2014 independence referendum caused less instability than Brexit report finds

Nathanael Williams

New report demolishes the warnings of instability of unionist politicians  

SCOTTISH REFERENDA do not cause instability according to a new report released by the Fraser of Allander Institute (FAI), the leading economics thinktank based at the University of Strathclyde.

The FAI’s figures show a stark contrast between the 2014 independence referendum and the EU referendum last year, which resulted in Brexit, triggering market chaos and a drop in the value of the pound.

Its findings showed that the independence referendum of 2014 was not “a major driver of volatility” and did not cause the instability claimed by Unionist politicians such as Labour’s Alistair Darling and Murdo Fraser of the Scottish Conservatives.

The news will come as a blow to Unionist politicians who have cited referenda over Scottish Independence as innately destabilising for the economy at a time when the Scottish Government looks to bring forward another referendum.

 “Claims from the opposition parties that the referendum was causing a drag on Scotland’s economy have been proven to be categorically untrue by this report.” Ivan McKee

SNP MSP Ivan McKee, who sits on Holyrood’s Finance and Constitution Committee, said: “This report from the respected Fraser of Allander Institute demolishes one of the central myths around the 2014 independence referendum. It has come to a definitive conclusion in rubbishing the claims that the referendum had a damaging impact on Scotland’s economy – suggesting instead that any volatility was relatively minor compared to other global forces from that time.
“The 2011 Eurozone debt crisis, for example, had a much bigger impact on economic volatility in Scotland, as did the result of the 2010 General Election.
“Claims from the opposition parties that the referendum was causing a drag on Scotland’s economy have been proven to be categorically untrue by this report – yet another example of scaremongering that has been proven false. The report could not be clearer in saying that the referendum ‘does not appear to have been a major driver of volatility’ in the Scottish economy, and that those seeking to point the finger should maybe look at wider global forces before blaming the 2014 referendum.”

The report released over the weekend focuses on a range of causes for the ongoing volatility in the markets around the time of the 2014 vote. The main issue was global economic stress, including the Eurozone debt crisis which the FAI stated had a much more significant impact on the economy.

The independent group found that at the time of the 2014 referendum the level of insecurity was lower in comparison to periods around the European debt crisis of 2011, the UK election in 2010 and the Brexit vote of last year.

A spokesperson for the FAI said: “To be clear, our analysis isn’t an attempt to assess whether or not Scottish independence is a good or bad thing. Nor does it reveal that. Instead, it is simply designed to examine the impact of the referendum itself on short-term financial market volatility.”

The report came as welcome news for the Scottish Government which last week released official figures showing Scottish GDP grew by 0.4 per cent last year compared to UK growth of 1.8 per cent. Opposition parties such as the Scottish Conservatives have emphasised that a second referendum on Scottish independence would cause “too much instability” at a time when the UK Government has been criticised for pursuing a hard Brexit, with the possibility of greater economic dislocation. 

Tory finance spokesman Murdo Fraser said: “She (Nicola Sturgeon) has made Scotland the highest-taxed part of the UK and created more instability and uncertainty with her threat of a second referendum. Now we see the real-life impact of her mismanagement.”

Picture courtesy of David McKelvey

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