In February, George Osborne ruled out a currency union with an independent Scotland with the words: “If Scotland walks away from the UK, it walks away from the UK pound.”
The Chancellor’s unbending stance also has the backing of Labour and the Liberal Democrats.
However, the Yes campaign insists that an independent Scotland would keep the pound and has dismissed Westminster’s rhetoric as scaremongering campaign tactics.
An unnamed UK Government minister has been quoted as saying that a currency union would probably form part of a “highly complex series of negotiations” between Westminster and Edinburgh in the event of a Yes vote, while the Governor of the Bank of England, Mark Carney, has said he would be prepared to hold talks on the subject.
The most likely scenario is that such negotiations will occur – but Alex Salmond may have to offer something in return for getting the currency he wants, such as retreating on his pledge to cut corporation tax for Scottish-based businesses.
Employment and welfare
According to the white paper Scotland’s Future, many of the UK Coalition Government’s key welfare policies – such as the bedroom tax and Universal Credit – would be abolished post-independence.
Supporters of the Yes campaign point to the fact that 90 per cent of Scottish MPs voted against the introduction of the bedroom tax as a sign that the country should set its own welfare policies.
Alex Salmond has said that independence would create a boom in jobs in Scotland, fuelled by a cut in corporation tax that would allow cities north of the border to compete with London. Even a 1 per cent increase in productivity could create 23,000 new jobs in the long term, he has said.
However, some industries have claimed that independence would provoke a jobs exodus. The British Defence Minister Philip Hammond has said that thousands of jobs at military bases would be at risk after a Yes vote, concerns echoed by defence firm BAE Systems.
The Centre for Economics and Business Research, meanwhile, has warned that between 20,000 and 40,000 jobs in the financial services sector will move to England if Scotland breaks away.
The Yes campaign has said that all state and public sector pensions in an independent Scotland will continue to be paid as before. But Gordon Brown warned in April that since the number of Scottish pensioners is expected to rise by 300,000 in the next two decades (faster than the rest of the UK), a future independent administration could find itself struggling to pay the higher bill.
In its white paper, the Scottish government said the state pension age would rise to 66 in 2020 in line with the rest of the United Kingdom, after which time an independent commission would be appointed to examine the issue.
How private sector pensions would adapt is less clear. The Yes campaign say there would be little change as they are “a private matter between individuals and their pension providers”, but the Institute of Chartered Accountants of Scotland has expressed concerns that there is no certain plan for how they would be managed under a new Scottish regulator.
Various big companies have voiced opinions about Scottish independence, most notably Standard Life, which said in February it had drawn up contingency plans to leave the country post-independence if necessary.
Lloyds Banking Group has also said it may have to move its registered offices to London in the wake of a Yes vote, while the heads of energy companies BP and Shell have also voiced concerns.
However, most companies have either chosen to remain neutral on the subject or say they cannot predict what affect it will have – while others are pro-independence for specific reasons. Ryanair and British Airways are positive about proposed cuts in Air Passenger Duty in an independent Scotland, for example.
Credit ratings agencies such as Standard and Poor’s and Moody’s have predicted that Scotland’s economy would run the risk of being downgraded immediately after independence, but that it could attain higher ratings further down the line.