U.K. Lack of Planning for Scots Independence Is ‘Unsustainable’

The U.K.’s lack of contingency planning for Scottish independence means it is failing to serve voters, former Chancellor of the Exchequer Nigel Lawson said.

“How are the people to judge this if you are not prepared to say what the consequences would be?” Lawson, who was chancellor between 1983 and 1989, told Scottish Secretary Michael Moore yesterday. “That is totally unsustainable. You will let down the people of Scotland very badly.”

Lawson, 80, was speaking at a House of Lords hearing into the economic implications for the rest of the U.K. should Scotland become independent, the flagship policy of the semi- autonomous government in Edinburgh. A referendum is scheduled for the fall of 2014 following an agreement between Prime Minister David Cameron and Scottish First Minister Alex Salmond.

His comments were supported by Christopher Tugendhat, a former Conservative cabinet minister and European Union commissioner, and Denise Kingsmill, a former deputy chairwoman of the Competition Commission.

It would be a “dereliction of duty” if the Ministry of Defence was not doing contingency planning about the possibility of having to remove the U.K.’s independent nuclear deterrent from its base near Glasgow, Tugendhat told Moore.

Most large companies do scenario planning and it would be “irresponsible” of the U.K. not to focus on the consequences of independence in advance of the referendum, Kingsmill said.

Scottish Talks

The U.K. will set out the issues surrounding independence in a series of papers to be published next year, Moore told the lawmakers. That was different from having negotiations with the Scottish government in advance of the referendum, he said.

“I don’t think we have the locus or the responsibility to have pre-negotiations,” he said. “There will be elements of this that will be inelegant and messy.”

The U.K. government’s starting position on monetary policy in the event of Scottish independence is that the Bank of England won’t automatically be Scotland’s central bank, Moore said. Salmond has said he plans to keep the pound as Scotland’s currency and the Bank of England as its interest-rate setter.

The agreement between the two governments on the process for the referendum “doesn’t mean that the U.K. will accept every assertion of the Scottish government,” Moore said. “It doesn’t give them a free pass to their policy wishes.”

To contact the reporter on this story: Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net.

To contact the editor responsible for this story: Rodney Jefferson at r.jefferson@bloomberg.net

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