Scotland has no Plan B on currency, says rest of the UK

Thursday, 10 April 2014


Majority says Scotland has no alternative plan to using the pound, yet 53% oppose currency union

As currency continues to dominate the independence debate, 52% of people in the rest of the UK now doubt that Scotland has a clear contingency plan should it lose the pound. The finding comes from a new YouGov poll commissioned by UKForex, an international currency transfer service.

The poll, which questioned 1,622 people in England, Wales and Northern Ireland, saw three times fewer respondents express belief that the Scottish government has a viable alternative plan to using sterling (18%).

Yet, while the majority thinks Scotland has no Plan B, the new figures also show that 53% oppose a currency union, with half as many people supporting an independent Scotland keeping the pound (26%).

Effect on respondents’ finances

Respondents’ opinions differed when it came to the effect of Scottish independence on their finances.

45% had money in Scottish financial institutions. Of these, 2 in 5 said they would be more likely to move their money to an England-based provider than keep it in Scotland if the country were to lose the pound (42%).

The finding represents a threat to the Scottish financial sector, which currently has more than £750bn of assets under management*. Nine in ten customers of Scotland’s many banks, pension providers and investment institutions are based elsewhere in the UK**. If 42% of them were to take their money out of Scotland as the poll suggests, that could mean as much as £280bn moving south of the border***.

The poll also revealed lack of awareness about the size of Scotland’s financial sector. Only 1 in 100 respondents correctly sized the sector at £750bn, while three quarters of respondents said they could not value it.

David Nicholls, Manager at UKForex, said:

“With only five months to go before Scotland votes on independence, these findings suggest currency remains one of the most hotly contested issues in the rest of the UK. On the one hand, opinion is still strongly against Scotland keeping the pound, but on the other, a majority see no alternative currency solution on the table.

“The currency question could make or break this referendum, and any dragging uncertainty here could impact the pound both before and after the vote. This is something that would be felt by those living outside Scotland as much as it would within the country.

“It took almost a decade to negotiate the euro. Currency unions are complicated beasts, so an easy answer looks like a distant prospect.”

Among the survey’s key findings:

  • Twice as many English, Welsh and Northern Irish people now oppose an independent Scotland continuing to use the pound as support it (53% oppose; 26% support; 21% don’t know)
  • 52% of people think Scotland does not have a Plan B if it cannot keep the pound - three times fewer people believe it does (52% said Scotland does not have a Plan B for currency; 18% said  Scotland does have a Plan B for currency; 30% don’t know)
  • 45% of those questioned had investments, savings or pensions with Scottish providers. If Scotland becomes independent and loses the pound, 42% of these respondents would be more likely to move their money to an England-based provider (42% more likely to move savings/investments; 5% less likely; 40% no difference; 14% don’t know)
  • Only 1 in 100 respondents knew how much of Britons' savings and investments is managed by Scottish institutions (8% valued it between £0 - £10bn; 11%, £11 - £100bn; 4%, £101 - £749bn; 1% valued it correctly at £750bn +; 76% don’t know)
  • Were Scotland to become an independent country, twice as many people think they will be financially worse off (16%) than better off (8%); however, the vast majority think Scottish independence would make no real difference to their personal financial situation (56%)

Footnotes

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 1,622 adults. Fieldwork was undertaken between 30th March - 1st April 2014.  The survey was carried out online. The figures have been weighted and are representative of all English, Welsh and Northern Irish adults (aged 18+).

* Scottish Financial Enterprise: http://www.sfe.org.uk/facts.aspx
** HM Government Treasury, ‘Scotland analysis: Financial services and banking’, p.7: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/200491/scotland_analysis_financial_services_and_banking_200513.pdf
*** The calculation is as follows: 9 in 10 customers of Scottish institutions are based in the rest of the UK, so 90% of the total £750bn of assets in Scotland = £675bn. 42% of respondents with money in Scotland said they would be more likely to move to an England-based provider. 42% of £675bn = £283.5bn, which is as much as could move. Please note, this estimation is based on the assumption that both Scottish and other British customers have the same average level of savings and investments in Scottish financial institutions

About UKForex

UKForex is an international currency transfer provider. Since its launch in 2005, the company has focused on providing business clients and consumers with a smarter, online alternative to existing currency exchange services. UKForex is a wholly-owned subsidiary of the OzForex Group, one of the world’s largest online international money transfer providers.

The OzForex Group is a global provider of online international payment services. OzForex Group technology also powers international money transfer services of Travelex, Moneygram, ING Direct, Macquarie International Money Transfers and other international financial institutions. Established in 1998 with the aim of providing clients with a better deal, it has offices in Sydney, Toronto, San Francisco, London, Hong Kong and Auckland.

The OzForex Group provides services under the brands OzForex, UKForex, CanadianForex, USForex, NZForex, Tranzfers and ClearFX. Its parent company, OzForex Group Limited, is a publicly listed entity with shares traded on the Australian Securities Exchange under the code "OFX".

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