APPENDIX 3: CALL FOR EVIDENCE
As announced in its press release of 15 February,
the Economic Affairs Committee has decided to conduct an inquiry
into The Economic Implications for the United Kingdom of Scottish
Independence. The Committee welcomes written evidence on any
or all of the issues set out below, or on any other relevant aspects,
by 11 June.
The Scottish Government aims to hold a referendum
on independence in the autumn of 2014. The Committee's inquiry
will assess the economic implications of Scottish independence
for all of the United Kingdom—England, Wales and Northern
Ireland as well as Scotland—recognising that these will
also differ across regions, especially the North of England.
The inquiry will seek to answer questions such as:
(1) Division of the UK's public assets, liabilities
and expenditure
(a) How should the UK's public assets and liabilities,
from national debt and reserves to public pensions, North Sea
oil and bank exposures be divided if Scotland becomes independent?
(b) How would the UK's joint public expenditure
flows, including social security, the Barnett formula transfers
and defence spending be affected by Scottish independence?
(2) Currency, monetary policy and central banking
(a) What are the implications of Scottish independence
for the operation of the Bank of England? If sterling continues
to be used in Scotland, would the Bank of England be required
to take into account Scotland's economic conditions in setting
monetary policy?
(b) What would be the implications for the stability
of the UK's financial system, and the financial system of Scotland,
of Scotland becoming independent and retaining sterling as its
currency? Would a Scottish monetary authority offer lender of
last resort facilities and how would financial institutions respond?
What would be the implications of possibly different regulatory
regimes in an independent Scotland and rest of the UK?
(c) What would be the implications for Scotland
and the rest of the UK if an independent Scotland switched to
the euro?
(d) Could an independent Scotland have its own
national currency? What would be the practical consequences if
it did?
(3) Fiscal policy and taxation
(a) What would be the fiscal consequences for
other parts of the UK of an independent Scotland?
(b) What would be the effects on other parts
of the UK and on Scotland of an independent Scotland introducing
different tax rates? How would businesses and households respond?
What are the implications for the UK's and an independent Scotland's
tax base?
(c) What would be the impact on the rest of the
UK's debt if an independent Scotland issuing debt were to face
a sovereign debt crisis? Would the spill-over between the rest
of the UK and an independent Scotland require fiscal rules to
limit risk exposure? Would they work?
(4) Economic structures, cycles and flexibility
(a) Would the economies of the rest of the UK
and an independent Scotland be likely to diverge or remain similar?
If diverge, how would this affect the rest of the UK? Would economic
cycles converge or diverge and what would be the consequences?
(b) Would independence for Scotland affect its
trade / current account balance with the rest of the UK? What
would be the consequences? Could non-tariff trade barriers emerge
over time?
(c) Would there be more movement of large company/financial
institution headquarters from/to an independent Scotland and the
rest of the UK? Would Scottish independence have any impact on
labour markets across the UK?
(d) What would be the impact on other parts of
the UK if an independent Scotland were not flexible enough to
respond to an economic shock? Does the rest of the UK adjust more
or less rapidly to shocks than Scotland?
(5) Lessons from other countries
(a) Are there lessons from the experience of
previous separations, such as Irish independence in 1922 and the
break-up of Czechoslovakia in 1992, or where separation has been
advocated, as in Spain and Canada?
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