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Is there a business case for Scottish independence?

Despite compelling and emotive arguments both for and against Scottish independence, predicting the likely economic impact of a “yes” vote is an almost impossible task.

However, amidst all of the uncertainties, few would disagree that, in the short term at least, unpicking the complex links that unite Scotland with the rest of Britain would create some significant challenges for industry.

So far, the “yes/no” debate has been an emotionally charged affair and despite a widespread acknowledgement that the economy is the most critical issue, the voices of the businesses essential to economic health have been disappointingly muted.

A letter published in today’s Scotsman newspaper – from a group of over 130 business leaders with operations in Scotland – is therefore an important addition to the debate (although not necessarily a welcome one for supporters of the “Yes” campaign).

Warning that the business case for independence has not been made, the letter claims that uncertainty over currency, regulation, tax, pensions, EU membership and support for exports could hamper the growth of the Scottish economy at a time of record investment and high employment rates.

Industrial leaders who have put their names to the missive include Keith Cochrane, chief executive of Weir Group (one of Scotland’s largest engineering firms); Archie Bethel, who heads up Babcock international’s marine division; the executive vice president of BG Group Sir John Grant and the chief executives of Thales UK, Aggreko, and BHP Billiton.

Perhaps tellingly, the letter also boasts a large number of signatories from entirely Scottish owned firms including a number of distilleries, Harris Tweed Hebrides, Tunnock’s and MacTaggart Scott (a major contractor to the MOD) which has today issued its own statement warning that “the risks of separation far outweigh the benefits.”

Although it is undoubtedly the business world’s most significant contribution to the debate so far, the letter does echo concerns that have been rumbling throughout industry for some time.

Earlier this year, ADS group – the trade body for the UK’s aerospace and defence industry – voiced fears over the impact of an independent Scotland on the sector’s international influence, and future export opportunities. Members are also reportedly concerned over the prospect of costly reshuffles to their supply chains, many of which straddle the England Scotland border.

There are also arguably even more significant worries over what Scottish independence might mean for the UK’s energy sector.

From the untapped oil fields to the West of Shetland, to the country’s enviable wind, hydro, wave and tidal resources Scotland’s energy sector is viewed as a trump card by the “yes” camp.

Sullom Voe Terminal is currently being upgraded to cope with oil and gas from the reserves west of Shetland

Source: BP

Sullom Voe Terminal is currently being upgraded to cope with oil and gas from the reserves west of Shetland

But despite this position of strength, it’s questionable whether an independent Scotland could continue to support this growth.

Scotland currently receives around 28 % percent of the UK’s total renewables subsidy, and substantial government support for the development of the hard-to-reach deep-water reserves on the edge of the UK continental shelf. And there are genuine concerns across an industry that supports huge numbers of Scottish jobs, that an independent Scotland would be unable to maintain this level of investment.

Indeed, earlier this year the UK government’s Department for Energy and Climate Change (DECC) warned that without access to a wider GB market the costs of supporting investment would fall solely on Scottish bill-payers at a potential annual cost of £189 for each household.

The debate is still alive – and there are no doubt some decent arguments that Scottish independence will be good for business. But it’s fair to say that thus far the pro-independence lobby has failed to make this case.

Responding to today’s letter, Business for Scotland - which supports independence and claims to represent 2,500 Scottish business - maintains that independence is in the best interests of business, but offers little beyond vague assurances that an independent Scotland will be better placed to exploit opportunities for growth. Such claims look unconvincing when placed alongside the concerns of some very large businesses that employ lots of people and generate lots of money. And the pro-independence lobby is surely going to have to do better if it’s to convince Scottish voters to say “yes” on the 18th September.

Please do let us know what you think Scottish independence might mean for industry and the wider economy? And while you’re at it, cast your own vote in our online poll.

Readers' comments (10)

  • A "yes" vote would be a disaster for Scotland and would reduce the prestige, influence and effectiveness of the remainder of the UK. Why leave a perfectly serviceable castle to set up home in a tent in the carpark? I really can't see it I'm afraid...

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  • With the status Great Britain has in the world it would be a huge political mistake to downgrade ourselves by splitting up. Our Influence in world politics must be maintained

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  • The economic effects of the numerous uncertainties are without doubt the major downside to the Yes-vote. It would be a sad day for everyone in the UK if Scotland were to vote "Yes".

    However, given the increasing North / South divide discussed in previous articles, separation from the London government cannot be a bad thing for anyone outside of "London" and I think that would swing me.

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  • I heard one of my arguments for a 'NO' vote voiced on Radio 2 today by a fellow Scot.

    Scotland was allowed access to the Pound in 1707 when they had screwed up so badly, financially and politically that they almost sold themselves to the English. Indeed a sum of £398,085.10s – was guaranteed to be paid to various Scots in office or holding influence in parliament to cover the future cost to Scotland of taking on English debt.

    So Scotland was paid to take on English debt, therefore Alex Salmonds contention that he does not need to take responsibility for Scotlands share of our national debt if a monetary union isn't maintained is entirely false.

    The man is a megalomaniac and will risk Scotland for his own egotistical means.

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  • Anon is at it again!
    Status -might have been of interest/value and worth doing something to retain/maintain, when Westminster would send a gun-boat to deal with uppity locals within the Empire: but...
    Our status and influence in the present and future eras of technology has to be primarily financial, economic, (the result of industry and commerce)and in retaining the respect of the leaders of our 'peers': those Nations which have embraced technology as the vehicle to the future. The modern equivalent of gunboats (and I am sure that -elephant in the room - is what 'anon' is really concerned about) is simply a vehicle for bigger boys (and a few girls) toys.
    Mike B

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  • There is absolutely no doubt that Scotland could be a viable nation after independence. The real issue for me is that, other than fulfilling Nationalist pride, there are no sound economic, social or political advantages for the people of Scotland.
    The constant scare stories such as ‘the NHS will be dismantled if we don’t go independent’ are just that – scare stories. Similarly, the argument that ‘Mrs Thatcher and the Tories caused the de-industrialisation of Scotland’ also ignores the actual facts – but then facts never did count for much in political arguments. And as for currency union, no UK Government would dare to sign up without a referendum of ‘rUK’ which would almost certainly vote ‘no’.
    The sad fact is that the ‘yes’ campaign have let the Nationalist genie out of the bottle and the animosity generated will take a long time to fade away.

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  • I am proud to be a graduate in Engineering of a Scottish University ( indeed like our next-but-one King and Queen the lady who did me the honour of becoming Mrs B and I are Uni-weds. I have enjoyed many projects in my 'textile' industry working in that lovely country. [From advising on the machinery types that weave Harris Twee, to utilizing the machinery -suitably modified- that processed jute (making, in its boom era (1850s onwards), Dundee the richest city in the Empire) to process pure pitch-based carbon fibrils to be used as an ablative on missile re-entry and as a possible repair to the Space Shuttle.

    I do not have a vote.

    Unless I am mistaken, we are a democracy: and the wishes of the majority surely supersede all other considerations. Didn't Ghandi point out at the time of agitation for Indian Independence that whilst he recognized that there were many obstacles and problems, each society sought to make its own mistakes and correct them in its own way?

    Whatever is decided, by those entitled to do so, we surely respect their choice. I believe it was Mr Churchill who indicated that his view was that Democracy was inefficient, silly, wasteful, and probably the worst form of Government....except all the others.

    Mike B

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  • What prestige?. Humiliated in Iraq and Afghanistan.

    when the treaty of union came into force in 1707 the
    national debt for every person in increased by 11 times
    because of the costs of the wars with Louis XIV.
    The Darien debacle was small beer compared with the
    South Sea Bubble which bankrupted England for a

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  • On the question of democracy. It is estimated that turnout for the referendum may be 80%. On that basis 40% of those elligable to vote could be enough for independence. So as few as 1.7 million people will have changed the lives of not just the majority 3.5 million who did not vote for it, but also the 58 million countrymen who had no say. This is not democracy!

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  • Jeans-Jaques. You are being very selective with your history as is always the case in such arguments. It is very easy to find ups and downs in history to illustrate ones point. My personal opinion is that over the 300+ years of the union the mutual benefit has far outwayed the low points. Furthermore I firmly believe that the United Kingdom has much more to offer the world and ourselves in the future if we stay together.

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