Sunday, October 19, 2008

Crunch has put paid to Scottish independence

Around Alex Salmond, and his party's flagship policy, lies the wreckage of Scotland's independent banking sector, the very symbol of his future hopes for a robust economy. Worse, the two main Scottish banks have been saved from collapse by a Westminster Government, drawing on the resources of the United Kingdom's taxpayers. They are now British, not Scottish banks and their future strategy will be determined from the City of London not Edinburgh.

Whether you are one of the 40,000 employees of RBS and HBOS in Scotland, or work for the thousands of companies that rely on the banks' investments, or are part of the sprawling public sector drawing on Scottish bank loans, or enjoy the lucrative sponsorship that keeps the cultural life of the nation afloat, now is the time to consider how you would have fared in an independent Scotland.

Where would that rescue fund,its value estimated at about £100 billion - the equivalent of Scotland's entire GDP - have come from? Would Scotland, as Mr Salmond claims, have had the resources, like Norway, to rescue its own banking system? Or would it, perhaps, have found its exposure more like that of Iceland, a nation facing the prospect of bankruptcy?

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