Scotland referendum document almost ready

The Scottish Government will put the "final touches" to the consultation document for its independence referendum later today, First Minister Alex Salmond has said.

Mr Salmond revealed the Scottish cabinet would discuss the proposals, which are to be published later this month, as he attacked Westminster's "interference" in the debate over Scotland's constitutional future.

The UK Government will set out plans today to give Holyrood temporary powers for a legally-binding referendum on Scottish independence.

Prime Minister David Cameron warned yesterday that uncertainty over the referendum was damaging the Scottish economy by creating uncertainty and deterring businesses from investing.

Downing Street said his comments were based on "feedback" from private conversations with business leaders, but declined to name the companies raising concerns.

Today, Mr Cameron's official spokesman pointed to an investment report published by financial services corporation Citigroup in November, which urged potential investors in Scotland's renewable energy industry to "exercise extreme caution in committing further capital to Scotland".

He added: "The report also warned that the referendum was likely to deter investment in Scotland.

"I don't want to get into individual businesses and private conversations, but there are people out there saying that this uncertainty is having an impact.

"Businesses do not like uncertainty, they do not invest when there is uncertainty, and clearly this issue is generating uncertainty."

The uncertainty caused by proposals for an independence referendum went beyond that resulting from a regular general election because it gave rise to "unanswered questions" over issues such as whether an independent Scotland would retain the pound as its currency and whether interest rates would be set by the Bank of England, he said.

"There are a lot of questions that would need to be answered about what independence looks like," said the spokesman.

"Those are questions for the Scottish Government, but you can see that, in the absence of answers to those questions, there is a great deal of uncertainty."

Scottish Secretary Michael Moore will tell MPs this afternoon that the Westminster coalition wants the vote to be held "sooner rather than later" but he will not set a previously expected deadline of 18 months on the vote, Government sources have confirmed.

The coalition is to publish its own proposals for a referendum in the next few days, alongside advice received by ministers on the legal implications of such a vote.

Mr Cameron insists the Government's plan would allow a "fair, legal and decisive" resolution to the uncertainty.

But his intervention was greeted with anger by the Scottish National Party (SNP) administration in Edinburgh, which accused London of trying to interfere in a matter which should be settled north of the border.

Today Mr Salmond - who stayed silent on the issue yesterday - accused the coalition Government of an "entirely unacceptable Tory attempt to impose London strings on Scotland's referendum".

The SNP leader said: "The UK Government is in a state of total confusion.

"Overnight, yesterday's 18-month sunset clause had disappeared into the sunset, the coalition is riven with tensions and Westminster is backtracking in the face of the massive thumbs-down from opinion in Scotland to Tory interference in the Scottish democratic process.

"The issue is the entirely unacceptable Tory attempt to impose London strings on Scotland's referendum, from a Westminster Government with absolutely no mandate for these matters."

He continued: "In stark contrast to Westminster's disarray, the Scottish Government will continue with the orderly process of bringing forward the referendum in the second half of this Parliament.

"This afternoon the Cabinet will put the final touches to a consultation document setting out the Scottish Government's detailed proposals for the referendum, which will be published later this month."

Mr Salmond is understood to favour a referendum in 2014 - possibly on the 700th anniversary of the Battle of Bannockburn - and wants to retain control over the wording of the question on the ballot paper.

The SNP administration has also not ruled out including a third "devo-max" option, which would see Scotland stay in the UK but gain more power over its own affairs, including greatly-enhanced financial powers.

Mr Cameron has denied he is trying to "dictate" the terms of the referendum from Westminster, insisting that it will be for people in Scotland to decide whether they stay in the Union.

"I want the United Kingdom to stay together," the PM told Sky News.

"It is a fantastically successful partnership. I think Scotland and England are better off in the United Kingdom.

"But we can't stand in the way of a part of the UK if it wants to ask the question 'Are we better off outside it?"'

Mr Cameron continued: "What I think the Scottish people deserve is a fair, clear and decisive question.

"We have to have legal clarity over who is responsible for this decision. Is it the Westminster Parliament or is it the Scottish Parliament? We will be setting out the legal position and trying to find a way through."

But a spokesman for Mr Salmond insisted that the "days of Westminster determining what happens in Scotland are over".

He added: "We'll bring forward our proposals, we'll stick to what we said we would do in the election."

During last year's election campaign, Mr Salmond had said a vote on independence would take place during the second half of Holyrood's five-year parliamentary term.

However, Mr Cameron has claimed the delay in resolving the independence issue was damaging to Scotland's economy.

He said: "If Alex Salmond wants a referendum on independence, why do we wait until 2014?

"This is very damaging for Scotland because all the time businesses are asking 'Is Scotland going to stay part of the UK? Are they going to stay together? Should I invest?'

"We are beginning to see companies asking those questions, so I think it is rational to put to the Scottish people, would it be better to have a more fair and decisive question put earlier?"

The SNP has denied the situation is having a negative impact on the economy, with a spokesman for the First Minister saying: "The damage to Scotland's economy is coming from the disastrous policies of the Tory/Lib Dem Westminster Government - which is why the UK Government should be amending the Scotland Bill to give the Scottish Parliament the economic and financial powers so that we can boost growth, recovery, and jobs."

He stated: "The reality is that businesses at home and abroad are voting with their feet with full confidence in Scotland's future by making huge investments.

"In recent months, Avaloq, Dell, Gamesa, Amazon, Doosan Power Systems and Michelin, to name just a few, have invested in Scotland - and, with the full financial and economic powers of independence, we can achieve even more."

PA