Leading research director warns Scottish independence is a 'very real possibility'

Dr Angus Armstrong, director of macroeconmic research at the National Institute of Economic and Social Research, says region would suffer

Dr. Angus Armstrong, National Institute of Economic and Social Research and Fellow of the ESRC Future of the UK and Scotland programme
Dr. Angus Armstrong, National Institute of Economic and Social Research and Fellow of the ESRC Future of the UK and Scotland programme

A leading research director today warns the North East that Scottish independence is a “very real possibility” - and that this region could be the biggest loser.

As the gap between the Yes and No campaigns continues to narrow to just six points, Dr Angus Armstrong says the referendum is now “neck and neck”.

The director for macroeconomic research at the National Institute of Economic and Social Research said a vote for independence could see drop in trade equivalent to 4% of Gross Domestic Product over time, with the North East suffering more due to uncertainty over currency at the border.

He said: “No-one should kid themselves this isn’t a real possibility.

“This is a very real possibility. It is effectively neck-and-neck.”

Alex Salmond’s Yes campaign is gaining momentum with respecting polling bodies showing the gap close with Alistair Darling’s Better Together campaign, which many had believed would comfortably win.

Polls now show 53% would vote no and 47% yes. This represents a 16-point gain over the last five weeks.

The respected researcher also told how studies carried out across the globe have revealed trade across a political border is destined to erode.

“Over time, you would expect to see Scotland introduce new regulations and standards - that is natural for independent sovereign countries - but this means that regulations will be different south of the border.

“The regulations will become more and more different and what research around the world finds is that where there is a political border there is less trade.”

He added the true impact Scottish independence would have on the North East was not likely to emerge for 30 years.

He said: “It is a slow process, it doesn’t all disappear overnight, it happens over decades but it does tend to happen.

“People are estimating the drop to be equivalent of 4% of GDP over 30 years.”

He added this could hit the North East harder due to the potential movement of people.

Dr Armstrong also stressed the North was in for five years of uncertainty in the event of a yes vote, as leaders thrash out a fiscal deal.

He added, however, that the referendum had electrified the debate around devolution of powers to the North East and other regions.

He said: “I think the genie is out of the bottle when talking about devolution of powers.

“There is a clear consensus now where there was not a consensus two years ago. That is a profound change.”

Scotland will go to the polls on September 18.

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