Independent Scotland Finances

According to specialist accountancy and finance recruiter Marks Sattin only one in 10 (11%) favour an independent Scottish state while a fifth (22%) remain undecided.

 

The views of finance workers cements the points made during the TV debate which saw Scottish first minister Alex Salmond booed as he repeatedly refused to answer questions put to him by former chancellor Alistair Darling, over what a separate Scottish currency would be.

 

Salmond was heckled when he could not provide any concrete plans as to what would happen if no deal to share the pound were reached.

 

Following the debate, a snap ICM/Guardian poll revealed Darling the clear winner with 56% in his favour compared with 44% support for Salmond’s arguments.

 

The consensus among UK finance professionals tallies with reports from the Office for Budgetary Responsibility (OBR) and the Scottish Government – which downgraded their original forecasts for North Sea oil revenues.

 

The UK’s main political parties have also ruled out continuing a currency union should Scotland become independent.

 

In 2012-13, Scotland ran an underlying fiscal deficit of 8.3% of GDP compared with 7.3% for the whole of the UK, even after factoring in a geographical allocation of North Sea oil revenues.

 

The Confederation of British Industry (CBI) predicts that under the OBR’s revised oil revenue forecast, by 2016-17 – the first year of proposed independence – Scotland’s fiscal deficit will widen to 2.4% higher than the UK’s.

 

There are an estimated 165,000 people employed in financial services in Scotland, equating to 7.6% of Scotland’s total workforce and contributing 12% towards its Gross Value Added (GVA)[2] – the economic value of goods and services produced.

 

Such a contribution to the regional economy by financial and professional services is larger in Scotland than in any other area outside London.

 

Marks Sattin’s research also found the number of financial services jobs in Scotland has grown by nearly a quarter (23%) since 2007. This averages out at a growth rate of 6% per year. By comparison financial services jobs in the UK have increased by only a fifth (20%) over the same period.

 

Dave Way, managing director of Marks Sattin said that research suggests the overwhelming consensus among UK finance professionals is that the numbers simply don’t stack up in favour of independence.

 

‘With the debate hotting up as campaigns turn the final corner towards September’s referendum, it may well be the fiscal fight that clinches public opinion.

 

‘Scotland’s financial services sector has clearly thrived in recent years, increasing by a quarter since 2007. While the tangible impact of an independent Scotland remains to be seen, there are clearly question marks shrouding the potential impact on financial services and the prospects for continued growth.

 

‘On the other hand a ‘yes’ vote will inevitably usher in radical changes in terms of currency, interest and exchange rates and wider business finance. The challenge of setting out Scotland’s stall as an independent nation would call for significant fiscal and monetary expertise, not to mention fundamental leadership and change management skills,’ said Way.