Thursday, 28 August 2014

The Business View on Independence

There has been a flurry of recent activity around a question that followers of this Blog will know is close to my heart: Is Independence good for Business?

In the last couple of days we have seen;
This has to be added to
And various pieces of research (this list is not exhaustive)
  • Bibby SME research"Over a quarter (26 per cent) of Scottish small and medium-sized businesses fear they will lose business if there is a ‘yes’ vote in the referendum and some 70 per cent have rejected the idea that independence would be a positive step for the nation"
  • Federation of Small Business Survey: of 1,800 small Scottish Businesses (note the question was not directly asked): "In the comments section of this question, 134 members volunteered that they would consider or would definitely be relocating their business outside of an independent Scotland, while a further 51 stated that they would look to close, downsize, sell, or retire early. This totals 185 respondents (10%) who would consider withdrawing their business from the Scottish economy"
  • Treasury Research: "Around one in ten Scottish jobs depend on trade with the UK and would be “in danger” after a referendum Yes vote,according to Treasury analysis. Among the 270,000 jobs on the line are 40,000 in financial services and 180,000 people in the services industry like tourism and hospitality."

The point is not that there will be many businesses who aren't harmed by independence but that there are many who will be.  Just because one business won't have to move employment out of Scotland doesn't mean it "cancels out" another that does.  Jobs will still be lost to the Scottish economy

So to be clear:  I don't doubt that from the small (hairdressers, corner-shop owners, architects, marketing consultants) to the large (local care-home groups or social-housing builders) there will be plenty of parochial Scottish businesses who will favour independence - some of them will see independence as a good thing, few of them will see direct harm to their business.

I have tackled this issue before when I asked the question: Who do Business For Scotland Represent - my research was painfully thorough and showed (at that time at least);
  • Their claimed membership figure is not backed up by any evidence and it appears (at best) it is simply people who register with an email on their website.  I tested it - my dog's a member and gets regular emails from them
  • As I've said elsewhere on this blog: "one of their founding Directors (Jim Mather) is the former SNP Minister for Enterprise, their CEO (Gordon MacIntyre-Kemp) is a failed SNP local council candidate and the First Minister is fond of using them for photo-opportunities and is attending their annual fund-raising dinner - but I don't think one can necessarily conclude from that that they're some sort of poorly disguised SNP campaigning vehicle designed to give the Independence case a veneer of business credibility."
  • Their named members at that time (June 17th 2014) could be summarised as: 
    • 30 "business professionals"
    • 28 people who have Small Company directorships; businesses with no declared turnover or employee figures.  These are predominantly consultancies, property companies and service companies; I can't identify any material trading links with rUK and none can be considered major employers
    • 6 People who have or have had larger scale business experience: A one-time retail entrepreneur; the founder of a £5.6m turnover domestic Scottish property preservation company (with no declared employee figures); the founder of an £8.7m voice and data solutions company  focused on the domestic Scottish market (with no declared employee figures); a Director of a £6.6m turnover software business that employs 75 staff but has only £443k turnover in the UK (including Scotland) ; the founder of an (exclusively Scottish) property development company with a turnover of £47m and 233 employees, the founder of an (exclusively Scottish) care home group with £22.1m turnover and 879 employees
I don't have the time to run through the latest list of businesses for Yes and frankly profiling them probably misses the broader point.  I am confident from a quick scan that my conclusion when profiling Business for Scotland is likely to still stand - they will not be representative of the Scottish businesses who rely on trade with the rest of the UK (and who are responsible for roughly 1/3 of all employment in Scotland).  For what it's worth I also doubt very much that the businesses arguing for Yes employ anything like as many Scots as those arguing for No - but I'm not going to waste my time proving it this time.  Because: 

Even if the businesses - and I mean the businesses, not the retired or ex-pat business people who may have founded businesses that they no longer own or run - who were arguing for Yes employed as many people in Scotland as those arguing for No that doesn't mean they would "cancel each other out".  

If business A says independence means they will shed Scottish jobs, that isn't cancelled out by business B saying they won't.  The net effect is still for jobs to be lost, for households to suffer and for the economy to be severely damaged. 

So I would argue strongly that it's not about "how many are for and how many are against". The issue is that in absolute terms there are a very large number - representing huge swathes of Scottish employment - who see independence as a genuine threat.

They should be listened to by any voter who is genuinely trying to understand the implications of a Yes vote.


Anonymous said...

Something that has riled me about the rhetoric from the "Yes" campaign is the concept of "Scottish jobs".

As you say there are people for which independence will be welcome for the business and those for which it'll be a disaster. What happens to businesses whose needs aren't met or are even hindered by independence, is there a plan for them?

On a similar note, I dislike trident, it makes me hugely uncomfortable. However, to counter the job losses argument that would result from moving trident we're told in it's place would be a big HQ that would have plenty of jobs. How does that help the families that it displaces?

Thank you for introducing a human element into the argument that seems to be obsessed by absolute numbers of jobs available.

Anonymous said...

Well said , its frightening the number of Scots voting with their hearts being blind to the severe consequences independence will have for Scotland