Scottish independence: Aggreko warns of risks

Temporary power generation firm Aggreko has warned of the risks of independence. Picture: Complimentary

In its preliminary results, the company, which specialises in supplying electricity power generators, has warned that its administration costs could rise and the company would have to be split into separate entities.

According to the company, which employs around a tenth of its 5,749 worldwide staff in Scotland, the SNP’s currency and EU plans pose risks, which could lead to years of uncertainty.

Aggreko’s outgoing chief executive Rupert Soames has been a prominent critic of Alex Salmond’s plans to leave the UK.

The company’s intervention in the constitutional debate came the day after Lloyds Banking Group, Barclays and Shell all warned of their concerns over the potential negative impact of independence.

Last week, RBS claimed that independence could damage its credit rating and Standard Life said it was prepared to move business south of the Border in the event of a Yes vote.

Aggreko’s preliminary results said: “We now face a new risk. This is the possibility that Scotland, which is where we are headquartered and have our global manufacturing and product development facility, might split from the UK.”

It went on to say that independence “presents a number of risks”. The document said Aggreko would have to split its operation into “two separate trading entities”.

“Every time we move an item of fleet across the Border, invoices would have to be raised and balance sheets adjusted. We would have to account for tax purposes for our employees’ days spent either side of the Border.

“If Scotland were independent, there would potentially be different rates of VAT, personal and corporate tax, different approaches to employment rights, pensions and health and safety. Managing these differences would add complexity and costs to our UK business.” On the difficulties that opponents of independence have flagged up concerning Mr Salmond’s plans for automatic EU entry and a formal currency union with the rest of the UK, Aggeko pointed out that it relied on trade agreements negotiated by the EU.

“There is a risk that an independent Scotland might not be able to continue in membership of the EU and that could impact the terms under which we export equipment around the world.

“There is also the risk that the outcome of the issues of currency will not be helpful to our business. At the very least, if Scotland votes for independence, we will face some years of uncertainty.”

Labour’s finance spokesman Iain Gray said: “Another day and another prominent Scottish-based company outlines their concerns over the risks of an independent Scotland.”

A Scottish Government spokesman said: “An independent Scotland would have the full range of powers to build on the strength in our economy, creating an even more attractive environment for business.”