That referendum: boring but important..........

The referendum campaign must be the longest attempted suicide in history. Fortunately we have only a few more tedious days to discover whether Scotland succeeds in topping itself.

 

There will be no need to wait until 2016 to discover the true consequences. They are showing up right now.

 

Capital flight is a real and present danger, especially with business that has significant exposure to both Scotland and England. Many firms plan to move to England entirely; others to increase their presence south of the border. Standard Life and Lloyds/BOS have contingency plans to move to London. EU rules specifying that a bank must have it HQ in the country of its core business may cause an exodus. Money has started to move out of Scottish banks.

 

A major Scottish service industry is insurance. The Scots invented life assurance when Scottish Widows was founded in the 18^th Century to provide for the relics of the clergy. Some of the largest pension funds are based in Edinburgh. It is a fair prediction that the flow of pension money will begin to dry up; investors will not want their funds to be in a foreign country in a foreign currency.

 

And it must be appreciated that it will take years to get a complete break. After a ‘yes’ vote, everything will be on the table, from the currency to nuclear weapons. The negotiations will be nasty, brutish and long. Until the currency central/bank issue is sorted out, Scotland will be in financial limbo. It will be a drawn-out process for Scotland to transfer power from London to Brussels. It is far from certain whether its bid to subject itself to the EU will avoid vetoes by the numerous member-states to which secession is anathema.

 

And finally……….

 

The former Chairman of RBS at the time the world’s biggest bank had to be bailed out by the (mostly) English taxpayer, has come out on the side of Wee Eck. Neck doesn’t come much more brassy than that!