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SNP’s Stewart Hosie and Labour’s Gregg McClymont go head-to-head over Scottish independence

This week, Money Marketing’s cover story focuses on the uncertainties facing insurance companies, platforms and advisers ahead of the Scottish independence vote on 18 September.

Here, SNP finance and treasury spokesman Stewart Hosie and Labour shadow pensions minister Gregg McClymont put forward competing arguments for and against a Yes vote.

For

Hosie

A series of independent reports from the N56 thinktank, backed by business, recently assessed Scotland’s current financial standing and its economic potential. The Scotland Means Business reports set a target for the nation to move from being the 14th wealthiest in the world (ahead of the UK, France and Japan) to a top five position.

They said to meet that ambition, we must nurture the industries in which we have a competitive advantage. Perhaps unsurprisingly, the financial sector is a priority but its growth will rely on a number of factors, including a competitive tax regime, infrastructure, and a highly skilled workforce.

Scotland’s financial sector is a great strength but we have the potential to do even better. I believe we can build on our existing strengths in finance to create a “Frankfurt of the North” including more new entrant banks, asset managers and pension funds.

At present our potential is limited by a straightjacket of Westminster public policy tailored to the short-term interests of London and the South-east of England. We also suffer from a London-centric economic model whereby our wealth and talent is drained south. If Scotland is to be all it can be we need the full job-creating economic powers of independence.

There are of course specific opportunities for the financial services sector such as the financial management of an oil investment fund or new public and private sector infrastructure. Jupiter Asset Management, among others, has highlighted the business opportunities they see from an independent Scotland. 

Most of all, Scotland’s financial services industry will benefit like everyone else from decisions about the future of Scotland being taken by those who care most – the people who live and work here.

Stewart Hosie is an MP for Dundee East, and an SNP finance and treasury spokesman

Against

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Almost all the customers to whom Scots financial workers sell investments, mortgages and pensions live in the rest of the UK; of the 200,000 pensions sold by Scottish firms last year, just 20,000 were sold to Scots.

As well as selling financial services to the rest of the UK, Scots customers choosing a mortgage, a pension or savings product have easy access to UK companies. This is an obvious benefit of sharing across the UK. For example, there are two million UK Isas located in Scotland.

In workplace pensions, the Institute of Chartered Accountants highlighted the fact that cross-border defined benefit company pension schemes must be fully funded. Given the total UK pension scheme shortfall currently stands at more than £177bn, the costs of doing business in a separate Scotland and UK suddenly just got much more expensive. 

The view of the SNP? An exemption for Scotland will be granted. Apparently the 28 members of the EU which have to follow the funding rules on cross-border schemes will look kindly on the nationalists’ request for special treatment.

Nor has the SNP got credible answers on how to replicate the sophisticated UK regulatory architecture which protects the pensions of Scots. 

The majority of Scots want the security and opportunity which being part of the UK-wide financial services market offers; the nationalists know this too, which is why they assert that Scotland can reject the UK yet retain membership of the UK’s single currency, single market and financial regulatory architecture.  This is hardly realistic. There is only one way for Scotland’s financial sector and consumers to maintain the advantages of the UK financial services system; to remain in the UK and say ‘no thanks to leaving’.

Gregg McClymont is the shadow pensions minister 

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