Indyref2: Business reaction to Nicola Sturgeon speech

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Business leaders have been reacting to First Minister Nicola Sturgeon’s announcement that she will seek the power to hold a second independence referendum between autumn 2018 and spring 2019.

• READ MORE: Scottish independence: Nicola Sturgeon to seek Indyref2

First Minister Nicola Sturgeon confirmed that the Scottish Government will draw up legislation for a second independence referendum. Picture: Contributed

First Minister Nicola Sturgeon confirmed that the Scottish Government will draw up legislation for a second independence referendum. Picture: Contributed

David Watt, executive director of the Institute of Directors (IoD) in Scotland, said: “Not many in the Scottish business community wanted Brexit, and equally, few want a renewed independence referendum, and the associated continuation of uncertainty which has had such an impact on the ability of businesses to move forward with their plans.”

He added: “The modern world presents a multitude of opportunities for businesses to innovate and prosper, and this rather than constitutional arguments is the preferred focus of IoD members. However, if the political will is to move forward with another vote, business will react appropriately and continue to face up to the challenges that such political activity presents.”

• Indyref2: Nicola Sturgeon’s speech in full

Meanwhile, Wood Group chief executive Robin Watson said that the prospect of a second independence referendum would have “no bearing” on the Aberdeen-based energy services giant’s £2.2 billion deal to buy rival engineer Amec Foster Wheeler.

The more that can be done to mitigate the duration of this uncertainty for business, the better

Liz Cameron

During a speech at Bute House, Sturgeon said today: “We face a future, not just outside the European Union, but also outside the world’s biggest single market.

“The Prime Minister and her government have been given every opportunity to compromise. I cannot pretend to the Scottish people that a compromise agreement looks likely.”

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In response, Andy Willox, Scottish policy convenor at the Federation of Small Businesses (FSB), said: “FSB survey work conducted after last year’s Scottish Parliament elections, but before the poll on Europe, revealed very little appetite amongst smaller firms for another independence referendum.

IoD Scotland executive director David Watt said there was little appetite in the business community for another referendum. Picture: Neil Hanna

IoD Scotland executive director David Watt said there was little appetite in the business community for another referendum. Picture: Neil Hanna

“Of course, there’s a lot more going on now – in terms of faltering confidence and rising costs – than there was last May. What we don’t know is if these changes have shifted views one way or the other, but I daresay that will become apparent in the weeks and months ahead.”

Liz Cameron, chief executive of Scottish Chambers of Commerce, welcomed the First Minister’s signal that the Scottish Government would continue to engage with the Brexit talks, saying it was “crucial” for Scotland to have a voice at the centre of the process.

She added: “Scotland has been through two referendums and two major elections over the past three years, and there is no doubt that this period of continual uncertainty has had a material impact upon businesses in Scotland. These are real and present business issues that are affecting business decisions and investment.

“A further referendum on Scotland’s independence would be no different, and the more that can be done to mitigate the duration of this uncertainty for business, the better. The Scottish Chambers of Commerce network will continue our process of engagement with businesses across Scotland to understand how this prospect could affect them and how their voices can be most effectively articulated during this process.

“In the current circumstances, businesses need as much certainty, stability and confidence as possible and it is the role of our governments to provide it. The message from Scottish Chambers of Commerce members has been clear and consistent – our priority must be to create the conditions that will enable businesses to thrive.

“That means focus and resources must be directed towards greater strategic infrastructure investment, developing the skills we need to sustain growth, fair business taxation that does not limit entrepreneurship and investment and clear guidance on entering and trading in overseas markets – all of which must have a clear evidential basis. These are the priorities for business and must be for our governments too.”

Responding to Sturgeon’s announcement this morning, David Lonsdale, director of the Scottish Retail Consortium (SRC), said: “The retail industry is going through an unprecedented period of transition as it adapts to changes in consumer behaviour and technological innovation.

“The fundamental nature of this change means retailers are very conscious of economic and political events which can further affect their businesses. If there is to be a further referendum on Scottish independence then there will be an undoubted thirst for clarity over what it all means and what the ultimate economic impact will be.

“The SRC will seek to consult and work with our members to help them better understand what the implications are for the industry and for their business, staff and supply chain, and crucially for their customers.”

Meanwhile, Scottish Council for Development & Industry (SCDI) director of policy and place Claire Mack said the organisation “has always been neutral on Scotland’s constitutional relationship with the rest of the UK, and should a second referendum be held, we will once more seek to facilitate constructive discussions and publish impartial evidence for and on behalf of our members to inform that debate”.

She added: “In SCDI’s ‘Future Scotland’ reports ahead of the last independence referendum, SCDI explored issues across the macroeconomic and fiscal, Europe and international, and energy spheres. Many of the issues raised across those reports remain key areas where answers are needed. Indeed, following the UK’s decision to leave the EU, many of those issues will be more important than ever at this time of unprecedented change.

“Global changes are placing an even higher premium on sustaining and generating increasing economic growth, and it is vital that as we enter any new debate around Scotland’s constitutional future, we ensure constructive debate around the key economic issues.

“At SCDI’s forum being held later this week we’ll be considering many of the global economic changes we face and issues around trade and investment as the UK reshapes its relationship with the EU.”

Dean Turner, economist at UBS Wealth Management, said Sturgeon’s plans for a second independence vote hinge on “the fear that the Scottish people’s concerns are being overlooked in the UK’s Brexit negotiations”.

“Yet for an independence referendum to result in a different outcome three years on, Sturgeon will need to provide greater clarity on the economic challenges an independent Scotland may face,” he added.

“While Brexit has, of course, added a new dimension, the economic concerns that led the majority in Scotland to vote to remain a part of the UK have not disappeared. Scottish GDP lags behind the UK and declining oil revenues have raised questions over the fiscal sustainability for an independent Scotland – especially if it intends to retain the pound. While EU membership may provide Scotland with a preferable trade agreement, carving a new membership would be no mean feat and the UK still remains Scotland’s largest trading partner.

“Market reaction to Sturgeon’s speech has been muted so far, most likely because she still has a long way to go to achieve approval for a second referendum and the announcement was well-flagged. Yet if approval becomes increasingly likely, we expect volatility in sterling to rise.”

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