Edinburgh has a globally respected and hugely valuable financial services sector that, along with associated professional services, provides employment for more than 50,000 people living in and around the Capital.
Household names such as Standard Life, Scottish Widows and Tesco Bank all call the city their home. Many more multinational companies such as BlackRock and Société Générale have established a presence here.
The strength of Edinburgh’s financial services sector is testament to the skills of our people, but it is also testament to Scotland’s place within the UK – an issue of vital importance given the decision we will take next September on whether to remain part of the UK, or to go our separate way.
Yesterday, the UK government published the third paper in its Scotland Analysis series, setting out the facts to ensure we have a properly informed debate.
The paper sets out how being part of the UK helps to support the sector here in Edinburgh and the rest of Scotland.
Crucially, we all share the same internationally respected UK-wide tax and regulatory system, around which so many of our financial services products are designed. That means the companies that sell these products, operating under a single UK regulator, can design them for the whole of the UK market of more than 60 million people, and benefit from the cheaper borrowing that the market extends to UK firms. That improves choice and value for us all.
Take the 91 per cent of Scottish pension firms’ customers who live outside Scotland. If someone living in Penzance wants to buy a pension from major Edinburgh-headquartered companies such as Standard Life or Aegon, they can do so without worrying about whether they are designed specifically for English tax and regulatory systems. Such concerns don’t even make sense under the current system. Similar benefits arise in respect of a host of other products, including ISAs, life insurance and mortgages.
If we were to create an international border in the middle of this market, there would have to be separate tax and regulatory systems, one for the UK and one for a new Scottish state.
Banks and life and pensions companies would have to redesign their UK-wide products so that they were tailored to these separate systems – introducing more cost and complexity, which would ultimately be borne by the consumer.
Our paper makes clear that, as a result, companies based in Edinburgh and the rest of Scotland would face difficult decisions around where to locate themselves in the event of independence. Either they would have to live with the consequences I have outlined above, or they would have to relocate, taking with them valuable jobs and damaging the global reputation of the Scottish sector.
These are issues that matter not just to those who work in this important sector. They matter to each and every one of us in Scotland and they demonstrate why we are, without doubt, better together.
Michael Moore MP is Secretary of State for Scotland