BREAKING UP BRITAIN WILL HIT YOU IN THE POCKET; from Your Mortgage to Insurance and Even Just Using an ATM ... the Hidden Price of Independence; Official Treasury Report Looks at the Hidden Price We All Would Pay Were Scotland to Become Independent. Hang on to Your Wallet! the Cost of 'Freedom'
Byline: Alan Roden Scottish Political Editor
INDEPENDENCE could send mortgages and car insurance bills soaring, jeopardise savings and force Scots to pay for cash withdrawals.
That is the predicted impact of a Yes vote in next year's referendum, according to a new Treasury report.
The 111-page analysis, written by the country's top civil servants, reveals that victory for Alex Salmond would cause massive upheaval to personal finances for every family.
Scottish Secretary Michael Moore yesterday warned against building a 'border in the middle' of the present UK-wide market, while the body that represents UK banks and finance firms said the study was 'fact-packed'.
But SNP deputy leader Nicola Sturgeon claimed being part of a UK economy has 'been holding Scotland back for generations'.
According to the Treasury, mortgage lenders based in Scotland could lose their English customers following a Yes vote and find it harder to raise money.
That would lead to fewer and less competitive deals, and generate higher costs - which would be passed on to customers.
Government officials warn that just a 1 per cent rise in rates would force a family with a 90 per cent mortgage to find an extra [pounds sterling]1,590 in the first year, based on the average house price. Increased interest payments for all Scottish households could reach [pounds sterling]1billion a year as a result.
As EU rules would force a separate Scotland to establish its own financial regulator, the extra red tape would send insurance premiums soaring.
The Treasury study also warns that private pension schemes and life insurance products would be affected, because 'separate markets require different products'. One of the most far-reaching consequences of separation could be on bank accounts. The report warns: 'Scottish independence would introduce layers of difficulty to retail consumers when operating between an independent Scottish state and the UK, normally at a cost.'
Free-to-use cash machines could also become a thing of the past, forcing Scots to pay to withdraw their own money. Presently, the vast majority of ATMs operate on the LINK network, with the costs absorbed by UK-wide card providers, but in Ireland - described by the Treasury as a 'useful comparison', - most personal bank accounts include a charge.
Generally Mr Moore warned existing 'economies of scale' in the UK would be lost, saying: 'If you put a border in the middle of that market, if you introduce different tax and regulatory regimes, it's wishful thinking to think it's not going to have any effect on the range of products you and I can buy to protect our families and our futures.
'It's common sense that all of those things would increase costs for Scottish firms. You don't have to be a genius to work out that ultimately it would be you and me who bear those costs, whether it be in mortgages, pensions or in our insurance. …