According to detailed plans for an independent Scotland, tracker mortgages will continue to move in line with the Bank of England Base Rate, while a highly integrated market means firms will be able to offer products wherever they are based.
A Scottish Government spokesman said a formal monetary union with the UK will make sense should Scotland become independent: “The Bank of England will continue to set one interest rate across the Sterling Area and mortgages providers will continue to be able to provide products and services in both countries.”
Under a proposed Sterling Zone, borrowers will also continue to pay in pounds and pence.
The Scottish government plans to set up a Scottish alternative to the Financial Conduct Authority, which will work closely with the UK regulators in order to maintain ties with the wider market. This will include sharing rulebooks and supervisory handbooks.
The white paper said the market for financial products is highly integrated: “This framework will mean that firms will be able to continue to provide financial products and services no matter where they are based.”
However the white paper indicated consumer protection rules could be tougher in an independent Scotland, with proposals for streamlining consumer services and cracking down on payday lenders.
In order to promote financial stability, the government proposes either a shared Sterling Area prudential regulation authority, or a Scottish-based regulator working alongside both. Under the plans, the Bank of England will continue to be the lender of last resort.
According to an October YouGov poll, more than half of Scots do not think Scotland should become an independent country.
Former British Chancellor Alistair Darling, who is also spearheading the pro-union campaign, described the white paper as a “work of fiction” that fails to answer questions about mortgage rates.
He said: “With so much uncertainty and unanswered questions about the cost of independence, leaving the UK would be a huge leap in the dark – especially when we know that devolution works for Scotland.”
