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Remaining in the Union is in best interests of Scotland

8 August 2014

A ‘Yes' vote for independence will break up the UK single market and in the short-term could leave Scottish businesses uncertain of their position in Europe, says the Business, Innovation and Skills Committee in a report published today. A protracted Scottish negotiation over EU membership, and the uncertain investment environment arising from a ‘Yes' vote, will have a damaging impact on businesses in Scotland, as well as other parts of the UK, says the BIS Select Committee.

The Committee raises serious concerns that a ‘Yes' vote may also leave Scotland facing a currency ‘limbo' and in the short term unable to join a sterling currency union and without the prospect of adopting the Euro. The Committee also finds the Scottish Government's stated intention to re-nationalise the Royal Mail upon achieving independence is an un-costed aspiration, bereft of any detail of how it is to be paid for or how it would be done. The Committee also fears for the future of the Universal Postal Obligation in an independent Scotland with its continued survival likely to be secured only at significant additional cost, either to the taxpayer or to the consumer.

On higher education, the Committee explored the topics of student fees and UK research collaboration, both of which will be significantly impacted by ‘yes' vote. The Committee found the a central plank of the Scottish Government's HE policy to, under an independent Scotland, charge tuition fees to students from other parts of the UK was likely to be illegal under EU law. The Committee also expressed concerns this policy would result in Scottish universities facing a financial shortfall, given the significant income currently received for non-domiciled UK students.

Adrian Bailey MP, Chair BIS Committee, said

"Scottish people and Scottish businesses make a tremendous contribution to the UK economy. Scotland benefits too; the rest of the UK is, by far, Scotland's biggest economic partner and there is genuine and deep concern about the threat to future prosperity of Scotland raised by the prospect of ‘yes' vote.  Arguments based on aspiration rather than reality do little to advance the cause of Scotland and it is clear to our Committee that the Scottish Government has failed to make the argument that Scotland would be better off economically as a separate state.

On big questions, such as the issue of a future currency, it's time for the Scottish Government to come clean and lay out the detail. It's no longer tenable for the Scottish Government to assert an independent Scotland will retain the pound when a sterling currency union is firmly off-the-table. The Scottish Government must play fair with Scottish businesses, investors, and voters and set out its plans for an alternative currency for an independent Scotland.

The forthcoming referendum on Scottish Independence has an impact not just on Scottish businesses and citizens but on all UK citizens and businesses. There is no certainty that breaking up the UK single market will bring economic benefits and our Committee believes that remaining in the Union is in the best economic interests of Scotland."

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