More than 8 in 10 bosses want Scotland to stay in the UK, according to a recent survey of roughly 2,400 firms in England, Wales and Northern Ireland - half of which do business in Scotland. Only 11% of firms supported the idea of Scotland becoming an independent country. More than 50% firms outside of Scotland do not see any opportunities with independence:
- 63% of companies surveyed express that no new opportunities would emerge for their businesses if Scotland splits from the United Kingdom.
- Only 6% of firms believe that potential tax savings (due to different tax rates between Scotland and the rest of the UK in the case of independence) would be an opportunity for their business.
- The top challenge identified by businesses, if Scotland votes for independence, is future currency arrangements and the highest risk involved is trading across borders.
The Currency Issue
As the referendum date gets closer the row over which currency would be used in an independent Scotland escalates.
John Longworth, leader of the British Chambers of Commerce, which carried out the survey notes that “Companies outside Scotland are less than captivated by the intense debate unfolding north of the border”. He then went to add: "In the event of a yes vote, cross-border training and currency arrangements loom large in businesses’ thinking. If Scotland votes ‘no’, constitutional questions remain around the devolution of power and the distribution of public funding between nations. One thing is for certain. Regardless of how Scotland votes in September, things will never be quite the same again".
Meanwhile, a third of businesses outside Scotland favour a formal currency union between the UK and Scotland if Scottish vote for independence. On the other hand, 28% of respondents said Scotland should create its own currency, 18% said it should join the Euro and 8% said it should retain Sterling but not join a formal currency union if Scotland opts for independence.
The Independence Debate and its Impact on Businesses
An overwhelming 91% of bosses said the independence debate had no impact on business decisions so far, although 11% of firms reported the debate having a negative impact on sales, compared with 5% in August 2013.
BP’s boss Bob Dudley warned that the prospect of Scotland becoming independent involves big uncertainties for his company which continues to invest in Scotland. "We have a lot of people in Scotland. We have a lot of investments in Scotland. My personal view is that Great Britain is great and it ought to stay together".
Similarly, BlackRock’s manager, believes that Scottish independence would bring "major uncertainties, costs and risks". The New York based firm which handles trillions of financial assets agrees that the prospect of developing a currency union between an independent Scotland and the rest of the UK “looks infeasible” and would bring risks to both countries.
The chief executive of clothes and homeware retailer Next, Lord Wolfson said Scottish independence would have no significant effect on the company’s management system. For the company, the independence debate is not seen as a business issue. Wolfson underlines: "I don’t think it would make any difference. We manage our business in Eire how we manage in the UK”.
British Airway’s Boss views Scottish independence as a positive development for his company. According to him, "if anything, it might be marginally positive because I suspect the Scottish government will abolish air passenger duty, because they recognise the huge impact that that tax has on their economy”. The Scottish government has pledged to reduce air passenger duty by 50% if it gains independence, a fact which undoubtedly favours Britain’s national career.
All in all, the overwhelming majority of firms outside Scotland want the country to continue being part of the United Kingdom, as the potential of independence would complicate currency arrangements and bring about big uncertainties to companies investing in Scotland. What is your opinion on this hot topic? Are firms right not to want Scotland’s independence? Comments please…