Big business warn against Scottish independence

Julien Mivielle
Glasgow residents display their support for a "No" vote in the upcoming referendum on independence on August 19, 2014
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Glasgow residents display their support for a "No" vote in the upcoming referendum on independence on August 19, 2014 (AFP Photo/Andy Buchanan)

London (AFP) - British business leaders on Wednesday warned against independence for Scotland, saying the uncertainty it could trigger over future policies is "bad for business".

Top executives at banking giant HSBC and miner BHP Billiton were among over 130 signatories of an open letter published in The Scotsman newspaper, arguing "the business case for independence has not been made".

"The United Kingdom gives business the strong platform we must have to invest in jobs and industry," said the letter, which was also signed by bosses from clothing maker Harris Tweed Hebrides and whisky firm William Grant & Sons.

It raised doubts about what pensions, taxes and regulation as well as support for exports would look like under an independent Scottish government.

It also doubted Scotland's prospects of joining the European Union, after European Commission leader Jose Manuel Barroso said that scenario would be "extremely difficult".

"Uncertainty surrounds a number of vital issues ... and uncertainty is bad for business," the letter said.

Many big companies are nervous about what they see as a leap into the unknown, even though some Scottish business leaders can see advantages in having a government which is closer to their concerns.

For months in the run-up to the vote on September 18, the pro- and anti-independence campaigns have argued over the economic effects of independence for Scotland versus continued membership of a political and monetary union dating back to 1707.

"I think that it is fair to say that business people don't know what to expect," said Professor R. Bradley MacKay at Edinburgh University business school.

The government in London has said an independent Scotland will not be able to carry on using the British pound within a monetary union, as the independence movement wants.

But Scotland's pro-independence First Minister Alex Salmond insists London would be forced to alter its position in negotiations following a "Yes" vote and has threatened not to take on any of Britain's existing debt if a currency union was refused.

- Many questions to be answered -

The role and future of oilfields off Scotland and their revenue streams have been another source of controversy.

The heads of oil groups BP and Shell have argued openly for Scotland to vote "No", while those in favour of independence see the oil reserves in the North Sea as underpinning prosperity.

But there is debate between the two sides about the extent of the oil and gas reserves and how long they will last.

Scotland's whisky industry is also worried.

The multinational Diageo drinks group, which owns the Johnnie Walker brand and also select labels such as Lagavulin and Talisker, said there are "many questions to be answered".

Diageo, which is investing the equivalent of 1.25 billion euros ($1.6 billion) over five years in its distilleries in Scotland, has said it would be concerned about any outcome which increased costs, complexity or uncertainty.

Some other big groups, such as the Edinburgh-based insurance group Standard Life, have threatened to pack up and leave if Scotland votes for independence.

But independence campaigners attack what they see as an unduly alarmist picture painted by their opponents to frighten voters.

They envisage the creation of a small but prosperous democracy along Scandinavian lines, led by politicians who are more responsive on issues of concern to their electorate.

At Datec Technologies, a leading European electronics recycler based southwest of Glasgow, chief executive Doug Norris said a "Yes" vote would benefit small and medium-sized businesses.

"Many people like me in the SME sector really have no chance of influencing that. The business policy set in London are influenced by the big businesses, the banks, the financial sector and so on," he said.