Scottish Independence: Good or Bad for your Business?

On the 18^th of September 2014, voters in Scotland will make the decision to either stay a part of the United Kingdom, or become an independent Scotland. Each option has its own merits and detriments, even on the side of the English, Welsh and Northern Irish observers.

The potential effect on business in both the UK and Scotland is unclear. There are already a variety of opinions on the matter, both in support of Independence and criticising it. As the deadline for voter registration looms, we look at some of the most prolific arguments for and against from the perspective of UK businesses.

Air fares

British Airways CEO, Willie Walsh is positive about independence, citing suggestions from the Yes campaign about abolishing air passenger duty. This would be a big bonus for international airline like BA. Equally Michael o’ Leary of Ryanair has spoken out about the same issue;

‘There’s no doubt that most airlines would support the position of the Scottish government in relation to abolition of the APD (air passenger duty), which does untold damage to Scottish tourism.”

Scottish Tourism

There is a hope from some that the cultural pull of Scotland for tourism will increase as a result of independence, as an independent Scotland could have a stronger international identity. Scotland’s heritage and legacy worldwide is not to be underestimated, with large numbers of people in former commonwealth nations claiming Scottish ancestry as a reason to visit.

Statistics from research by VisitScotland.org show a significant increase in international tourism in the first quarter of this year, though no vote campaigners claim the increase can be attributed to the pull of the Commonwealth Games in Glasgow this summer. Unfortunately, neither side will know for certain until next year, after the independence vote.

Education

Currently, if you treat Scotland individually as a nation, it is the most educated in Europe. With 45% of the nation educated to tertiary (degree) level. In Scotland, compared to the rest of the UK, education to this level is free, which may account for its academic success. Interestingly, the next on the list is Finland, who also provide free higher level education and have a similar national population to Scotland.

The argument from NO campaign voters is that this Scottish education was supplemented by taxpayers from across Britain, and that an independent Scotland would not be able to continue offering Scottish citizens free higher education. The reply from Yes voters is that it is the quality of Scottish institutions that gives them the edge, rather than the funding or the number of Scots holding a degree.

Oil and Fuel

The consensus from oil and fuel companies is against the Scottish Yes vote. With new borders come new taxes and legislations and a large number of oil resources fall within Scottish waters. It is natural for oil companies to have their quibbles when it comes to an independent Scotland, as it will inevitably mean less control over Scottish oil supplies and higher expense for their businesses. On the YES side, some sources have indicated that had Scotland become independent in the seventies, when the first devolution referendum was held, they would currently be out of debt and, if anything, more economically self-sufficient.

Much of the Yes campaign’s argument, with regards to oil, is based on the example of Norway, and the way they invested the money generated from their own oil supplies. By investing funds in a sovereign wealth fund, Norway has managed to raise a considerable amount of money for future generations to utilise. An independent Scotland hopes to use its own North Sea oil reserves to emulate this.

Initially the UK political opinion was that the outcome of the vote would be a no. However, with the Yes campaign gathering momentum, the outcome is becoming increasingly hard to call.

It’s very hard to see past the vested interests of individual businesses with regards to the vote. In the case of many companies, the major concern is uncertainty. With the union in place businesses can see their future more clearly and plan for it accordingly. The Yes vote is a risk but whether it is a risk worth taking remains to be seen, for many voters from Scottish businesses.

Where do you sit? Take our survey Independence survey here