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Treasury chief secretary warns of risk to Scottish pensions

A yes vote for Scottish independence will result in households paying more for pensions and other financial products, Treasury chief secretary Danny Alexander will say in a speech in Edinburgh today.

The Financial Times reports Alexander’s speech will be used to reinforce the financial arguments for voting against Scottish independence in September, including a warning on uncertainty around currency, rates and regulation.

The Scottish government intends to try to continue to share the UK Pension Protection Fund, which compensates those whose pension schemes are linked to firms which have become insolvent, although it also set out the possibility of a separate Scottish PPF if required. 

Alexander will say that Scottish firms will not be able to use the PPF in the event of a yes vote.

He will add: “Creating an international border would reduce financial firms’ ability to spread risk and drive up the cost of financial products like pensions.”

In January, BoE governor Mark Carney said an independent Scotland could not keep the pound and be free to set its own taxes. Last month the Treasury backed this assertion.

Though the Scottish government’s fiscal commission working group has spoken out against the rejection of a formal currency union, Alexander will today dismiss any possibility that the Treasury would rethink its stance.

Alexander will say: “Our decision, taken in the best interests of Scotland and the rest of the UK, is final. No ifs; no buts.”

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