EDINBURGH (Reuters) - Uncertainty about Scotland’s future is threatening to damage its financial services industry, the head of the body that represents Scotland’s banks, insurance companies and pension providers said.
British Prime Minister David Cameron held talks on Friday with Nicola Sturgeon, leader of the Scottish National Party, with Scotland’s status back on the agenda, just eight months after an independence referendum and a week after the secessionist SNP won 56 out of 59 seats north of the border in Britain’s general election.
“Uncertainty is not good. It would be good to call a halt to off-the-cuff constitutional policy making and settle down to as stable an environment as we can,” Owen Kelly, chief executive of Scottish Financial Enterprise (SFE), told Reuters this week.
The financial services sector plays a critical part in Scotland’s economy, employing more than 100,000 people and generating around 8 billion pounds each year, equivalent to more than 8 percent of the country’s economic output. Edinburgh-based banks Royal Bank of Scotland and Lloyds Banking Group said last year they would move their registered offices to London if Scotland voted for independence while insurer Standard Life said it would relocate some operations.
Kelly said those institutions could look at the issue again given the SNP’s performance last week, which left the Conservatives ruling from London with just one member of parliament in Scotland, and the nationalists pressing for more powers than those promised at the time of the referendum.
“It’s not inconceivable. At this stage, I think people are just waiting to see what unfolds in the immediate post-election environment. I don’t think there is a renewed urgency ... but those questions are still there,” he said.
Cameron has offered Scotland “the strongest devolved government anywhere in the world”, with more powers to set income tax rates and influence welfare spending, while Sturgeon is pushing for complete control over tax and spending.
Kelly warned of the dangers of granting full fiscal autonomy to Scotland before it is ready.
”If there were a sudden proposal to move rapidly towards fiscal autonomy, then I think that is going to require heroic amounts of work by governments to make it work,“ he said. ”I think what business would like is a period of stability and calm and to take these things pretty carefully ...
“If you take the proposals for full fiscal autonomy, that means you would have a different system of taxation for savings and investments. In which case you need different products, so the question becomes ‘Do I serve this market?'.”
Reporting by Matt Scuffham; Editing by Keith Weir and Kevin Liffey