Independence referendum: the positive case for the UK
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
20 facts from the Scotland Analysis Programme which highlight the benefits for Scotland of being part of the United Kingdom.
The Scottish independence referendum is one of the most important decision points in Scottish history. The Scotland Analysis programme is designed to inform the debate ahead of the referendum with crucial facts and wider analysis. Eight papers have already been published with more in the pipeline.
Here’s a snapshot of the story so far:
- As part of the UK we keep the strongest currency option – the UK pound.
- Financial services companies can be headquartered in Scotland and enjoy access to large UK market and one set of UK rules.
- Safer banks with the whole of the UK standing behind them.
- Greater financial protection for savers and pensioners (FSCS).
- The UK’s £860m cyber security programme protects online shopping, banking and business.
- More competition in the larger UK means cheaper mortgages and insurance.
- More spending per person in Scotland.
- We share the cost of expensive and vital communications networks like UK broadband and the UK postal service.
- A true domestic UK single market has no barriers with added bureaucracy or costs to hamper Scottish business.
- With 60m people in the UK we share risks and spread costs.
- We have highly skilled and integrated armed forces with one of the largest defence budgets in the world.
- The UK uses our international influence to make a positive difference through alliances and relationships.
- UK makes a vital contribution to humanitarian operations around the world.
- Fiscal-revenue stream is steady, not volatile.
- In MI5, MI6 and GCHQ we have world class security and intelligence services protecting everyone in the UK.
- The single UK labour market means workers can move freely across the UK.
- 200+ UK institutions, like the BBC and the Met Office, serve all of the UK and don’t have to be replaced.
- A strong research base supported by shared infrastructure.
- Highly skilled defence sector protects and creates quality jobs in Scotland.
- Devolution offers the best of both worlds.
As part of the UK we keep the strongest currency option – the UK pound.
The currency arrangements we have at the moment are the best for Scotland and the UK; none of the alternatives are as good. Staying in the UK guarantees keeping the UK pound in a currency union; leaving the UK doesn’t.
Financial services companies can be headquartered in Scotland and enjoy access to large UK market and one set of UK rules.
As part of the UK, Scotland is able to maintain a large banking sector, headquartered in and operating out of Scotland. The risks that the sector poses are mitigated by the fact that there is a single framework across the UK for addressing financial stability risks whether they arise in Scotland or elsewhere in UK.
Safer banks with the whole of the UK standing behind them.
The size of the UK economy relative to its financial sector means that even if a very large firm fails, the UK Government can intervene to protect consumers and businesses.
Greater financial protection for savers and pensioners (FSCS).
The UK’s Financial Services Compensation Scheme can pool risks and guarantee consumer deposits in a UK bank up to £85,000.
The UK’s £860m cyber security programme protects online shopping, banking and business.
The UK benefits from a common approach to cyber security which defends against hostile attacks on UK cyberspace, one of the highest risks to the UK. The UK’s cyber security programme enables large scale investment in cyber security for the benefit of the whole UK.
More competition in the larger UK means cheaper mortgages and insurance.
At the moment, it is easy for firms based in Scotland to enter the market in the rest of the UK, and vice versa. It would be more difficult for firms to do this if Scotland became independent. A potential impact of firms withdrawing from the Scottish market would be less competition, meaning Scottish consumers would have less choice in financial services and products. Assuming that demand remains constant, a reduction in supply would lead to products becoming more expensive or of lower quality.
More spending per person in Scotland.
Government spending per person in Scotland is £1,364 higher than the UK average.
We share the cost of expensive and vital communications networks like UK broadband and the UK postal service.
The UK’s shared communication network connects individuals and businesses across all parts of the UK. The UK’s universal postal service, enshrined in law, provides the same standards of service across the UK despite the varying costs of providing such a service, particularly in rural areas. On broadband, Scotland gets one-fifth of UK rural broadband funding – over £100 million of a UK-wide budget of £530 million, more than our population share of the UK pot.
A true domestic UK single market has no barriers with added bureaucracy or costs to hamper Scottish business.
With free movement of goods, services, capital and people, the UK single market benefits businesses and consumers. This arrangement maximises job creation and flexibility.
Businesses benefit from access to a large domestic market and consumers benefit from a greater number of goods and services at lower prices. In 2011, Scotland sold £45.4bn of goods and services to the rest of the UK – double the level of exports to the rest of the world and four times as much as to the rest of the EU.
Having 60m people in the UK means we share risks and spread costs.
A large and diversified tax base allows all parts of the UK to pool risks such as volatile tax revenues and to borrow at a lower cost to maintain public services. By spending taxpayers’ money on a UK-wide basis for certain services, the UK limits public costs through economies of scale (for example, in defence, tax collection and overseas representation), while also supporting integration in the domestic market (for example, through unified social security and common regulators).
We have highly skilled and integrated armed forces with one of the largest defence budgets in the world.
We benefit from the 4th largest defence budget in world of around £34 billion a year, through the large defence presence in Scotland and a united fighting force which protects Scotland as part of the UK.
The UK uses our international influence to make a positive difference through alliances and relationships.
We have a world-class diplomatic network representing and helping the people of Scotland around the globe. The UK has 14,000 staff in 270 Embassies, High Commissions and Consulates in over 150 countries, promoting trade and Scottish interests as part of the UK.
UK makes a vital contribution to humanitarian operations around the world.
Scotland is part of a United Kingdom that is a world leader in overseas development working directly in 28 countries across Africa, Asia and the Middle East. The UK has a leading role in global humanitarian emergencies, thanks to our military capabilities combined with goodwill, and is currently responding to Typhoon Haiyan in the Philippines. Scotland is part of a UK that has already pledged more than £50 million in humanitarian support. The UK is meeting its commitment to reach 0.7% in 2013. In doing so, we will become the first G8 country to reach this target.
Fiscal-revenue stream is steady, not volatile.
The UK’s ability to share risks and pool resources has meant public spending per person in Scotland has been around 10% higher than the UK average since devolution. Pooling fiscal resources and sharing risks is the best way to manage volatile sources of revenue, such as North Sea oil and gas.
In MI5, MI6 and GCHQ we have world class security and intelligence services protecting everyone in the UK.
The UK’s intelligence agencies help protect the whole of the UK from threats such as terrorism and espionage, which means Scotland benefits from its expertise, capabilities and resources, as well as making a valued contribution.
The single UK labour market means workers can move freely across the UK.
Being part of the UK allows around 30,000 people to travel between Scotland and the UK each day to work. The lack of barriers to where people work makes it easier for people to find jobs that best match their skills and aspirations.
200+ UK institutions, like the BBC and the Met Office, serve all of the UK and don’t have to be replaced.
Around 490,000 staff are employed in over 230 UK central government organisations. Over 140 of these UK organisations perform functions for Scotland. This includes bodies that oversee important activities for the whole of the UK, from the Bank of England, Ministry of Defence as well as bodies that regulate communications, energy companies and railways and promote the UK abroad.
A strong research base supported by shared infrastructure.
Scotland’s excellent research base secures a greater proportion of UK Research Council funding than its UK population share. Scotland secured 13.1% of the pot in 2012-13. The UK’s highly integrated domestic environment for research supports the flow of funding, people and knowledge.
Highly skilled defence sector protects and creates quality jobs in Scotland.
The defence sector is an important part of Scotland’s industry, employing over 12,600 people. Scotland benefits from every pound spent on UK defence and the UK defence budget is one of the largest in the world.
Devolution offers the best of both worlds
Having a strong, flexible Parliament in Edinburgh coupled with the strength and safety of the wider UK is the best balance for Scotland, and one which the majority of people in the country support.