OpinionMay 22 2013

Scotland the Brave

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Their responses have become particularly well-rehearsed in the past month; two studies, discussing the financial fallout if Scots vote “yes” in next year’s referendum, are now on the table.

Of course, advisers will just have to get used to the Scottish inquisition and as somebody born and bred in Edinburgh, so will I. The speculation over the future of financial services will only become more frenzied as we approach 18 September 2014.

The majority of Scottish advisers tell me that discussion is futile. They think independence simply is not happening. But even those who remain agnostic about the idea do not know what would happen if Alex Salmond gets his way. They may have pondered the regulatory consequences, the altered responsibilities regarding pensions, the possible rise in costs for life and pension companies way more than your average Scot.

But they do not possess superior knowledge to the rest of us about how those might be resolved. We are all in the dark. So it is up to the Scottish government to provide concrete plans for how the financial sector would be organised. Officials are currently working on a pensions paper but there is no sign of it being published soon. In the meantime, the Treasury has been first out of the gates, saying that independence could be a triple disaster for advisers, providers and consumers.

It published a 113-page paper which claimed that regulation of advisers and providers could become more onerous and costly. It argued that customers may not enjoy the same tax-free perks as their English neighbours. A less partisan and perhaps more credible report came from the Institute of Chartered Accountants in Scotland, which posed dozens of serious questions about pensions. Will there be an additional state pension, and can the government afford it? Will defined benefit schemes have to be fully funded from day one? Will auto-enrolment be kept? All of them need urgent answers if SNP ministers do not want the worst case scenarios to linger in our minds.

There has as yet been no convincing comeback from the Scottish government, bar a few appearances in the media. We cannot have an informed and balanced debate until we know what a separate financial state would look like. If Alex Salmond wants more ticks in the “yes” box on ballot papers, he will have to set out his stall sooner rather than later.