A 'Yes' vote for independence will break up the UK single market and in the short-term could leave Scottish businesses uncertain of their position in Europe, says the Business, Innovation and Skills Committee in this report. A protracted Scottish negotiation over EU membership, and the uncertain investment environment arising from a 'Yes' vote, will have a damaging impact on businesses in Scotland, as well as other parts of the UK. The Committee raises serious concerns that a 'Yes' vote may also leave Scotland facing a currency 'limbo' and in the short term unable to join a sterling currency union and without the prospect of adopting the Euro. Also, the Scottish Government's stated intention to renationalise the Royal Mail upon achieving independence is an un-costed aspiration, bereft of any detail of how it is to be paid for or how it would be done. The Committee also fears for the future of the Universal Postal Obligation in an independent Scotland with its continued survival likely to be secured only at significant additional cost. On higher education, the Committee explored the topics of student fees and UK research collaboration. The central plank of the Scottish Government's HE policy, to charge tuition fees to students from other parts of the UK, was likely to be illegal under EU law. The Committee also expressed concerns this policy would result in Scottish universities facing a financial shortfall, given the significant income currently received for non-domiciled UK students.

Incorporating HC 139-xv - HC 139-xx, session 2012-13 and follows on from HC 139-II, session 2012-13 (ISBN 9780215052551). For related report, see HCP 542 (ISBN 9780215047489)

In 2007, financial institutions across the world began to encounter difficulties raising the funds needed to keep their operations going, leading to a crisis of confidence in the banking system. In response, governments have intervened to support the financial system. The complexity of the problems across the financial sector and the speed with which events unfolded presented the Treasury and the other Tripartite Authorities with a formidable challenge. There have been no disorderly failures of UK banks, and no retail depositor in a bank operating in the UK has lost money. To date a range of indicators, including benchmark interest rates for wholesale funding, bank share prices and the perceived risk of defaults, have stabilised and improved. But the scale of the support required from the UK taxpayer to maintain financial stability, totalling around £850 billion, has been truly staggering. In responding to the crisis the Treasury was heavily reliant on the use of external advisers, and the terms allowed for the potential payment of success fees in situations where no success criteria were specified, a practice wholly inappropriate in the public sector. Lending to business, vital to the recovery of the economy, is falling short of legally-binding commitments entered into by two of the banks that received the most support: the Royal Bank of Scotland (RBS) and Lloyds Banking Group. The priority now is to get the best value for the taxpayer from the huge sums of public money invested in the banks.