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Scottish financial services sector 'better off in Britain'

29/08/14

The chief secretary to the Treasury has said Scotland's financial sector is a world leader - but could lose out if the country leaves the UK.

Scotland's financial sector is one of the industries that benefits from being in the UK and will continue to do so as long as Scotland rejects independence in next month's referendum, according to chief secretary to the Treasury Danny Alexander.

Mr Alexander, who is an MP in the Highlands, has been touring Scotland this week with the message that all kinds of businesses are better off as part of the UK.

"We are a world leader in financial services, life sciences, the creative industries and tourism, to name just a few key sectors," Mr Alexander stated.

He added: "As we approach the referendum on 18th September we should all be aware that separation would thwart the recovery and weaken our economy in the long term."

Areas of concern and uncertainty include the issue of currency. The Scottish National Party wants to see a Sterling union between an independent Scotland and the rest of the UK. However, Mr Alexander has already said that his Liberal Democrat party would not agree this, following the lead of Conservative chancellor George Osborne and Labour shadow chancellor Ed Balls.

Scotland's first minister Alex Salmond has claimed this position is a bluff by the three main UK parties, but the financial sector could be a sticking point as it makes up 12 per cent of GDP in Scotland, large enough to be highly destabilising in any future financial crisis. Those against a currency union argue that the rest of the UK would be underwriting Scotland's banks, but not vice versa.

Other concerns include the prospect that a 'foreign' Bank of England would set Scotland's interest rates irrespective of Scottish economic needs.

A Marks Sattin Poll of UK financial sector professionals published earlier this month found just 11 per cent backed Scottish independence, with 22 per cent undecided and most arguing that separation would make no financial or economic sense.

One major concern is that some Scottish banks and other businesses would relocate to the remaining UK in the event of a yes vote next month.

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