Cameron's army of civil servants to defend Union

Michael Settle

UK Political Editor

Monday 29 October 2012

WHITEHALL'S full intellectual might is now engaged on what has been dubbed the Coalition's "manifesto for the UK".

Better TOGETHER: Tory leader David Cameron and LibDem Scottish Secretary Michael Moore. Picture: Getty

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MICHAEL SETTLE UK POLITICAL EDITOR

The drive will see a paper on each of 13 policy areas relating to what the UK Government regards as the key benefits of Scotland remaining in the Union due to be published by Coalition ministers each month during 2013.

The Treasury is spearheading the co-ordinated push with Sir Nicholas MacPherson, the department's top civil servant, chairing a group of permanent secretaries. It is overseeing teams of top economists and civil servants, who are busy formulating the statistical and policy ammunition for ministers, including David Cameron, to fire in their bid to stop the Nationalist-led attempt to end the 300-year-old Union. Sir Jeremy Heywood, the Cabinet Secretary, is also chairing another group liaising with ministers.As well as Whitehall's chief economists being involved in the push, Sir Nicholas has recently been to Scotland to discuss Scottish independence with leading financial experts here to see what their views are on the Coalition's approach, if it is adopting the right one and which areas of policy it should be focusing on.Some 13 policy "work streams" have now been established. Five involve the Treasury and cover the economic performance of Scotland, currency and monetary policy, tax and spending, financial services and banking, and debt and borrowing.The other eight work streams involve several UK Government departments. These are: The legal basis and history of the UK, EU membership and inter-national matters, energy and North Sea oil, defence and security; welfare, culture, heritage and identity, borders and immigration, and business, innovation and infrastructure.The Herald has been told the Prime Minister, who made clear during the Conservative Party conference that defeating the bid for Scottish independence was now his priority, is determined to ensure Scottish voters are as well-informed as possible about the key facts in the debate by means of robust, wide-ranging and comprehensive analysis of Scotland's status within the UK an d the strength of the UK with Scotland in it.The areas of analysis clearly show where the Coalition's lines of political attack will be.The economic argument as to whether or not Scots decide to stay in the UK will be crucial in the run-up to the 2014 referendum and Whitehall's analysis will focus on a range of key issues.l Trade: Scotland as part of the UK has access to a larger domestic market, which could be threatened by independence with an impact on the flows of trade, labour and capital between Scotland and the rest of the UK; before their split, the Czech Republic and Slovakia had a great deal of cross-border trade, after it, this decreased significantly.l Debt and borrowing: As a new country with no track record a breakaway Scotland is likely to face higher borrowing costs.l Services: With oil revenues set to decline over the next 30 years and demographics showing Scotland's population is ageing faster than the rest of the UK's, will an independent Scotland be able to maintain its current public services?l Resilence to shocks: A newly independent state with a much smaller economy could be more at risk of structural shocks such as the failure of a big bank.l Currency and monetary policy:If a breakaway Scotland joined a sterling zone, its monetary policy would be set by a foreign country.l Finance: How would the financial sector in an independent Scotland relate to the Bank of England? Mortgage providers based in Scotland sell 16% of their mortgages to Scottish properties and 84% to those elsewhere in the UK.In contrast to the large number of senior people working on Whitehall's defence of the Union, the Scottish Government appears to be using fewer resources to make the case for an independent Scotland.When asked about the work it was undertaking ahead of the 2014 poll, a spokeswoman for the Scottish Government did not give any details except to say information on this matter would be released shortly.

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Cameron's army of civil servants to defend Union

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