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11 September 2014

Alex Salmond's Independence Bandwagon Stalls On His 'Black Wednesday'



A new opinion poll gives the Unionist campaign a six-point lead as the Bank of England's Governor warns a separate Scotland faces billions of pounds of spending cuts or tax rises



By Simon Johnson, Steven Swinford, Peter Dominiczak and Christopher Hope

Alex Salmond’s independence bandwagon has been stalled as a new opinion poll gave the Unionist campaign a six-point lead and the grim economic reality of leaving the UK started to emerge. 

At the end of a day of political drama, a survey of 1,000 Scots was published showing 53 per cent rejected independence and 47 per cent were in favour when undecided voters were excluded.

The six-point margin was the same that pollster Survation recorded two months ago, prompting an immediate jump in the value of the pound on the money markets and suggesting the Yes campaign may have peaked too early with a week to go until the referendum. 

The Unionist fight back will gain momentum on Thursday as 100 English and Welsh Labour MPs arrive in Glasgow, before fanning out across Scotland to join an unprecedented ground campaign.


 Scotland's First Minister Alex Salmond is welcomed by a pro independence voter during a Yes rally in east Edinburgh, Scotland, 10 September 2014. The three main British political parties put on a rare show of unity to back a plan to transfer new powers to Scotland should it reject independence in the 18 September 2014 vote

Alex Salmond's blasé attitude to the consequences of an independent Scotland reneging on its debts is breathtaking: “What will they do?” he reportedly asked. “Invade?”  Photo: EPA


The survey was published in the Daily Record as Mr Salmond yesterday endured his own "Black Wednesday", with some of Scotland's biggest companies warning against the dangers of separation and the Bank of England indicating he faces a £145 billion hole in his plans to keep the pound. 

It emerged that both Lloyds and RBS have contingency plans to leave Scotland in the event of a Yes vote.

Lloyds has confirmed that it will move its headquarters to London, while Treasury sources said that RBS have “similar plans”. 



Standard Life, the pensions giant, revealed it is planning to move part of its business to England to protect its customers in the event of an independence vote, while BP and Shell backed expert predictions that oil will have all but run out by 2050.

It also emerged nearly $2 billion (£1.24 billion) has flowed out of UK equity funds in the last two months amid heightened uncertainty over what separation would mean for the economy. 

Speaking in Edinburgh, an emotional David Cameron appeared to close to tears at one point as he appealed to Labour voters not to back independence just to give the “effing Tories a kicking”.

Ed Miliband echoed this message in the key battleground of Glasgow and disclosed he had cleared his diary to stay in Scotland as the pro-UK Better Together campaign made a desperate attempt to reverse the Nationalists’ momentum. 




Alex Salmond denied the poll showed the separatists had peaked too early, saying the Unionists would throw “the kitchen sink and most of the living room” at the campaign over the next week but Scots were no longer receptive to their “scaremongering.”

The pro-UK Better Together campaign predicted the contest would still “go right down to the wire” but Danny Alexander compared Mr Salmond's economic problems with Black Wednesday, when Britain crashed out of the European Exchange Rate Mechanism in 1990 sending interest rates soaring. 

The Chief Secretary to the Treasury said: “This is the day the economic case for separation died and reality that independence will cost jobs, investment, and growth dawned.”


 


With the race tightening and just a week to go, observers had widely expected the poll to show a lead for the Yes campaign as Survation has consistently put Yes support higher than other pollsters. 

But the survey of 1,000 Scots showed 47.6 per cent plan to vote No, with 42.4 per cent backing separation and the remaining 10 per cent undecided.

It was conducted between Friday and yesterday, after previous opinion polls disclosed there had been a surge in support for Yes and the contest was on a knife edge. 




The poll showed Scottish men are almost exactly evenly split on independence, with 46.4 per cent planning to vote Yes and 46.8 per cent voting No. However, 48.5 per cent of women intend to reject separation and only 38.6 per cent support it.

It showed more Scots aged below 35 and over 55 opposed separation than supported it, with the intervening age group backing independence. 

The poll was published as Mark Carney, the Governor of the Bank of England, said that an independent Scotland could have to build up to huge cash reserves to ensure it is in a position to bail out its banks.

Mr Salmond has suggested Scotland keep using the pound unilaterally, in the same way countries like Panama adopt the US dollar, after the three UK parties rejected a eurozone-style deal to share the pound. 




But Mr Carney said that, in the absence of the Bank of England, Scotland would have to build up huge reserves of sterling to stand behind its large banking sector.

He warned that Mr Salmond would have to slash public spending or raise taxes to plug the gap and prevent major financial institutions from leaving Scotland and basing themselves elsewhere. 

In an appearance before the Treasury select committee, Mr Carney suggested that Scotland will inherit £15 billion in cash reserves on leaving the Union. However, he said that would fall far short of the typical levels needed by other countries that have adopted foreign currencies.

He said that countries aspiring to join the Eurozone require reserves worth 25 per cent of their GDP, while countries with more "sophisticated" financial systems such as Hong Kong have cash reserves worth 110 per cent of their GDP. 

Scotland would need to raise up to £145 billion to bring its reserve levels in line with those of Hong Kong.

Earlier in the day, Standard Life, which employs 5,000 people in Scotland but has 90 per cent of its customers south of the Border, said it would examine moving its pensions, savings and investment operations to England. 

The company, which has been headquartered in Edinburgh for its 189 – year history, said it needed to ensure its customers were subject to UK tax law and regulation.

BP formally came out against Scottish independence and Bob Dudley, its chief executive, backed warnings by Sir Ian Wood, the oil industry’s most eminent businessman, that Alex Salmond’s economic case for separation relies on highly inflated estimates for North Sea tax revenue. 

Ben van Beurden, Shell’s chief executive, also backed the assessment published by Sir Ian, who warned that Scottish voters were using their hearts rather than their heads in the independence debate and urged them to re-examine the economic case.

However, Mr Salmond insisted Sir Ian was wrong and Standard Life was bluffing.


 



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