Michael Moore – 2013 Speech at Fife Chambers of Commerce

Below is the text of the speech made by the then Secretary of State of Scotland, Michael Moore, at the Fife Chambers of Commerce on 31st July 2013.

The Chambers of Commerce network right across the United Kingdom plays a vital role in growing British businesses.

I know that the network here in Fife is central to ensuring that the area attracts and supports its local businesses.

It’s a great opportunity for me to be able to talk with you about the measures we are taking to support our economy, and the future that we want to see for you and your businesses in the years ahead.


There is no doubt that the last few years have been a real challenge for us all: for individuals, for families and for businesses.

We have experienced an unprecedented global financial crisis; the UK’s largest ever peacetime deficit; and a series of external shocks, both in the euro area and to commodity prices, that have continued to make our recovery a challenge.

Returning the whole of the UK to sustainable and balanced growth was the unifying objective for the two parties who came together in the national interest to form our Coalition Government.

We remain fully focussed on delivering that.

By reducing the deficit, restoring stability and rebalancing the economy we want to equip the UK to compete in the global race.

Recent news has shown that the economy is on the mend and moving from the rescue phase to recovery.

Last week’s UK GDP figures showing 0.6% growth in the three months to June were encouraging – above forecast and double the rate of the first quarter.

We have made substantial progress in our plan to cut the deficit, reduced by a third as a percentage of GDP since we came to power.

And we have seen significant progress over the past year in job creation and reducing unemployment.

To continue to make progress, the UK Government is ensuring the right business environment is in place for you, and for the families and communities who depend on you for their livelihoods.

We are supporting the recovery, reducing taxes remains an important priority – in particular by cutting the main rate of corporation tax to 20%.

This is helping to deliver on our objective of making the UK’s tax system the most competitive in the G20.

But tax reform is only part of the story.

It sits alongside the Bank of England’s monetary activism of recent years and our programme of financial sector reform, particularly of the banks, as key components of fixing the economy.

And we are determined to invest in our future, too.

I’ve already mentioned the UK Government’s support for the Queensferry Crossing, a less prosaic name than the previous working title of ‘the Forth Replacement Crossing’.

And the Queen Elizabeth class carriers, too. These are important parts of our investment programme.

But we have also provided over 1.7 billion pounds of additional capital spending power to the Scottish Government since the Spending Review of 2010.

It is for the Scottish Government to invest that money as it sees fit – including in the ‘shovel ready’ projects it has been so keen to promote.

Where responsibility sits with the UK Government, we are working hard to improve Scotland’s infrastructure links with the rest of the UK and to get the construction sector moving again.

In the housing sector, we are introducing the Help to Buy Mortgage Guarantee Scheme, which will offer up to 12 billion of Government guarantees to lenders who provide mortgages to people with a deposit value of between 5 and 20 per cent.

Helping to make more high loan-to-value mortgages available to potential home-owners who can’t save for the large deposits needed following the financial crisis.

And we have set out a clear industrial strategy to ensure that Government is working with the experts in our key industries: such as construction, renewable, oil and gas and life sciences.

We know that you – and businesses like you, right across the United Kingdom – have been working hard to do your bit too. We need to keep working together to ensure that the economic recovery gathers strength and is sustained – we are not complacent about the challenges that remain.

The Future of Scotland

In this environment I know that right now all of you remain focussed on addressing the challenges we face day to day.

But aside from that, I know that the next issue on everyone’s minds is ‘what future will Scotland choose in the referendum next year?’

It’s just over 400 days until those of us living here in Scotland will make our biggest ever collective decision.

It will be a big, bold moment.

Offering us the choice between staying within the most successful partnership of nations the world has seen, or an irreversible decision to leave the United Kingdom and go our own, separate way.

To my mind it will come down to one simple question: which of the alternatives is better for me, my family, and my country?

For me the answer to that is absolutely clear.

As a proud Scot I believe that we can enjoy a better future as a nation if we remain within the United Kingdom family.

With a strong Scottish Parliament and a strong voice in the UK Parliament giving us the best of both worlds

It is clear to me that, as Scots, being part of the United Kingdom gives us greater opportunities; greater security and an unrivalled platform on the world stage.

And I believe all that is worth keeping.

If you focus in on the economy, which I am sure will dominate your thinking, the argument for staying in the UK is a powerful one.

As part of the world’s sixth largest economy, Scotland has strength in numbers – our 5 million people have unfettered access to a highly integrated single market across the UK.

More than 300,000 Scottish businesses can sell goods and services in a domestic market of more than 60 million people.

And enjoy support from an unparalleled network of embassies and consulates boosting their trade around the world and creating thousands of jobs at home.

We have seen for ourselves the ability of the UK economy to absorb huge financial shocks like the banking crisis which devastated our two largest Scottish banks.

And, as has been debated at length – as part of the UK we have certainty about our shared currency.

Over the last decade and a half we have created a devolution settlement which maintains these inherent advantages of the UK, while developing our decision making here at home at the Scottish Parliament.

Since the landmark creation of the Parliament at Holyrood we have seen it anchored in Scottish public life and seen its powers enhanced – significantly by the Scotland Act of last year which brings major tax and borrowing powers north of the border, in the biggest transfer of financial powers from London to Edinburgh since the Act of Union sent them the other way. But it’s not just by milestone Acts of Parliament that powers have been transferred.

We have seen flexible, responsive arrangements evolve that have allowed economically important powers like the management of our railways come north, while ensuring that when it makes sense to legislate on a pan-UK basis, as we have done in relation to tackling organised crime, we can still do it in Westminster with the consent of the Scottish Parliament.

This ‘best of both worlds’ approach is a real strength for us. And I believe the settlement will develop further.

For me as a Liberal Democrat, seeing the commitment to further devolution coming from all three parties who support Scotland staying within our United Kingdom is a real milestone in our country’s development.

But before we can take decisions on changes to our devolution settlement we need to take the most fundamental decision: are we in, or are we out?

Scotland Analysis Programme

As the UK Government, our proposition is clear: Scotland should remain the integral part of the United Kingdom that it is, and has been for over the last 300 years.

That is why over the last six months we have set out in great detail on fundamental economic questions what Scotland has as part of the UK and what all of us need to weigh up as we consider our vote.

I recognise that before many people can make their choice they want information, and they want to hear the case for each option.

So far we’ve published four papers in our Scotland Analysis Programme, amounting to over 460 pages of argument and data.

I’ll admit the title isn’t all that catchy – but it reflects a really important point about the way we are approaching this debate.

Analysis. We are doing the homework,

We are examining the evidence

And we are setting out the facts.

Our first paper sets out the legal position of Scotland within the United Kingdom – and the legal realities of becoming a separate independent state.

Because it’s important for us all to be clear that independence means Scotland leaving the United Kingdom.

And leaving the United Kingdom, means leaving the state that we have built together, with our fellow citizens who live in England, Wales and Northern Ireland.

It means there are no guarantees that an independent Scotland would be a member of international organisations like the EU, NATO, G8 and G20.

A separate Scottish state would need to apply to join these organisations.

For the UN that could be a relatively simple process, but it’s a process that a newly independent state would have to go through none the less.

For other organisations there are detailed negotiations that would be required before an independent Scotland could be a member.

For the EU that would mean a newly independent Scotland negotiating with 28 existing Member States.

Simultaneously asking for fast-tracked membership, but also apparently expecting favourable terms:

An exemption from the euro;

An opt-out from the Schengen Agreement for the free movement of people; and

An agreement on Scotland’s contribution to the EU budget having left the UK’s rebate behind.

But it is not just the international implications of leaving the United Kingdom that need to be considered.

Our second paper in the Scotland analysis series examined in detail the currency arrangement we have, right now, as part of the United Kingdom, and the options that would be open to an independent Scottish state.

All of the options:

Seeking a formal currency union with the continuing UK state;

Using sterling outside of the UK, like the Isle of Man;

Adopting the Euro;

Or a separate Scottish currency altogether.

None of these options is the same as the shared currency we have now.

All are sub-optimal – for Scots and Scottish businesses and for the rest of the UK – to the current system we have of a shared pound sterling and a shared Bank of England.

And as the Chancellor made clear when he launched our currency paper, it is ‘unlikely’ that the continuing UK would choose to have a formal currency union with a separate Scottish state.

We’ve published a paper on our Financial Services sector

Setting out the importance of the sector to Scotland, where financial services contribute more than 8 per cent of Scottish GDP and support around 7 per cent of Scottish employment.

And the enormous benefit that this strong Scottish industry gets from being part of the UK financial sector, not least the support that the size and strength of the UK can provide in times of trouble.

We recently produced a fourth paper that examines the benefit of our shared single domestic market.

For whilst the border between England and Scotland means a great deal historically, it means nothing for our businesses large and small that operate across that border on a daily basis: Whether that be the 300,000 people that travel into or out of Scotland from the rest of the UK each day to work;

Or the lorries that transport goods to and from Scotland providing free unfettered access to a marketplace of 60 million rather than five;

Or the shared infrastructure we have like our broadband networks and energy markets.

Through our work to date, I believe we have established the key facts in the debate.

Independence would mean the end of devolution and Scotland leaving the UK, its institutions and its place in the world;

Independence would mean a fundamental change on currency;

A big change in regulation and the bodies we interact with every day

A big change for our position in Europe;

And – as we’ve seen reported extensively in recent days – some big challenges for our pensions.

Over the autumn period we will develop these and other arguments further.

The other side’s arguments

But we’ve not just been setting out our own case over the past six months.

We’ve been looking carefully at the arguments from the other side too.

We’ve looked carefully at the Scottish Government’s approach.

And you have to give them credit for some creative thinking about what independence means.

I have always taken it to mean a separate country making its way in the world, choosing new and different policy paths, which the proponents of independence have argued are necessary.

It’s that thirst for change, and recognition of the likely divergences, that lay behind the Chancellor’s thinking when he said that a currency union between the rest of the UK and Scotland was ‘unlikely’.

‘Unlikely’ because the simple truth is that, if we break up the United Kingdom, we will have turned our backs on our shared interests, so that we can instead develop separate interests.

And as everyone in business knows – you can get along very well;

You can be the best of neighbours;

But where you have separate interests you get divergence.

Doing things differently and creating differences is at the heart of separating Scotland from the rest of the UK.

It is the inherent logic of creating a separate Scottish state.

There is no hiding the upheaval independence would bring

Even if the advocates of independence spend rather a lot of time trying to assure us that all the good things we have as part of the United Kingdom can be maintained under independence – that there will be no change to speak of.

As I say, that’s a creative approach, but it doesn’t really add up, does it?

Those who advocate independence are surely not saying to people in Scotland – vote for independence to keep everything the same as it is now?

Indeed – even people in the yes camp are starting to question this vision of independence as a pale imitation of what they dream of.

And more to the point, it is something that the Scottish Government cannot faithfully promise or deliver. Common sense tells us that.

Looking at the detail of their work throws up more anomalies and contradictions.

We’ve looked at the work of the Scottish Government’s Fiscal Commission.

The Scottish Government like to highlight the Commission’s finding that keeping the pound would be the best starting point for an independent Scotland – but they refuse to set out their plan B or even what the long-term currency plan is.

Instead the Scottish Government say that they will unilaterally use sterling regardless – so called ‘sterlingisation’.

But if we then go back to their own Fiscal Commission report, those same economists pointed out the downsides of sterlingisation: no central bank or lender of last resort, no influence over monetary policy – in short this would be, in the Commission’s own words, ‘no long-term solution’.

Another group set up by the Scottish Government to review welfare made clear that it was given no guidance about the principles they should work from – so no plan for what the welfare system should look like in a separate Scottish state. And far from recommending radical change it proposed that an independent Scotland should keep the same system as we already have in the UK.

That’s the system that the Scottish Government like to say is flawed, but their own experts say should carry on under independence.

If we turn to look at one of the most fractious areas of debate, over the oil numbers, this is another area where the Scottish Government lauds the role of independent experts.

But when the independent experts in the Office for Budget Responsibility came up with figures, the Scottish Government didn’t like they cherry-picked the highest, most favourable figures to base their public arguments on.

Something their own Fiscal Commission warned against doing.

But of course we know from the leaked Scottish Government Cabinet paper that in private they are rather closer to our position on oil numbers and future spending than they care to admit in public.

In private they say that, quote, ‘there is a high degree of uncertainty around future North Sea revenues’… and

‘that Scotland would have a larger net fiscal deficit than the UK’

They also acknowledge, and I quote again, that ‘at present HMT and DWP absorb the risk…in future we will assume responsibility for managing such pressure. This will imply more volatility in overall spending than at present.’

I think that is a fair assessment by Scottish Government ministers – it’s just a shame they won’t face up to it in public.

Concluding remarks

I gave a speech at the start of 2013 saying that I wanted this to be the year we moved from process to substance in the independence debate.

That 2013 had to be the year of evidence and not assertion.

And that is exactly what we, as the UK Government, have done and will continue to do.

We are setting out the benefits we continue to enjoy and the contribution we have made working together for the last 300 years.

And we are setting out the opportunities and prospects that lie ahead if we choose to remain part of the United Kingdom family.

Our Scotland analysis papers are setting out the analysis and facts.

Together they make the positive case for Scotland within the United Kingdom.

We strongly and passionately believe that Scotland is better, safer and stronger within our United Kingdom.

That’s our case.

We don’t shy away from that – we don’t pretend to be arguing for anything else: we are making the case that we believe in, and we are making it clearly.

And that’s what I am going to be doing throughout the Summer – to groups like yours – right across Scotland.

Making the case that I am proud of.

The case that I believe in.

Thank you for the opportunity to set it out to you here in Dunfermline today.

Michael Moore – 2013 Speech on Scotland’s Future

Below is the text of the speech made by the Secretary of State for Scotland, Michael Moore, in Edinburgh on 18th January 2013.

2013 is the year that the debate about Scotland’s future moves from process to substance. Many people – including some of you, I’m sure – feel that the process discussions have gone on for too long.

I share that frustration: I certainly want to get on to the real issues as soon as possible.

But it’s important that we recognise the centrality of getting the process right. On 15th October the Prime Minister and I signed what’s become known as “The Edinburgh Agreement”, along with the First Minister and Deputy First Minister. That Agreement saw both Governments commit to ensuring that there is a legal, fair and decisive referendum on Scotland’s place in the United Kingdom.

In December the Scottish Parliament backed this Agreement. And this week, both Houses in the UK Parliament gave their unanimous approval. There can now be a legal referendum. In recognition of the Scottish National Party’s election pledge to hold a referendum on independence, it will be the Scottish Parliament that sets out the detailed rules for that referendum. This will make sure that the “Made in Scotland” principle which lies at the heart of devolution also lies at the heart of this referendum.

The Referendum Bill is promised in March and will set out the question, the date, the franchise and the rules about how money is raised and spent during the campaign, in light of recommendations from the Electoral Commission. This is the body that has unparalleled expertise and unquestionable neutrality in these issues and whose recommendations aim to ensure an unbiased and impartial referendum process.

I am pleased that the Edinburgh Agreement commits the Scottish Government to hold the referendum according to the highest international standards. And I pleased that the crucial role of the Electoral Commission is now recognised by all. The referendum must be regarded as fair and reasonable: not only by those on the different sides of this passionate debate, but also by each and every person living in Scotland whose choice will determine our nation’s future.

This referendum is too important to get wrong. Too important to see either side accused of using the rules to gain political advantage.

When all the votes are counted, this must be a referendum result that is decisive and that is accepted by all. A referendum result that allows Scotland to move on.

The eyes of the world will now be on the Scottish Government as they bring forward their proposals and the Scottish Parliament will be responsible for scrutinising, challenging and approving the final legislation. That is a serious job. But I am confident that it will be fulfilled. All of us here will look to the Scottish Government and Scottish Parliament to act on behalf of all of us, irrespective of our views on Scotland’s future.

Some argue that the SNP’s dominance of the Parliament means they will simply railroad through a one-sided referendum process. But in the referenda established by the Westminster Parliament in recent years the governments concerned, of different political complexions, have always had majorities and could have abused their position to suit their preferred outcome. But they did not. And so UK referenda have been recognised internationally for their exemplary processes.

Central to that reputation has been the role of the Electoral Commission and the respect shown to its advice by successive UK governments. These governments, including ours, could have ignored the Electoral Commission’s advice. But to do so would have called into question the fairness of these referenda. Time after time the wording of the question has been altered to respect the thoroughness and impartiality of the Electoral Commission.

They offered advice. No more than that.

But it would have been a foolhardy government that ignored that advice and used their majorities in Westminster to bulldoze through a biased referendum. The Scottish Government and Parliament are now placed in exactly the same roles as the UK Government and UK Parliament have been. The same expectations are placed on the Scottish Government and our Parliament here as on the UK Government and our Parliament at Westminster.

Nothing more, nothing less.

So, the Electoral Commission advises and the Scottish Parliament determines. But in delivering the question, the rules and the campaign financing agreements, we are entitled to expect that our Parliament sets aside party or campaign advantage and acts for all Scots, whatever their views. Following the Electoral Commission’s advice will give everyone confidence in the process and allow nobody to cry foul.

So 2013 starts by resolving the process that took centre-stage in 2012.

And we sorely need to move on from process alone. We need a loud, clear and robust debate about the impact that independence would have on Scots’ lives. Those who support independence must bring forward a detailed proposal of what they would hope to achieve through negotiations.

Over the last few days, we’ve had the First Minister speculating about the new written constitution of a separate Scotland. And the Deputy First Minister blogged on Tuesday that “All parts of the Scottish Government will be working on a transition plan considering what needs to be done to give effect to the decision of the Scottish people when they vote yes”.

Nicola wants talks about talks. Not talk of what an independent Scotland would be.

I really don’t think that this is where the debate should be. We cannot have the Scottish Government fast forwarding through all the difficult bits to their longed for ending where they clinch a referendum victory. People want to know what independence would mean for them, their families, and their communities. It is on that basis that they will decide how to vote.

Planning the summits and designing the constitutional apparatus is like framing and hanging a picture that is yet to be painted. No matter how gilded and fancy the frame, the missing image is the essential part. I know that it is also the most difficult part for the SNP.

But, to be blunt, that is their problem. They must treat all of us with respect and start painting the independence picture. 2013 must be the year of evidence, not assertion.

So today I want to set out what the UK Government is going to do to help inform this debate.

Last summer, I announced that the UK Government was embarking on a programme of analysis to consider how Scotland contributes to and benefits from being part of our United Kingdom. Our work will be comprehensive, open and robust. We are engaging with experts in order to flush out the issues and establish the facts. We want you to examine our work and we want you to scrutinise it.

Over the next few weeks and months we will publish a series of papers that look at Scotland’s position in the UK today and make clear the choices that would face all of us as Scots if the UK family were to break up. The first paper will be published in February. I believe that this work will show not only that every part of the UK makes a valuable contribution to the whole, but that, together, we are greater than the sum of our parts.

Together our economy is stronger and more secure. Scotland’s five million citizens are part of the UK’s economy of 60 million people with no boundaries, borders or customs, but with a common financial system, rules and currency. Together we have shown that we can withstand global economic challenges, pool our resources in the good times and manage our risks together in the bad. By working together we have a stronger place in the world. We have a great and wide consular network with over 14,000 people in nearly 270 diplomatic offices, projecting our values around the globe and looking after Scots abroad. And as an integral part of the UK Scotland benefits from significant levels of influence in the EU, UN, G8 and other international institutions.

But it’s not just on the international level that you can see the integration and benefits that being part of our shared United Kingdom brings. We also have close social, cultural and family ties across the UK. More than 800,000 Scots live and work in other parts of the UK. Each year, around 50,000 people move to Scotland from the rest of the UK. One common passport, one national insurance system and one shared tax system that allows the free movement of people, goods and investment. Together providing a level of prosperity that is greater than the sum of its parts.

There is no-one in this debate who says Scotland couldn’t go it alone.

What we – and those who share our view – are saying is it is better for Scotland and the rest of the UK to stay together in our United Kingdom. Devolution ensures power is practised as close as possible to the people it affects whilst keeping the strength and security of the United Kingdom. Important decisions on health, education and justice are made here in Scotland, but Scotland enjoys the economic strength and security of being part of our United Kingdom, working in our interests, for us all.

We enjoy the best of both worlds.

Our papers over the course of 2013 will set out the evidence about how devolution works in 21st century Britain, the facts about the way in which it benefits us as citizens and the analysis of what would be lost by leaving the UK family. In this debate, I want all of you to be active participants. Many of you are already involved in the UK Government’s work. But for those of you who aren’t, I say: please get involved. We want you to read our papers; ask us questions in the same way that you will ask the Scottish Government questions about their proposals.

The next period of this discussion must not just involve politicians and business people. I want charities, voluntary organisations, and social enterprises to be at the heart of this great debate as well. You have a crucial role to play. But most of all, you must help each and every voter in Scotland to seek out the evidence and find the information that will allow them to reach an informed decision in the referendum.

Over the course of the next year, you, Scots, all citizens in our United Kingdom, have a right to expect both of Scotland’s governments to deliver in our national interest.

Over the course of the next year you have a right to expect your UK government to demonstrate its commitment to Scotland and prove its value and relevance to Scotland’s future.

And over the course of the next year you have a right to expect those who doubt that value and question that relevance to set out how things would be better if Scotland goes it alone.

In tough times, and in the heat of constitutional battle, these are big challenges.

I relish meeting them.

I hope others do too and I look forward to the debate.

Michael Moore – 2012 Speech at City UK Event

Below is the text of a speech made by the Secretary of State for Scotland, Michael Moore, in Edinburgh on 29th November 2012.

We’re here today to discuss the contribution that the Scottish financial services sector makes not just to the Scottish economy but also to the wider UK economy;

To think about how we make sure that government – whether that be in Holyrood, Westminster or Brussels – is supporting this vital industry;

And to consider how the industry and government, working together, can best ensure that the sector continues to seize the opportunities and respond to the challenges we face.

I want, this morning, to set the scene with the steps that the UK government is taking in London and Brussels;

The steps we are taking to promote a stable and internationally competitive financial services sector through our regulatory reforms;

And our wider economic reforms.

You will not be surprised to learn that I will also argue that Scotland’s place in a strong and stable UK provides the industry with the certainty it needs in a competitive, global environment.

The financial services sector has of course experienced some tough times in recent years.

Governments, industry – we must all share responsibility for this. We must be candid about what went wrong, but more than that, we must work together to find the right way forward.

One thing that remains true, past, present and future, is that this sector is of vital importance to all of us.

Your sector provides direct employment for more than 95,000 people in Scotland.

A quarter of UK life insurance and pensions employment is based in Scotland, and 13% of UK banking sector employment.

Scotland plays host to renowned homegrown companies such as Standard Life, Aberdeen Asset Management, Baillie Gifford, Alliance Trust and Scottish Widows.

And its strengths have persuaded many others from outside Scotland to base themselves here – including companies such as State Street, Citibank, BNY Mellon, Morgan Stanley, Barclays and Virgin Money, to name but a few.

The sector provides the banking and investment services that households and businesses rely on in everyday life;

It provides life and general insurance service to protect us when things go wrong;

And it provides pensions and long-term savings to support us in the future.

These services are important to millions of people and thousands of businesses;

And that is reflected in the significant contribution the sector makes, with the industry accounting for around £8.5 billion, or 7% of Scottish GDP.

I understand the importance of this industry. And I want to make clear to you today that the UK government understands it too.

Of course, the UK government had to take rapid, and historically unprecedented, action to support the financial sector during the crisis. And of course we have all had to learn hard lessons as a result. But the UK government is now looking forward.

We are not shying away from fixing the problems, but we are also implementing policies that will enable the Scottish financial sector to support jobs, provide vital services and contribute to the Scottish economy over the long term.

We aim to strike the right regulatory balance to deliver an acceptable level of risk to government, shareholders and consumers.

We are determined to make the UK the best place in Europe to start, finance and grow a business;

A crucial part of this is to ensure that we have a robust and stable financial system.

Our programme of regulatory reform aims to ensure that Scotland has a reformed, fair and competitive financial services industry.

The new system of regulation that we are putting in place will give the Bank of England – and as announced by the Chancellor earlier this week, its new Governor, Mark Carney – responsibility for overseeing the financial system.

We are creating the Financial Conduct Authority to supervise all firms to ensure that business across financial services and markets is conducted in a way that advances the interests of all involved.

Within the EU and other international forums, we are working closely with our key partners to ensure that the legislative framework fully supports the unity and integrity of the single market, and creates the right environment for stable and sustainable growth in financial services and the wider economy.

This is a hugely important point – the industry should be in no doubt as to the benefits that accrue as a result of the UK’s influence and voice on the international stage.

Being part of the UK allows Scotland’s voice to be heard on such key issues as Solvency II, where we are urging EU institutions to act decisively and agree a credible process for resolving disagreement on the treatment of long-term products, and commit to a realistic timetable for Solvency II implementation.

We are strongly opposing the imposition of Solvency II-inspired capital requirements on the pensions industry. These would negatively affect millions of Europeans, by reducing growth, investment, competitiveness, jobs and pensions income.

We are a vocal opponent of attempts to ‘water down’ international agreements on issues like tough bank capital requirements, in order to avoid regulatory arbitrage and financial instability.

And we have pushed back hard against unworkable proposals for a Financial Transaction Tax.

Of course, we are not only acting in the area of regulation.

Elsewhere, we are taking decisive action to ensure that the Scottish financial and professional services sector can flourish. That action includes:

Working with the banking industry to improve competition.

We are removing barriers to entry and growth for mutuals and credit unions, to help foster diversity in financial services;

And we are working to introduce a more competitive tax regime for funds, including special taxation rules to facilitate tax transparent funds, allowing UK-based asset management companies to thrive.

In the area of professional services, some of you may have attended an event last week at which the Advocate General set out the work the UK government is doing in support of the Scottish legal services sector.

The UK government is ensuring that the Scottish legal sector has promotional opportunities through the unique UK government network around the world. We recognise that the sector is of huge importance, underpinning strong economic growth in all sectors, including financial services.

Of even greater importance to the financial and professional services sector, we are working to help return the wider Scottish economy to growth – we understand that, just as the financial services sector is vital to the health of the wider economy, so the health of the wider economy is fundamental to the prospects of the sector.

So we are reforming the tax system to help promote growth.

We will introduce a reduction in the main rate of corporation tax to 22% in 2014, the lowest in the G7.

We are taking action to support bank lending to businesses, including through initiatives such as the Funding for Lending Scheme.

We have introduced the Seed Enterprise Investment Scheme to encourage investment in new start-ups and in businesses with the highest growth potential.

The UK Guarantees Scheme will help dramatically to accelerate investment in infrastructure.

And we are reducing regulation and making procurement processes simpler to help small businesses gain access to government contracts.

Let me now turn to the final issue I will speak about today – Scotland’s place in the UK, and the benefits our United Kingdom brings to the financial and professional services sector.

I mentioned at the outset the historic strength and enduring place of the financial services sector here in Scotland.

But I know from meeting and talking with many of you that those working in this industry would be the first to acknowledge the benefits that we derive from close ties with the rest of the UK and the City of London in particular.

Under the current arrangements, the Scottish financial services sector benefits hugely from the strong and credible Bank of England as its central bank, lender of last resort, and – as demonstrated with HM Treasury in recent times of crisis – the rapid and coordinated action between strong, credible fiscal and monetary authorities.

Coordinating the Bank’s monetary activism with the greater fiscal firepower that the UK, as a larger and diversified economy, is able to leverage, has been absolutely crucial to our financial system.

The UK government spent £45 billion recapitalising RBS. In addition, the bank received £275 billion of state support in the form of guarantees and funding. In total, this would have been more than 200% of Scotland’s GDP on any measure – including the Scottish government’s preferred one that includes a geographical share of North Sea oil.

The UK government was able to deliver a coordinated response that mitigated the significant harm that could have been caused to the UK economy and our families and businesses if the 2 banks had collapsed.

It’s unclear to me how an independent Scotland, which the First Minister wanted to be more light-touch in its regulation of the sector, could have achieved that.

Let’s also look at the benefits of a highly integrated UK financial services marketplace. Taking 2 examples; the mortgage and life insurance sectors, in the last financial year:

Fewer than a fifth of mortgages provided by Scottish firms were for Scottish properties, with the remainder – four fifths – for properties in the rest of the UK.

Eight out of 10 life insurance products sold to Scottish postcodes were from rest of the UK firms; and

Only 1 in 10 life insurance products sold by Scottish firms were to Scottish postcodes – 9 out of every 10 sold went to the rest of the UK.

One of the main factors underpinning this integration is that we have a single regulatory environment covering the whole of the UK.

Why would anyone wish to put a barrier in the middle of these transactions? Doing so could surely only harm competition and choice, and drive up costs for Scottish consumers.

The plans and consequences of leaving the UK are based on shifting sands and enormous doubt.

Gone are the days where we heard about the differences that independence will bring – now apparently everything will definitely remain the same.

It’s not just the pound sterling that the Scottish government claim they now want to adopt, but also the UK’s financial regulatory framework.

The Scottish government like to tell us that banks and financial services in an independent Scotland would remain under the UK regulatory regime because “that framework is solid and substantial” – John’s own words.

But as you in this audience know, under European rules every member state must have its own regulatory system.

The Scottish government tell us that they will be part of Europe, but they have yet to explain how their proposal to adopt the financial framework of another state would work. (Never mind how they will become part of the EU!)

Now there are those who say that Scots need not worry about these problems because the Referendum Agreement states that Scotland’s 2 governments will work together.

That Paragraph 30 is a magic paragraph that will erase all the difficult questions.

Well, let’s be crystal clear this morning about what this agreement does – and does not – mean.

And let’s begin by hearing the Paragraph 30 text itself.

“The United Kingdom and Scottish governments are committed, through the Memorandum of Understanding between them and others, to working together on matters of mutual interest and to the principles of good communication and mutual respect.

The 2 governments have reached this agreement in that spirit.

They look forward to a referendum that is legal and fair producing a decisive and respected outcome.

The 2 governments are committed to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.”

This means that the 2 governments will conduct the referendum on the same constructive terms as they work today.

It means that if the referendum follows the path set out in the Order and Agreement, its outcome will be decisive.

And it means that, regardless of what the result is, that constructive relationship should continue as we move forward.

That is good practice and common sense.

But what it does not mean is that, in the event of a yes vote, the remaining UK would facilitate Scotland’s every wish – any more than an independent Scotland would unquestioningly facilitate the wishes of the remaining UK.

Inevitably, when there are 2 separate countries, there are 2 sets of interests – sometimes mutual, sometimes at odds.

So it is in the UK’s relationships with its closest allies today.

And so it will always be between separate, sovereign states.

Nor does it mean that the difficult questions that would face a newly independent Scotland would all be within the UK’s gift to resolve.

Membership of the EU, participation in NATO, international regulation of our financial services.

These deeply complex issues would require resolution on the international stage, and Scotland alone would take responsibility for tackling them.

This too is common sense.

So the Edinburgh Agreement – particularly its Paragraph 30 – are a statement of our determination to hold a referendum that is legal, fair and decisive.

They do not – cannot – pre-empt the implications of that vote.

I know that this is what the words mean.

Because I negotiated them.

This all matters because the key to a strong financial services sector is confidence and stability.

And not just to this sector but to the whole economy.

So we need more than optimistic assertions of what might be, without evidence, analysis, or support.

That approach will not help the Scottish financial services in a global industry where confidence and stability are hugely important.

That is why the UK government is setting out what we are doing now to support the financial services in Scotland; and we will continue to do so over the next few months.

It’s also why the Scottish government must set out what the details of its independence proposal would be for this sector

And why each and everyone of you should examine statements from both governments and test them, in just the same way that you would examine and test your own business models.

Where we do not have all the answers – we must be honest and say that. Where the Scottish government cannot give the financial services industry or the Scottish people a guarantee – for example where matters need to be negotiated, and agreed with others – the Scottish government must be clear of the limits of what they can promise.

It is only by doing so, by us all being candid, that we ensure the facts are heard, and that everyone is able to make an informed choice in the referendum.

To get the right outcome for the financial services sector.

And the right outcome for Scotland.