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Independence (Financial Effects)

Volume 540: debated on Wednesday 22 February 2012

15. What preparations his Department has made for dealing with issues that would arise in the event of Scottish independence. (95276)

The Scottish Government are proposing independence, but they have failed to set out what independence would mean for Scotland. This Government are clear that Scotland is stronger for being part of the United Kingdom and that the United Kingdom is stronger for having Scotland within it.

Does my right hon. Friend agree that Scottish politicians, instead of focusing on independence, should, in these difficult economic times, stop depending on one industry in the North sea and look to create a broader industry sector that will provide economic support for the rest of Scotland?

My hon. Friend is right that our primary concern is to ensure that we get the economy on the right track. By fixing the deficit, rebalancing the economy and ensuring that there is sustainable growth, we will do just that. In the meantime, we should get on with resolving the issue of independence to remove the uncertainty that it causes. [Interruption.]

Does the Secretary of State agree that in the event of independence, there would be many unnecessary financial and regulatory costs to both Scotland and England in the areas along the border between the two countries? In an extreme case, there is the absurd possibility of border controls.

First, I am not contemplating Scotland actually becoming independent, because I am confident that Scotland will vote to stay in the United Kingdom. However, my hon. Friend highlights a central issue. The SNP cannot dodge some of the issues that there would be in relation to Europe if we were to become separate, including those to do with the borders. As a borders MP, I think that those issues are as absurd as he does.

Has the Secretary of State considered the recent study by the National Institute of Economic and Social Research, which shows that even if it formed a sterling zone with the UK, a separate Scotland would experience volatile public finances, inherit debts at either 70% or 80% of GDP, and face tougher constraints on levels of tax and borrowing than it does as an equal participant in fiscal union with the UK?

Of course I have studied that report. The hon. Gentleman puts its conclusions succinctly. Those are points that the SNP has failed to answer.