Scottish Independence Would Hit Construction, Barbour ABI SaysNeil Callanan
Almost 8 billion pounds ($13 billion) of construction projects planned for Scotland could be canceled if the country votes for independence because many are reliant on subsidies from the U.K. and there’d be uncertainty about the country’s currency, researcher Barbour ABI said.
About a fifth of the 38 billion pounds of building works earmarked for Scotland are from investors not based there, and questions over whether the pound would be used if Scotland leaves the U.K. may lead them to cancel or defer projects, the research company said in a statement today. The renewable energy industry would be most affected because it’s reliant on U.K.- wide subsidies, Cheshire, England-based Barbour ABI said.
“If Scotland does choose independence, it’s likely that negotiations between U.K. and Scottish governments will be prolonged and complex, posing a potential risk to both public and private sector contracts,” Michael Dall, lead economist at Barbour ABI, said in the statement. “The currency question will also have a direct impact.”
Investors withdrew almost $2 billion from U.K. equity funds in the last two months amid uncertainty over what a Yes vote for independence in the Sept. 18 referendum would mean for equities. A YouGov Plc poll last weekend showed the Yes vote leading for the first time, heightening investor concern about Scotland’s future currency, a new regulatory environment and the lack of a central bank.