Open Letter

Q&A on the financial implications of independence

August 29, 2014 Comments (0) Views: 1856 SRS Research 2014

Why business leaders are saying No to independence

Archie Bethel, Chief Executive, Babcock International

“If the Scottish independence referendum to be held in September 2014 results in a majority vote in favour of independence, the consequences for the group’s businesses cannot be predicted with certainty. Regardless of the ultimate impact, there is likely to be a lengthy period of uncertainty which may itself have adverse consequences for the group’s business, financial condition, operating results or prospects. There may also be a medium-term knock-on effect on the nature, timing and scope of the policies and procurement plans of the UK, especially in defence terms. The potential adverse impact includes:

– a significant long-term reduction in revenue at HMNB Clyde and the inability to win contracts for the Royal Navy at Rosyth

– a reduction in demand for offshore crew-change helicopter services due to less investment in the North Sea

– new Scottish regulatory and ownership regimes for the rail and nuclear industries and the aviation sector (plus health and safety as a whole) may have consequences for the Group’s rail and nuclear businesses in Scotland and the North Sea.”


Hugh Andrew, managing director, Birlinn Limited

“Some years ago I could have been tempted to vote for independence. Since then – apart from working on the Liberal Democrat Campbell Commission which opened my eyes to the sheer complexity of disentangling what is a completely integrated state, and further revealed how the vast bulk of issues raised by nationalists can be dealt with within a reformed settlement – I have watched with astonishment the willingness of nationalists to say and promise anything to achieve their ends. From a refusal to accept the fiscal crises engulfing the UK where Scottish banks were saved by Westminster, to the utter irresponsibility of debt default based on a spurious claim to ownership of sterling. I have seen nothing which indicates that those who advocate independence have any willingness or any intention of facing up to the real challenges of their position. Time and again we have asked questions of the nationalist proposition. There has been no engagement, no willingness to listen. I, the business I have built up, the loyal staff who work for me are merely collateral damage in the nationalist cause, a cause built not on hope but on cynicism and manipulation.”


Jimmy Buchan, owner Amity Fish and star of BBC’s Trawlermen

“The aspiration and idea of independence has at times excited my imagination, who would not consider it. However the need for a strong and robust economy far out weighs the risks with breaking up the UK and not knowing what the currency would be and what the interest rate would be set at and by whom? As a business man that operates with bank borrowings I need to have the security of stable interest rates that can compete at least in a European market. Negotiations after a vote is not a risk I’m prepared to take after a lifetime building up my business.”


Tessa Hartman, managing director, Hartmann Media Ltd

“In my view, there are too many anomalies to sustain the future of a Scottish fashion industry in an independent Scotland. From the lack of investment in our textiles sector, uncertainty of currency, particularly the textile industries that rely on the export market and managing foreign exchange risk to the future of our high streets and support for emerging talent. Where would that come from? Scottish and British fashion are better together, retaining the identity of British fashion to continue to reap the benefits of its £21 billion that fashion contributes to the UK economy and for the security of the 235,000 Scots who are employed in retail. We need to align our talents in Britain to continue to overcome the recession, address the issues of global competition and sustainability working alongside the British Government and other stakeholders like the British Fashion Council and of course the high street retailers. It just doesn’t make business sense to sever ties with such an impressive British fashion legacy. The Scots have played a significant part in it’s evolution from our precious fabrics, yarns and textiles to our fashion designers, many of whom are leading the way in the carousel of global catwalks today. International designers continue to seek inspiration from our Scottish heritage and fabrics and season after season we witness a tartan frenzy within collections manufactured from Scotland. But the reality we are thriving being part of Britain as we simply don’t have the resources or support to go it alone. The British fashion industry is one of the most exciting, vibrant and innovative sectors in the country. Its reputation is revered and envied around the world and its heritage has literally defined decades through the centuries. The Scots stand tall alongside them, proud of our achievements, showcasing what we can do together. I cannot imagine being excluded from future ‘British Fashion’ exhibits or trade missions – quite frankly Scottish fashion without Britain would come apart at the seams.”


Douglas Ferrans, former chief executive, Scottish Amicable Investment Management and former Chairman of the UK Investment Management Association

“The UK savings industry, and its customers in Scotland, are protected by a regulatory regime and financial infrastructure that is the envy of others throughout the developed world. Whilst in an iScotland we can always replicate central banks, regulatory bodies, compensation schemes and the other complex and sophisticated safety mechanisms for savings, investment and pensions there would undoubtedly be huge and as of yet unquantified additional costs. These necessary costs ,many of them fixed in nature, would be spread over a smaller population and paid for by ordinary savers, investors and pensioners leaving them worse off.”


Bill McFarlan, broadcaster and managing director, The Broadcasting Business

“I speak as a Saltire-waving passionate Scot…who’s followed the frequent downs and occasional ups of Scottish football and rugby over the past 40 years.

“What I want for my three children and two grandchildren is a Scotland that offers them the same opportunities – and more – that I have enjoyed as a business owner for 25 years and broadcast journalist for 35.

“I can see the attractiveness of the notion of independence. That’s why I started this journey leaning, if anything, towards voting YES.

“But, as I’ve looked at the key issues – the biggest of which is financial stability for the country – I can come to only one conclusion.

“ In Scotland, we have three verdicts in a criminal court case: guilty, not guilty and not proven.

“To me, the case for independence is NOT PROVEN. To make a decision of this magnitude, the financial case has to be overwhelming. I find it confused and based heavily on supposition.

“For that reason – for the future success of my children and grandchildren – I will say NO THANKS. I believe the UK’s financial stability is greater than what can be proved about Scotland’s.”


Alan McFarlane, senior partner, Dundas Partners LLP

“I am voting No on September 18th to say yes to the best future for the UK, for Scotland and for its people.

The longer this campaign has gone on the more I have become convinced that we’re better together in a united Britain. According to the Yes campaign we have nothing to fear except the status quo, that the ‘Westminster system’ is utterly incapable of making good decisions and that ‘social democratic’ Scotland is handcuffed to and therefore handicapped by the reactionary ‘rest of UK’. Further, the actual business of disentangling Scotland from the union is presented as a minor administrative matter, something to be achieved by amicable discussion over a cup of tea.

The referendum poses one simple question – do our individual and mutual prospects improve by drawing a constitutional dividing line between Scotland and the rest of us? The question answers itself. Our economic, social and environmental futures are inextricably intertwined and so our constitutional and political arrangements have to recognise and embrace this. Power has already been devolved to Holyrood and the other parliaments. More is coming with significant new responsibilities, including taxation, already agreed. Britain is changing away from an over-centralised state towards a modern federation, something I welcome and believe offers an excellent foundation for our future prosperity. A new Hadrian’s Wall is the last thing we need.”


Alastair MacMillan, managing director, White House Products

For 300+ years the United Kingdom of Great Britain has stood out as a beacon of stability whilst virtually every neighbour across the seas has suffered coup, junta, dictatorship, invasion and revolution. I find it quite unbelievable that my fellow Scots should even consider destroying the stability of the United Kingdom for what equates to some vague aspirations akin to a General Election manifesto. I also fail to understand, when in many ways people of Scottish descent play a disproportionately large part in running Britain that the Scots should have any wish to create an international border at Gretna and limit their influence to only a small part of our already small island? I also hope that those voting Yes realise that independence is not just for Christmas and that once broken the Union can’t be put back together again. This is a fork in the road and on the one pointing to independence there are no roundabouts ahead !


Terry Scouler, Chief Executive, EEF – the manufacturers’ organisation representing industry in the UK (

“Many businesses are now setting out their concerns, putting their heads above the parapet and saying why they are opposed to an independent Scotland. Many others are telling me privately that they are against any suggestion of Scotland ejecting itself from the UK. The enemy of investment and stability in business is uncertainty. While the economic risks around independence are not fully quantified, they do represent a significant gamble.
The debate on Scotland’s future echoes some of the issues the UK now faces in the debate over membership of the EU. It is essential that we remain a part of the EU, influencing from within, and discussing how we improve that relationship. Equally, it is essential for the UK to remain as one as a nation, while benefitting from the richness and strength of the diverse nations within the kingdom.
I personally think both sides would be the poorer in every respect if Scottish people choose independence.”


Mark Coulter, Coulter Property

“The impending referendum for Scottish Independence has had a big effect on businesses confidence and it seems decisions on immediate investment and commitment in Scotland have either been shelved or put on hold until the political and economic climate becomes more clear.
What is without question is that the continuing uncertainty and cloudy political debate is undoubtedly having a negative effect on the housing market in Edinburgh with numbers of viewings, instructions, and offers all down on levels which were being witnessed in April & May of 2014. Markets don’t like uncertainty and the property market is no exception and this slowdown will becoming more acute leading up to September the 18th.
It’s not all doom and gloom however, the market still remains healthy but there is hesitancy from buyers and sellers which is understandable given Scotland is about to make its biggest decision in over 300 years.
The big question is, what will happen in the result of a ‘Yes’ or ‘No’ vote. Given the fragile recovery of the housing market which only a little over a year ago was being talked about as a triple dip recession caution must be exercised.
The outlook of uncertainty caused by a ‘Yes’ vote can’t be underestimated. A minimum of two years of currency negotiations, pension uncertainty, EU membership, interest rate rises, not to mention the potential relocation of Standard Life, HBOS, Blackrock etc can’t be a positive to the property market.
The outlook of potential certainty caused by a ‘No’ vote can’t be underestimated either. The pent up demand and deferring of decision making leading up to the referendum will undoubtedly lead to a short term spike in activity which will probably be felt up to Spring of 2015. This will continue the momentum we have experienced from May 2013 onwards, and it could be argued that this I what the property market needs as the current stagnation possibly threatens to derail the recovering housing market and effect the wider economy.
The next few months are certainly going to be interesting for Scotland and the future prosperity of the nation and housing market. Think very carefully before you vote as the repercussions will be felt in all markets. Your decision once it is made will be irreversible, and there are a number of uncertainties which are causing great anxiety and with good reason.
In this debate the heart should rule the head and pragmatism should lead over idealism!”

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