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| Scottish independence could threaten thousands of banking jobs | Scottish independence could threaten thousands of banking jobs |
| (4 months later) | |
| The Treasury has claimed that thousands of Scottish banking and finance jobs could shift to England after independence because major Scottish finance firms would want to chase much larger markets in England. | The Treasury has claimed that thousands of Scottish banking and finance jobs could shift to England after independence because major Scottish finance firms would want to chase much larger markets in England. |
| The warning from Sajid Javid, the economic secretary to the Treasury, came as his department published a study outlining how Scottish independence could cause significant risks for mortgages, insurance products and pensions from increased regulation, borrowing and business costs for the finance sector. | The warning from Sajid Javid, the economic secretary to the Treasury, came as his department published a study outlining how Scottish independence could cause significant risks for mortgages, insurance products and pensions from increased regulation, borrowing and business costs for the finance sector. |
| The most serious impact could be on Scottish banks and insurance firms, such as RBS and Standard Life, Javid said, because independence would end the "seamless", fully integrated single market for financial services across the UK. | The most serious impact could be on Scottish banks and insurance firms, such as RBS and Standard Life, Javid said, because independence would end the "seamless", fully integrated single market for financial services across the UK. |
| The report, the latest UK government critique of independence, pointed out that about 85,000 people in Scotland were directly employed in the financial services sector, with a further 100,000 employed indirectly, comprising about 7% of jobs in Scotland. In 2010 the sector contributed about £9bn to the Scottish economy. | The report, the latest UK government critique of independence, pointed out that about 85,000 people in Scotland were directly employed in the financial services sector, with a further 100,000 employed indirectly, comprising about 7% of jobs in Scotland. In 2010 the sector contributed about £9bn to the Scottish economy. |
| A senior Treasury source admitted there was a high degree of uncertainty about whether independence would necessarily increase the costs of mortgages, pensions and insurances to Scottish customers. | A senior Treasury source admitted there was a high degree of uncertainty about whether independence would necessarily increase the costs of mortgages, pensions and insurances to Scottish customers. |
| While the analysis paper warned that 2 million Scots would have to move their savings from UK-run ISAs, losing tax relief and potentially incurring increased savings costs, the official acknowledged that the Scottish and UK governments would have "a huge interest in making this work" for the mutual good. | While the analysis paper warned that 2 million Scots would have to move their savings from UK-run ISAs, losing tax relief and potentially incurring increased savings costs, the official acknowledged that the Scottish and UK governments would have "a huge interest in making this work" for the mutual good. |
| But about 90% of the business for Scottish financial services is outside Scotland, with 84% of Scottish banks' mortgages sold in the rest of the UK, which would leave the industry with substantial questions if the country voted for independence in September 2014. | But about 90% of the business for Scottish financial services is outside Scotland, with 84% of Scottish banks' mortgages sold in the rest of the UK, which would leave the industry with substantial questions if the country voted for independence in September 2014. |
| Even if Scotland did share sterling under a currency union with the UK and had the Bank of England as its central bank, Scotland would be forced under European law to have a separate financial regulatory system and its own deposits guarantee fund, to compensate savers if a bank crashed, which would drive up their costs and damage profitability. | Even if Scotland did share sterling under a currency union with the UK and had the Bank of England as its central bank, Scotland would be forced under European law to have a separate financial regulatory system and its own deposits guarantee fund, to compensate savers if a bank crashed, which would drive up their costs and damage profitability. |
| "If you're a Scottish-headquartered financial services company, at the moment, you've a seamless market of 65 million people. Post-independence your home market is going to be 5 million and your neighbouring market is a foreign country [and] is going to be 60 million people," Javid said. | "If you're a Scottish-headquartered financial services company, at the moment, you've a seamless market of 65 million people. Post-independence your home market is going to be 5 million and your neighbouring market is a foreign country [and] is going to be 60 million people," Javid said. |
| "You're going to have to make a choice: which one are you going to focus your resources on and which one is going to give you more profitability and better results? It's obvious between 5 million and 60 million where the choice would lie, and that's bound to have an impact on Scottish jobs and it's bound to have an impact on the availability of products in Scotland." | "You're going to have to make a choice: which one are you going to focus your resources on and which one is going to give you more profitability and better results? It's obvious between 5 million and 60 million where the choice would lie, and that's bound to have an impact on Scottish jobs and it's bound to have an impact on the availability of products in Scotland." |
| Backed by Michael Moore, the secretary of state for Scotland, Javid said these Scottish lenders could also face higher borrowing costs and further pressure from shareholders to cut operating costs. | Backed by Michael Moore, the secretary of state for Scotland, Javid said these Scottish lenders could also face higher borrowing costs and further pressure from shareholders to cut operating costs. |
| If these businesses shifted many of their operations to England, "it's bound to have an impact on the general availability and choice of financial products for ordinary Scots both for mortgages, insurance and investment products", the minister said. | If these businesses shifted many of their operations to England, "it's bound to have an impact on the general availability and choice of financial products for ordinary Scots both for mortgages, insurance and investment products", the minister said. |
| John Swinney, the Scottish finance secretary, dismissed the report, asserting that Scotland's wealth and expertise in financial services would provide a great deal of security for the industry and the economy. | John Swinney, the Scottish finance secretary, dismissed the report, asserting that Scotland's wealth and expertise in financial services would provide a great deal of security for the industry and the economy. |
| "The Treasury's creative accounting on behalf of the no campaign simply does not add up. 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," Swinney said. | "The Treasury's creative accounting on behalf of the no campaign simply does not add up. 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," Swinney said. |
| "The Tory government and their Lib Dem followers will use this paper to make all sorts of implausible claims about things like mortgages, when the reality is that many countries around Europe, including those of similar size to Scotland, have substantially cheaper mortgage rates than the UK." | "The Tory government and their Lib Dem followers will use this paper to make all sorts of implausible claims about things like mortgages, when the reality is that many countries around Europe, including those of similar size to Scotland, have substantially cheaper mortgage rates than the UK." |
| Martin Gilbert, chief executive of Aberdeen Asset Management, told a conference in London that the near-demise of RBS and Bank of Scotland had put an Exocet into the Scottish financial system and made it tougher for the independence vote. "Independence is all about North Sea oil," he added. | Martin Gilbert, chief executive of Aberdeen Asset Management, told a conference in London that the near-demise of RBS and Bank of Scotland had put an Exocet into the Scottish financial system and made it tougher for the independence vote. "Independence is all about North Sea oil," he added. |
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