Scottish companies say they’re turning to London and Brussels rather than Edinburgh for answers about the costs and economic risks of independence.
The agreement last week between U.K. Prime Minister David Cameron and Scottish First Minister Alex Salmond to hold a referendum on going it alone is raising concern over everything from regulation to budget policy, executives said at House of Lords Economic Affairs Committee hearings the past two days.
“It’s such a game-changing decision that we need to understand the facts,” Keith Cochrane, chief executive officer of engineering company Weir Group Plc, told a hearing in Glasgow today. “The potential unintended consequences of independence need to be explored.”
Salmond has come under pressure this week to spell out how independence would work after revealing that he is seeking legal advice on future Scottish membership of the European Union. Salmond denied in the Scottish Parliament again today that he had misled voters in a March interview with the British Broadcasting Corp. over the advice he’d sought on whether an independent Scotland would automatically remain in the EU.
“We are frustrated by the quality of information available,” Stephen Boyd, assistant secretary at the Scottish Trades Union Congress, told the committee. “The debate is highly political and not evidenced to any degree.”
Answers to questions may have to come from the U.K. government in London and the European Commission in Brussels, according to Owen Kelly, CEO of Scottish Financial Enterprise, which represents banks, insurers and fund companies.
“It is regrettable that the political process is going to lead us to a point of choice where the essential facts are not going to be available to business,” Kelly told the committee’s hearing in Edinburgh yesterday. “All we have to go on is competing assertions.”
Salmond’s Scottish National Party, which won a majority in the Edinburgh legislature last year, wants more financial power to increase Scotland’s competitiveness and to use investment to boost the country’s economy. He is responsible for health, education, transportation and justice, while the U.K. sets economic and the bulk of taxation policy.
Scotland’s economic slump deepened in the second quarter, the latest data available, while Scottish exports of manufactured goods declined 4 percent. That was in line with a decline in gross domestic product for the U.K. as a whole, which a report from the Office for National Statistics today showed exited recession in the third quarter.
The debate so far has mainly focused on the economics of Scotland going it alone and how North Sea oil revenue and U.K. national debt would be divided. Polls show voters are roughly two-to-one in favor of staying a part of the U.K.
Alistair Darling, the former chancellor of the exchequer who is leading the campaign to keep Scotland in the U.K., said both governments should publish detailed documents setting out the issues around independence.
Darling, who bailed out Edinburgh-based Royal Bank of Scotland Group Plc when he was in government, told the committee yesterday Scotland should expect to pay more to borrow because of the premium investors charge to smaller countries in Europe.
No new figures surrounding independence have emerged since January, Martin Gilbert, CEO of Aberdeen Asset Management Plc, Scotland’s largest fund manager, said in an e-mailed response to questions.
“There is uncertainty on both sides of the debate,” David Nish, CEO of Edinburgh-based insurer Standard Life Plc, told the committee yesterday. “The politicians are duty-bound to get some clarification around these big questions. Change tends to drive up costs, which makes you less competitive and raises the cost of raising capital.”