Scottish independence: Business challenge to SNP on independence

Iain McMillan says busineses need information now to plan ahead for the possibility of independence. Picture: Donald MacLeod
Iain McMillan says busineses need information now to plan ahead for the possibility of independence. Picture: Donald MacLeod
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THE Scottish Government has been urged to bring forward the publication of its independence White Paper to give businesses “greater clarity and certainty” about the impact of Scotland leaving the UK.

CBI Scotland director Iain McMillan said businesses needed to know the answer to many questions on independence as the country stood on the verge of a crucial year in the debate over Scotland’s future.

In a document looking ahead to 2013, the business lobbying organisation published a host of questions that it believes hold the key to understanding the constitutional debate.

They address subjects such as the effect that leaving the UK could have on Scotland’s economy, defence jobs and areas such as taxation.

It also called on the government to produce more detail on currency post independence, and Scotland’s fiscal and economic position.

The White Paper is not scheduled to be published until November next year. But CBI Scotland argued that Scottish businesses needed to know the implications of independence before then.

In a document, published today, CBI Scotland said it “would urge the Scottish Government to consider publishing it, or at least those elements relating to macro and micro-economic policy, earlier than currently envisaged in order to provide the greater clarity and certainty that businesses seek”.

In his New Year message, Mr McMillan added: “As part of their due diligence ahead of the referendum, many business leaders will carry out an assessment of the possible impact of Scotland leaving the United Kingdom on Scotland’s economy and their businesses.

“This gives rise to many questions and as we go through 2013. “We hope very much that the White Paper will address these questions in full and provide the necessary supporting evidence.”

While CBI Scotland’s paper accepted that the decision on Scotland’s future is “rightly and ultimately one for the electorate”, it stressed that “industry and wider civic society has a role to play too”.

According to the CBI, its members are “keen to understand the Scottish Government’s plans and vision for the business landscape in the event of independence”.

The paper states: “There are gaps in knowledge about what Scottish independence would mean for business and our economy as well as what the business environment would look like in the event of independence.”

The organisation accepted there were some issues where “complete clarity” would only be achieved after any negotiations between Scotland and the rest of the UK and Europe following a vote for independence.

But the CBI argued there were “many other aspects” that the Scottish Government could provide clarity on in terms of what it would like to achieve and how it would go about it well in advance of the referendum.

This should be done, it said: “in order to inform a productive public debate but also to provide certainty and allow businesses and others to assess the merits of what is being proposed and plan ahead accordingly”.

Questions over the share of oil and gas allocated to Scotland if it left the UK need answered, along with how the government would fund public spending “in the current era of declining and volatile oil production”.

Other questions relate to what “tax raising philosophy” would be pursued, as well as the “critical issue” of what currency would be used and how much influence Scotland would have over monetary policy if it keeps the pound.

The SNP Government has insisted that Scotland would have a representative on the Bank of England’s Monetary Policy Committee – an assertion that has been disputed by the Nationalists’ opponents.

CBI Scotland also stressed the importance of defence jobs in Scotland. The White Paper “ought to outline the approach that would be taken in order to sustain the 6,500 jobs which exist at the Faslane naval base” as well as the 5,000 jobs in Scotland’s naval shipbuilding and ship repair industry as these are “largely dependent on UK military orders”.

It also called for costings on the establishment of a new treasury, central bank, department of social security, revenue authority, foreign office, armed forces and border control.

The CBI asked how an independent Scotland would pursue the currency convergence required to eventually join the euro, if monetary policy is done on a UK basis.

There was also the question of whether the Scottish Government had “assessed and quantified” the risk of some Scottish firms not remaining headquartered in Scotland.

The CBI raised this scenario on the grounds that “the majority” of their customers and shareholders may reside in a “foreign country – the rest of the UK”.

Responding to the CBI document, a Scottish Government spokeswoman said: “We are doing all we can to deliver for the business community in the areas where we have responsibility and our economic strategy makes clear that delivering sustainable economic growth is our top priority.”