Scottish independence: the economics

Standard Life's intervention follows comments by BP, RBS, Sainsbury's, Stagecoach, George Osborne and Mark Carney With just under seven months to go until the Scottish referendum, the economics of independence are centre-stage. On Thursday Standard Life became the latest company to weigh in to the debate, with a warning that it could move to England to protect its business, in a significant intervention from a pillar of Scotland's financial services industry that has been based in Edinburgh from nearly 190 years. The financial services firm cited uncertainties about Scotland's currency, financial regulations and future membership of the European Union – all questions likely to remain under the microscope in the coming months. Here are the key interventions in the economic and financial debate, starting with the world of business: BP Bob Dudley, the chief executive of BP, has said he does not want to see Scotland "drifting away" from the UK, because independence would almost certainly mean higher costs for his business. "These are quite big uncertainties for us and at the moment we're continuing to invest at a pace because these projects are under way but it's a question mark. I think all businesses have a concern." He also poured cold water on claims from Scotland's first minister that Scotland could share the pound with the rest of the UK: "Alex Salmond's claims about sharing the currency were demolished by the governor [of the Bank of England]. I don't think a workable currency can be created." Weir "Very serious questions" need to be answered about Scottish independence, according to one of Scotland's biggest companies, engineering group Weir. The Glasgow-based company, which employs about 14,000 people in more than 70 countries, said business must have a voice in the debate alongside the political rhetoric of the yes and no camps. Keith Cochrane, Weir's chief executive, has commissioned a report into independence, examining currency, pensions, trade and taxation. The findings will be released by early April. "This is a big issue, the debate needs to be focused on objective facts. Alongside other voters, I will personally be able to participate on [polling day] 18 September, but I think it's really important that business contributes to that debate." Royal Bank of Scotland Scotland's biggest bank, the 81% taxpayer owned Royal Bank of Scotland, has tried not to draw attention to its concerns about independence. Ross McEwan, RBS's chief executive, merely said he was monitoring the debate and would try not to do anything to raise the temperature. But RBS, which has 12,000 employees in Scotland, is worried. Buried in its 2013 results it expresses worry about how uncertainty surrounding independence, and a potential referendum on EU membership in 2017, had already "negatively affected" its business. "The group's businesses, earnings and financial condition have been and will continue to be negatively affected by global economic conditions, the instability in the global financial markets and increased competition and political risks including proposed referendums on Scottish independence and UK membership of the EU. Supermarkets Justin King, the outgoing chief executive of Sainsbury's, was accused of scaremongering by the Scottish National Party, when he warned that independence could mean higher food prices north of the border. "Once it is a separate country, we and other retailers will take a view of what the cost structure is of that industry, and of course the revenue structure too," King told the Financial Times. "If you were to strike that today, there is no doubt Scotland is a more costly country [in which] to run a grocery retail business." Asda and Morrisons have also warned consumers would face higher prices, reflecting the higher transport costs for some remote areas. "Why should the English and Welsh consumer subsidise this increased cost of doing business," Dalton Phillips, chief executive of Morrisons, told the paper. Stagecoach The Perth-based bus and rail group was co-founded by a prominent supporter of Scottish independence, Sir Brian Souter. The group's chief executive, Martin Griffiths, has brushed off concerns that a yes vote will damage one of Scotland's biggest private businesses. Speaking in 2012, he said: "I don't think, from a group point of view and risk register point of view, it changes anything we are looking at at this point." The Treasury The chancellor George Osborne, backed by the Liberal Democrats and Labour, has ruled out a currency union with Scotland as unworkable. Arguing that a currency union would cost jobs and money, Osborne said it would fail to provide economic security for Scotland or the rest of the UK. He also dismissed a threat by Alex Salmond not to pay Scotland's share of the national debt as "implausible" because it would lead to "crippling" interest rates for householders and businesses. Osborne's intervention came as Sir Nicholas Macpherson, the Treasury permanent secretary, took the unusual step of signing and releasing a public letter to Osborne saying he would advise strongly against the union. The Bank of England Mark Carney, the governor of the Bank of England, attempted to steer a cautiously neutral line in a speech on currency union last month – just ahead of the speech from Osborne. But he warned that an independent Scotland would need to give up a significant amount of its freedom over taxation and spending if it wants to form a currency union with the rest of the UK. Although Carney said a currency union was feasible, he pointed to the eurozone crisis as a warning of what could go wrong when the institutional arrangements are not in place. "A durable, successful currency union requires some ceding of national sovereignty." Alex Salmond Scotland's first minister has accused the three main unionist parties of "bluff" and "bluster" over their warning that Scotland could no longer keep the pound. He also revealed his plan B – Scotland could go on using the pound unilaterally, without the say-so of Westminister. "It's not a question of 'keeping the pound', it's a question of whether there would be an agreed currency union," he told the BBC. He has also argued that North Sea oil will continue to boost Scotland's economy, telling Scots that the remaining reserves are worth £300,000 per person. Earlier this week he set out plans for a £10.6m innovation centre in Aberdeen to help maximise recovery from the declining reserves. Economics Scottish independence Scottish politics Scotland Standard Life Jennifer Rankin theguardian.com © 2014 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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