This report states the six main areas of the proposed referendum where Secretary of State for Scotland Rt Hon Michael Moore has identified clarification is required: bank regulation; pension payments; the national currency; membership of international organisations; Scotland's defences; and costs of separation. The Committee asked members of the public to submit their questions on what matters need to be clarified on these very broad themes, and what additional questions need to be resolved. In addition the Daily Record launched a campaign in support of the inquiry and its readers have also submitted a series of questions. All the questions received so far are published with this report, and will form the basis of the inquiry. Many relate to specific policy areas where the answers would most likely vary according to which political party or parties formed a Government in a separate Scotland. While it is fair to raise these questions - they will be crucial to voters in determining which party they might vote for in any Scottish General Election post-separation - the Committee says the main structural and institutional issues, which will form the constitutional architecture of a post-separation Scotland, are more pressing in terms of enabling the electorate to make a choice on how they would vote in a referendum on separation. It is these questions that will be the focus for the Committee. The Committee recommends that as a matter of urgency, the Secretary of State for Scotland: takes responsibility for clarifying the UK Government's position on appropriate matters, by co-ordinating work across the Cabinet; and undertakes to work with the Committee to provide a joint provision of factual and unbiased information to the people of Scotland.

Today Scotland's interests in the European Union are represented by the UK which, as one of the largest Member States, has the voting power and leverage to influence decisions to the benefit of Scotland. In leaving the UK, a separate Scotland would lose this advantage. A separate Scotland is likely to have its application to join the EU accepted - but not within the self-imposed timetable of 18 months, nor with the terms, that the Scottish Government is proposing. The proposal that Article 48 of the Treaty on European Union could be used to provide for Scottish membership is not supported by any other EU state; senior EU figures have ruled it out and it is opposed by the United Kingdom Government - which would, under this process, have to initiate it. The additional and exceptional demand for the ability to discriminate against UK students with respect to tuition fees would be voted against by the UK Government and is therefore almost certain not to be met. Furthermore, insufficient attention has been paid to the need to negotiate the UK's retention of VAT zero rating on a wide range of goods. As a separate Member State, not only would Scotland cease to benefit from the UK rebate (currently worth in the region of £300 million per year to Scotland) but it would have to contribute to it. In these circumstances Scottish voters need a more realistic alternative perspective of how joining the EU would be achieved, and what its likely terms and timetable would be.

It is of the highest importance that both sides of the Scottish referendum argument will be willing to accept the result of the referendum - whatever that is - and that the losing side should have no basis to claim that the process was biased or illegitimate. The referendum legislation should be passed in the Scottish Parliament and so it should therefore be given the legislative competence to do so. However, that places a heavy responsibility on the Scottish Parliament to build the referendum bill on the widest possible consensus. But the Committee is concerned that in a number of aspects of the process the Scottish Government appears to be pursuing partisan advantage, rather than seeking consensus. In a previous report, 'Do you agree this is a biased question?' (HC 1492, session 2010-12, ISBN 9780215044990), the Committee drew attention to the unsatisfactory nature of the question proposed, but the Scottish Government is persisting with it. The Committee says that despite the real difficulties caused by prolonged delay, the Scottish Government is insisting on holding the referendum as late as possible. Despite agreeing to the impartial oversight of the Electoral Commission, it has refused to commit to be bound by the decisions of this neutral referee. Also, the rules around donations should follow the PPERA framework, and no foreign donations should be allowed

This report considers whether the wording of the referendum question proposed by the Scottish Government is biased, and what should be done to ensure that a fair and clear question is put to the Scottish electorate. Based on the evidence, it is concluded that the question: Do you agree that Scotland should be an independent country? is biased. This is important because wording can affect the result of a referendum. This referendum must be, and be seen to be, fair and acceptable to those on both sides of the argument. It is essential that the result commands wide acceptance. It is now widely agreed that the Electoral Commission is the appropriate body to regulate a referendum and ensure that the wording of the question is clear and fair. This means an exhaustive process of testing of proposed words and how the options are put to the voters. This will take some time, and therefore it must be started soon. It need not wait until a referendum Bill is drafted but debate needs to move on to the policies and issues of separation. The best course is for the parties to agree jointly what question wordings should be put to the Commission. If a consensus cannot be reached, those parties who can agree should approach the Commission together. Our objective is that all can accept the advice of the Commission on a clear and neutral question, which can be incorporated into the legislative process from the very beginning.

For related report, see HCP 542 (ISBN 9780215047519)