Fencing around the devolution debate

Industrialists do not want to get involved in the politics of the Scottish referendum

How Scotland’s chief executives decide to vote in next Thursday’s referendum on the Scottish Parliament is clearly a personal matter, but whatever the result it will have an impact on industry.

Scotland’s industrialists are split over the pros and cons of Scottish devolution, but most – except for a few notable exceptions – have kept a low profile in an effort to avoid becoming embroiled in the wider political debate.

Scottish Engineering, the Scottish association of the Engineering Employers’ Federation, with 350 member companies covering mechanical and electrical engineering, says it is taking an apolitical line. But on a purely economic level, it has come out in favour of the no vote. It says it cannot see any economic benefit to devolution.

The first vote in the referendum – for a Scottish Parliament – would give the new body the right to change the Uniform Business Rate. It would also have the power to devolve this right to local councils.

Scottish Engineering fears that these councils – which it says are mainly Labour controlled – would more than likely rate social issues over economic ones and would treat industry as a source of easy finance.

Howard Jordan, chief executive of Scottish Engineering, said: ‘For a number of years we sought a uniform business rate to allow our industry to compete on more level terms with the rest of the UK and we welcomed its implementation.

‘We fear that a return to a position where local councils levy their own business rates could be detrimental to the engineering industry’s competitiveness in Scotland.

‘In the past we have seen councils treat their business rate payers as a milch cow, to the detriment not only of local businesses but of the engineering industry throughout Scotland.’

The association’s next fear concerns the second vote which would give a Scottish Parliament the right to increase or decrease income tax by up to 3p in the pound.

‘It is felt that Scottish engineering companies would find great difficulty in attracting skilled labour from the South if they had to bear an additional tax burden,’ it said in a statement. ‘The great fear is that additional income tax would have to be met with a compensatory rise in wages.’

Jordan commented: ‘We have been seeking for some time now to identify some advantage for our industry through a Scottish Parliament and we have so far failed to do so. Here we have examples of positive disadvantage.’

The view expressed by Scottish Engineering, although ratified by its 42-strong council, cannot be said to represent all of its members. And the outcry which accompanied comments by Iain McMillan, director of CBI Scotland, who was said to have claimed that there was widespread business opposition to a Scottish Parliament with tax raising powers, further underlines this point.

On the other side of the devolution fence is Scotland Forward, a pro-devolution pressure group. It said: ‘Business has nothing to fear from a devolved Scottish Parliament, and much to gain.’

Member of the group, Alan Gemmel, general manager of Mitsubishi Livingston, said: ‘As an inward investor I can confidently state that Mitsubishi will continue to thrive in Scotland with the establishment of a Scottish Parliament with tax-varying powers.’

Nigel Smith, Scotland Forward under-chairman and managing director of David Auld Valves, has produced a document called The Business Case for Scotland’s Parliament.

The document points to the strengthened voice a Scottish Parliament would give the country in Europe and claims a ‘yes’ vote would place Scotland on a par with Catalonia, Baden-Wurtenburg, Rhone-Alpes and the other major regional players in Europe.

It also says the new Parliament would bring continuity, which is the thing ‘business wants most from the political process’.

The proposed electoral system for the Scottish Parliament it says ‘promises a political environment that will be more consistent, less adversarial and less indulgent of extreme views than Westminster.’

The paper also says that as important functions will be controlled, not by Government, but by powerful parliamentary committees charged with hearing and heeding the widest possible range of information and opinion, ‘the business community will, inevitably, be a highly influential voice within this process’.

It adds: ‘The Parliament’s devolved powers will include responsibility for a number of areas which bear directly on business: economic development policy, land use, planning, transport, education, health and training.’

A devolved Parliament would also be able to provide informed input to such bodies as the Bank of England, the Monopolies and Mergers Commission and the International Maritime Organisation.

With a few exceptions, such as the firm ‘no’ from Lord Weir of Weir Group, industrialists in Scotland have been conspicuous by their absence in the public debate.

Economic arguments are often overshadowed by emotive and political considerations and the debate – or lack of it – on Scottish devolution has been no exception.