CBI steps up fight for UK single market

A POWERFUL defence of the economic and business benefits of Scotland staying in the union will be delivered this week by the head of Britain’s biggest employers’ lobby group.

John Cridland, director-­general of the CBI, will tell one of the biggest gatherings of business leaders that the clear ­majority of his members in Scotland, England and Wales believe the single British market is too important economically to be given up lightly.

He will stress that it is for the Scottish people to decide whether to separate from the UK, but that the CBI, representing 240,000 businesses, does have the right to air its concerns about the potential economic threats to “the glue that holds us together”.

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He will tell the annual dinner of CBI Scotland in Glasgow that the economic benefits of an independent Scotland remain arguable. He is expected to emphasise previous warnings made by his Scottish colleagues that a fragmentation of the UK company taxation and regulatory systems could pose threats to business stability on both sides of the Border.

Speaking ahead of this Thursday’s event, he said: “The decision on Scottish independence is a matter for Scottish voters. We should not talk on constitutional matters. But we are entitled to express a view on the economic implications of political matters.

“I believe the economic case for independence has not been met. There are considerable benefits that UK business would lose.”

He added: “If you get a progressive fragmentation of tax rates and regulatory standards you weaken the single market.And CBI members in Scotland by a large majority see the benefit of maintaining the single market in the UK. It’s a strength for businesses north and south of the Scottish Border. There would be a loss for [UK] business if we saw a fragmentation. Just because we don’t deal with constitutional matters, it does not mean we are silent.”

CBI Scotland’s concerns over independence are well-stated but the intervention by the organisation’s highest office holder will heighten tensions between business and the Scottish ­National Party. Iain McMillan, director of CBI Scotland, said: “The position of CBI Scotland is that we have yet to be convinced that Scotland seceding from the UK would have economic benefits. I agree with John that while the constitutional decision is solely for the voters it is perfectly legitimate for the CBI to talk about economic benefits and risks.”

Cridland’s visit to Scotland comes amid continuing strong economic headwinds in the UK, typified by the government’s austerity programme, consumer caution and the ­continuing crisis for the Eurozone. The CBI last week said it expected the UK economy to shrink by 0.3 per cent compared to a previous forecast of 0.6 per cent growth.

The organisation, whose members employ a third of Britain’s private sector workforce, also cut its economic growth forecast for 2013 to 1.2 per cent, against a previous forecast of plus 2 per cent.

Cridland is also expected to tell CBI Scotland members that the organisation backs Chancellor George Osborne’s public deficit reduction programme, but believes there needs to be faster delivery of needed infrastructure investment before the coalition government’s initiatives can be called “a Plan A-plus”.