Scottish Independence: Business Leader Evokes Fears Of New 'Jacobite Wars'

The imminent Scottish referendum risks similar tensions to what was seen in Scotland when the Jacobite rebellions took place, a business leader has suggested.

BT chairman Sir Michael Rake, who is president of Confederation of British Industry, used a speech to City figures at a dinner organised by the insurance market Lloyd's of London to warn against Scotland going "full circle" back to the time of the uprisings, which broke out across Britain in a bid to return King James II to the throne after he was deposed in 1688.

"Around the time Lloyd’s was being founded in 1688, The Revolution was underway which led to the Jacobite wars in Scotland and, in time and in part, to the Act of Union in 1707," he said on Wednesday night.

"Two weeks’ away from the Scottish referendum, let’s hope we’re not actually going full circle, that common sense prevails and that we’re going to continue to draw strength from our long-standing Union."

In response, a spokesperson for the Scottish National Party told the Huffington Post UK: "Sir Michael Rake has been doing the No campaign no favours in recent days. First he embarrassed David Cameron by underlining the fact that the only threat to Scotland's place in the EU comes from an in/out referendum on EU membership in the event of a No vote and now these bizarre comments will only invite ridicule from the general public."

A spokesperson for the Business for Scotland pro-independence group hit out at Sir Michael's "daft" and "out of touch" comments, adding: "While the CBI is talking about a war that happened three and a half centuries ago Scotland's businesses are looking forward to a brighter future and a time of opportunity."

"While Sir Michael Rake is worried about claymores being pulled from their hiding places we're looking at helping to build a fairer and more prosperous society. Where he sees threats we see opportunities."

Speaking before Sir Michael, Lloyd's chairman John Nelson told the audience that he would be "extremely sad" if Scots voted for independence later this month.

To applause, he added: "It is in the interests of the entire Scottish population, and the wider British population, all 65 million of us, who inhabit these extraordinary islands that the Union stays together."

Sir Michael's stark warning comes as the Wall Street bank Goldman Sachs said that a vote for independence could plunge the UK into a eurozone-style crisis due to major uncertainty over the creation of a currency union.

“The most important specific risk, in our view, is that the uncertainty over whether an independent Scotland would be able to retain sterling as its currency could result in an EMU-style [Economic and Monetary Union] currency crisis occurring within the UK,” wrote Kevin Daly, one of the bank’s senior economists.

“Even if the sterling monetary union does not break up in the event of a Yes vote, the threat of a break-up would provide investors with a strong incentive to sell Scottish-based assets, and households with a strong incentive to withdraw deposits from Scottish-based banks,” he added.

Goldman Sachs also warned that an independent Scotland would need to make "painful" cuts as part of a "significant budget adjustment" to get its finances in order as it currently gets higher public spending from the Treasury due to the Barnett Formula.

“Filling this gap in the event of independence would be painful and is likely to require a significant reduction in the provision of public services. In the long run, an independent Scotland would likely have a smaller public sector,” Daly said.

Berenberg, a German multinational bank, echoed Goldman Sachs' warning as it concluded that an independent Scotland would require "significant further austerity”.

“Government borrowing costs would be higher and there would probably be economic disruption from a new Scottish currency … Overall, we judge that the few years following the vote would be tough but not calamitous,” it said.

Meanwhile, Chief Secretary to the Treasury, Danny Alexander, seized on the pound dropping around 0.6% against the dollar after a poll indicated that the Yes campaign was gaining in popularity as proof that independence would be an "economic earthquake".

He told the Independent: “I think this is a taster of the economic damage that will be done, particularly to Scotland, if we voted for independence. These are the tremors, but we can avoid the earthquake by voting No.