Scottish independence 'would cost firms'

By Press Association , Sep 6, 2012
Filed under: News

Scottish independence would prove costly to companies on both sides of the border, according to a business lobbying group.

The CBI is "not convinced of the business and economic case" for independence.

During a speech in Glasgow, CBI director-general John Cridland will voice his concerns about Scotland leaving the UK.

He will stress the positive things that Scotland and England do together, such as Team GB's success at the Olympics.

Addressing the CBI Scotland annual dinner, Mr Cridland will say: "The CBI has a collective view on independence and, I believe, a duty to express it. CBI Scotland council is not convinced of the business and economic case for Scotland seceding from the Union and judges that businesses - Scottish, English, British - would lose out from the fragmentation of our single market.

"We have two years to get this right, and get it right we must."

If people in Scotland vote to leave the UK, the CBI would "work with the mandate". But a Yes vote would bring "several more years of upheaval and negotiation", he will argue.

"The immediate effects would be profound and, in the short term, costly. When Slovakia separated from the Czech Republic, it cost the country 4% of its GDP in the following year."

Uncertainty is the "biggest bogeyman of all" for business and the debate over Scotland's future is "adding a thick layer of uncertainty", he will say.

"What's on offer here is often described as divorce. Those proposing a permanent split say there's no animosity in this. It's just that after 300 years of relatively happy marriage, they feel it's time we started seeing other people. My view is: that's the wrong way to look at it."

Tags: business, CBI, news, scotland

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James McLeary

They come bearing half-truths
The CBI Director-General, John Cridland, has come north to tell Scotland we shouldn't be independent. He has every right to do so.

But what he has no right to do is use half-truths as the basis for his scaremongering.

I hear that Mr Cridland will tell the CBI Annual Dinner in Glasgow tomorrow night that the "immediate effects [of independence] would be profound, and in the short term costly. When Slovakia separated from the Czech Republic, it cost the country four per cent of its GDP in the following year."

But what Mr Cridland won't tell us is what happened next. In the years since independence economic growth in Slovakia has averaged 3.5% each year, compared to 1.9% for Scotland. Their growth rate has been almost double that achieved here. And that extra growth has a direct benefit for ordinary Slovak families - benefits like higher wages, more jobs, higher standards of living. You might call it the Slovaks' independence bonus.

And this excellent economic performance covers the period of the financial crisis when we have been told it was better for Scotland to be part of the bigger UK. In fact, the Slovak economy only contracted for 1 year during the crisis, compared to two years for the UK and for Scotland. And over the past two years of recovery they have enjoyed growth rates of 4.2% and 3.3% compared to 1.3% and 0.4% here. You won't hear the CBI talking about that!

In case you thought this story only applies to Slovakia, don't worry the beneficial effect of independence can be seen elsewhere across Europe.

Lets take the countries in the EU that became independent in the early 1990's (Slovenia, Slovakia, the Czech Republic, Estonia, Latvia and Lithuania). Over the past 20 years, the average annual economic growth rate for these six newly independent nations has been 2.9% - thats our growth rate plus half as much again. And remember, more growth means more jobs and opportunities, higher family incomes and a better standard of living.

So don't believe CBI Director-Generals when they tell you Scotland should be happy with our lot. More of the same may suit a CBI boss in London and Tory ministers at Westminster, but it is bad news for families across Scotland.

It is time for something different. There is a better way forward for Scotland. We too can claim our own independence bonus as we use our huge resources, our own tax base and our fantastic international reputation to drive forward our economy and deliver the fairer and wealthier nation we all know, in our hearts and in our minds, that Scotland should be.