protection through a similar guarantee fund under EU rules. |
| Mr Swinney said the Treasury's "creative accounting on behalf of the No campaign simply does not add up". | Mr Swinney said the Treasury's "creative accounting on behalf of the No campaign simply does not add up". |
| He said: "It does not reflect the reality of how financial services operate or stand up to expert scrutiny. | He said: "It does not reflect the reality of how financial services operate or stand up to expert scrutiny. |
| "Constructed on a AAA credit rating that has since been shredded, this is just the latest attempt to attack an independent Scotland's ability to be an economic success story." | "Constructed on a AAA credit rating that has since been shredded, this is just the latest attempt to attack an independent Scotland's ability to be an economic success story." |
| Mr Swinney added: "Assertions and claims about Scotland's financial sector are entirely misleading - in terms of share of GDP, in fact, financial services are actually smaller for Scotland at 8.3% than the UK at 9.6%. | Mr Swinney added: "Assertions and claims about Scotland's financial sector are entirely misleading - in terms of share of GDP, in fact, financial services are actually smaller for Scotland at 8.3% than the UK at 9.6%. |
| "So if the argument is about risk, then the risk is with the UK." | "So if the argument is about risk, then the risk is with the UK." |
| Ahead of the paper's publication, Scottish Secretary Michael Moore said the current set up was "best for all of us". | |
| He told BBC Radio Scotland's Good Morning Scotland programme that the union, unlike independence, offered certainty and stability. | |
| Mr Moore was also asked about an interview by former Labour chancellor Denis Healey, now Lord Healey of Riddlesden, who admitted that the value of oil to the UK was a prime motivation behind Westminster's opposition to independence now and in the 1970s. | |
| Lord Healey told Holyrood magazine: "I think we did underplay the value of the oil to the country because of the threat of nationalism, but that was mainly down to Thatcher. | |
| "We didn't actually see the rewards from oil in my period in office because we were investing in the infrastructure rather than getting the returns and really, Thatcher wouldn't have been able to carry out any of her policies without that additional 5% on GDP from oil." | |
| Different era | |
| In response, Mr Moore said today's era brings with it greater scrutiny than that seen in the 1970s. | |
| He added: "I am very happy for anybody, from whatever perspective they take on this debate, to scrutinise this report we are putting out today. | |
| "We are living in an era of greater scrutiny than 40 years ago. The spirit of that will be shown by this paper, like the two papers previously. | |
| "We are setting out the arguments, we are setting out all the sources of our information. | |
| "People can challenge that and engage with it. When they do, they will see that the overwhelming argument is we get the best of both worlds by being in the UK - a very strong financial sector and protection when things go wrong." |