The Scottish Independence Referendum: Views from business and industry - A Dods Monitoring briefing
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The Scottish Independence
Referendum:
Views from business and industry
A Dods Monitoring briefing
September 2014
Contents Introduction The Campaign Leaders Business reaction Financial Services Oil, Energy and Infrastructure Viewpoints Selected further reading and next steps
Introduction
Background to the historic vote on Scottish independence on September 18
By James Sloan
Political consultant
This briefing considers the views of some stakeholders in the independence debate including retailers,
the financial sector and oil industry.
The campaign for an independent Scotland has had many highs and lows over the years, with Winnie
Ewing’s shock win at the 1967 Hamilton by-election a watershed moment for the modern nationalist
movement.
The failure of the 1979 devolution referendum in the dying days of the Callaghan government proved a
disappointment for many.
Following 18 years of Conservative rule, in which calls for a directly elected body in Scotland were resist-
ed, the new Labour government of 1997 held a referendum on Scottish devolution within months of be-
ing elected. An overwhelming majority voted in favour of a devolved parliament with tax-varying powers.
The first elections to the new parliament took place in 1999, with the late Donald Dewar leading a Labour
-Lib Dem coalition.
The early years of devolution were not altogether smooth, following the death of Dewar in 2000. Henry
McLeish served for only a year, followed by Jack McConnell who served until defeat in 2007.
Whilst the 2007 win for the SNP took some by surprise - the first time in nearly 50 years that Labour had
failed to win a national election in Scotland - it was the successive 2011 victory for Alex Salmond that
brought the nation to this historic vote.
The terms of the referendum were agreed with the prime minister, who’s party has only one Scottish MP.
With the question posed - Should Scotland be an independent country? - the debate was under way.
The No campaign has consistently remained ahead, but with polls tightening in recent weeks, and pro-
union parties promising a range of increased powers to Holyrood whatever option the people of Scotland
choose, the British constitution is unlikely to remain static after September 18.
The Campaign Leaders
Alex Salmond
Voting yes “is a vote for ambition over fear” 33%
think there
First elected to Westminster in 1987, Salmond has beenwould be
leader of
the SNP since 1990, excluding a break between 2000 and 2004. He
noLabour
became First Minister of Scotland in May 2007, beating changeby
one seat.
18%
His first four years running a minority government proved to be a
precursor to the historic win in 2011, where he led the SNP to an
overwhelming victory, gaining a majority in the Scottish Parliament.
of the
As face of the Yes campaign, alongside hisoil industry
deputy, believe
Nicola Sturgeon,
Salmond is often considered a marmite figure. Despite being leaderindependence
since 1990, he has would
shown few besigns
a
of standing aside. positive step
This vote will determine his political future: heralding a rise even further, or hastening his demise.
Alistair Darling
Voting no means “we can have the best of
both worlds”
One of only three ministers to serve for the entirety of the 1997—
2010 Labour government, Darling, like Salmond, was first elected
to Westminster in 1987.
Seen by many as a canny operator, with cabinet roles in
Transport, Work and Pensions, Trade and Industry, and a stint as
Scottish Secretary, he made the transition from the Blair govern-
ment to the Brown administration, serving as Chancellor during the financial crisis from 2007—2010.
Initially hesitant to take on the job as leader of the anti-independence campaign, Darling accepted the
role. On taking the reins of Better Together he has focused on concerns over currency, the country’s
fiscal future, building upon his experience as Chancellor.
Although many in his party would like to see Darling return to front-line politics, the former Chancellor
is likely to remain resistant to such calls.
Despite only having one Conservative MP north of the border, David Cameron has defended the Union
saying he believes in it with his “head, heart and soul.”
The three pro-UK parties—Labour, Conservatives and Liberal Democrats—have all pledged, that should
Scotland vote no on September 18, then more powers will be devolved to the Scottish Parliament.
Former prime minister Gordon Brown has also played an active part in the campaign.
Business reaction
Both the Yes and No camps have touted various
businesses as supporters of their cause.
The Business for Scotland grouping of Yes sup-
porting organisations signed a letter of 200 sup-
porters which included Aqua Energy, Isle of
Skye Fudge and Chocolate Company, former
chair of Scottish Enterprise Professor Sir Don-
ald MacKay, and former chief executive of RBS,
Sir George Mathewson.
The 130 signatories of pro-UK businesses, lead-
ers who have signed in a personal capacity in-
cluded Iain Napier, chair of John Menzies plc,
Audrey Baxter of Baxter Food Group, Victor
Chavex, chief executive of Thales and Niall
Booker, CEO of the Co-operative Bank.
Former chief executive of the Scotch Whisky
Association, Gavin Hewitt told The Telegraph
that around half the chief executives he had ap-
proached agreed that the business case for in-
dependence had yet to be made, but feared a
backlash if they went public.
Retail giants, including supermarkets, have add-
ed their voice to the debate.
Kingfisher (parent company of B&Q) chief ex-
ecutive Sir Ian Cheshire said uncertainties around currency and EU membership would put "everything into
hibernation" and a yes vote would “put a pause on everything.”
He claimed that plans for 23 new ScrewFix stores in Scotland had been put on hold.
Betting shop William Hill, which has taken a record political bet of £800,000 on a no vote, remains neutral on
the issue of independence. However, outgoing chief executive Ralph Topping, has backed the yes side.
CEO of drinks giant, Diageo, Ivan Menezes said “we cannot pick up and leave Scotland. We're there to stay”
whilst supermarket Morrisons confirmed it would continue to use Scottish farms for produce if a yes vote
occurred.
The development director of Waitrose, Nigel Keen said the outcome of the referendum "will not affect" the
supermarket's expansion plans in Scotland and the decision is “one for the
Scottish people to make and voting is a personal matter for our partners.”
Next chief executive Lord Wolfson said "I don't think it would make any
difference. We manage our business in Eire how we manage in the UK.”
The promise of cutting air passenger duty led to support for the independ-
ence cause from International Airlines Group chief executive Willie Walsh,
and Ryanair chief, Michael O’Leary.
Financial services
The use of Sterling has dominated much of the debate. Financial institutions have mixed caution with
forthright contingency planning.
Chief executive of Barclays, Antony Jenkins said that independence was “a matter for the Scottish people
to decide – we think we can make it work either way as a bank.”
Insurance giant Aviva’s chief executive, Mark Wilson remarked “We operate all around the world and we
operate in many jurisdictions and in many places so I really think that's not an issue for us to focus on."
The moves by Standard Life in preparing for a business relocation from Ed-
inburgh were “precautionary…to ensure continuity of our businesses’ com-
petitive position.”
Alliance Trust chief Katherine Garrett-Cox said that the company was not
making a political statement in setting up new subsidiary companies in England, but merely alleviating cli-
ent fears of uncertainty arising from a yes vote in September.
An RBS report said a vote for independence "could significantly impact the
group's costs and would have a material adverse effect on the group's business,
financial condition, results of operations and prospects".
However, Ross McEwan, chief executive of the RBS group said “Let’s leave the
people of Scotland to make the determination. If I need to operate in 39 coun-
tries rather than 38, then that’s what we will do.”
The world’s biggest investment fund manager, Blackrock, called the Yes side’s plan for a currency union
“infeasible” which would potentially bring risks to both countries.
Scottish Financial Enterprise’s chief Owen Kelly stated that “A yes vote would require the creation of an
additional financial regulator with hundreds of staff. The cost would run into millions and have to be paid
for by the industry in Scotland.”
Martin Gilbert, Aberdeen Asset Management head commented that independence “would be neutral
for Scotland’s financial services industry.” He stated “we already operate in 30 countries round the world,
so one more's not going to make any difference."
A note by investment bank Goldman Sachs said that “it is difficult to see the rest of the
UK agreeing to provide a monetary and financial backstop to Scotland”
Although HSBC chief executive Douglas Flint is a firm supporter of the Union, the bank has
made clear that he is speaking in a personal capacity.
The Financial Times reported that Lloyds Banking Group had considered moving their registered office
from Edinburgh to London, in the event of independence.
Tesco Bank advised that independence “could significantly impact the fiscal, monetary and regulatory
environment within which the group operates”.
Head of tax for KPMG in Scotland, Jon Meetan said: “The potential creation of an independent...separate
Scottish tax system could give rise to a period of uncertainty for businesses and individuals…as well as cre-
ate opportunities to design a more effective system tailored to Scotland’s specific requirements.”
Budget 2013
Oil, Energy and Infrastructure
33%
think there would be
no change
18%
of the oil industry believe
independence would be a
positive step
12%
think independence would have a negative impact on the industry
The energy and oil sectors have long been at the heart of the arguments for independence, and the above
figures, were the result of a survey of 700 firms undertaken for a report by the Aberdeen and Grampian
Chambers of Commerce.
In April, at the Highland Renewables Energy Conference, representatives were divided over the impact on
the sector. 53.7 per cent thought that an independent Scotland would be beneficial to the renewable en-
ergy sector, however this contrasted with a vote of 61.8 per cent against Scottish independence
amongst delegates.
BP chief executive, Bob Dudley, warned of “big uncertainties” facing the energy sector. He said that
“Great Britain was great and ought to stay together.”
The UK’s second largest energy supplier, SSE suggested that a single energy market, post-independence,
across Great Britain would be both desirable and likely; however this came as the company said that they
had been “uncertainty” and “increased legislative and regulatory risk” associated with the referendum.
Centrica chief executive Sam Laidlaw remarked that independence "won’t make a material impact to
our business."
"Whatever happens in the referendum this September, there's a huge amount of uncertainty around the
framework that will underpin the future development of renewable energy," commented Niall Stuart,
CEO of trade body Scottish Renewables.
Chief executive of BAE Systems Ian King said “it is clear that continued union offers greater certainty and
stability for our business.”
Infinis, a generator of renewable power, with a 7.3 per cent market share, raised fears that independ-
ence would have an “adverse effect” on their business, through a “division” of their customer base.
Defence contractor Babcock has suggested that independence would lead to job losses. Regarding their
role in the Clyde, "It is unclear whether there would be a continuing role for Babcock should the subma-
rine flotilla be moved and the nuclear infrastructure decommissioned.”
The Weir Group, in association with Oxford Economics, produced a report on potential implications of
independence for businesses in Scotland. Weir Group chief executive Keith Cochrane has been vocal in
his opposition to independence.
Viewpoints
“There are plans and plans. We may have made contingency plans about contingency plans, by which I
mean if Scotland were to vote for independence in the early hours of the morning... we will have a team
in place tasked with dealing with this.”
Sir Nicholas Macpherson, Permanent Secretary to the Treasury
Investors would be faced with “unfathomable levels of uncertainty” if independence happens.
Bill O’Neill, Head of UBS Wealth Management, UK
“I am a democrat, and believe that the geography, economy, demography and politics of our country
are so distinctive that they are best served by our own sovereign government.”
Dame Mariot Leslie, former UK ambassador to NATO
"The main issues here are not currency, they're probably not even North Sea oil. I think the main
issue...as an outsider...is the vision of society, what do you want to do."
Professor Joseph Stiglitz, Nobel Prize winner for economics, 2001
Budget 2013
Selected further reading Scottish Referendum White Paper Gordon Brown’s battle for Britain: ‘You have to think about 100 years down the line’ Sunday Herald backs Scottish independence BBC News—Scotland Decides Time for a UK constitution - Linda Colley Politics Home: Ann McKechin MP: Better together for business Holyrood Next steps The final result of the referendum is expected to be known during the day of September 19. In the run up to the referendum Dods Monitoring will be producing a “What if” scenario of possible outcomes, whether it is a Yes or No to independence—please contact your political consultant for more information.
For further information about the content of this briefing please contact your political consultant or James.Sloan@dods.co.uk All images © Press Association
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