Member Article

Scottish referendum stir causes North East firms to put off investments

A survey has revealed that 12% of companies across the North East are putting off investment ahead of the Scottish independence referendum.

With just over four months to go until referendum, The North East Chamber of Commerce (NECC) is publishing the results of a survey of business opinion surrounding an independent Scotland.

This independent survey of NECC members, part of a larger survey by the British Chambers of Commerce (BCC) of 2,400 businesses in England, Wales and Northern Ireland, examines the impacts, opportunities and risks perceived by businesses in the rest of the UK.

Ross Smith, NECC Director of Policy, said: “Given that we need businesses to continue investing to sustain the recovery, the uncertainty that this referendum inevitably creates needs to be minimised.

“As we get closer to the referendum people on both sides of the debate need to be careful not to heighten concerns through unhelpful hyping of political rhetoric.

“We also need reassurance and clarity that whatever the outcome the transition will be managed in a way that makes continuity of trade as easy as possible.”

Key findings from the NECC survey:

• 12% of North East businesses said the referendum would impact on investment plans
• Only 7% of regional firms said Scottish independence would influence future business decisions
• 76% said they would not change their business strategy for an independent Scotland
• However, 14% of firms forecast that independence could have a negative impact on sales and orders, with 9% concerned that would also have an adverse effect on recruitment

Ross added: “Our Quarterly Economic Survey shows that business confidence is high in the North East, with many of our members predicting growth in the coming year. While our firms are keeping their powder dry on the potential impact of Scottish independence, it is concerning that 12% plan to hold back investment.

“Businesses are also aware that an independent Scotland could gain advantage over our region in attracting inward investment with grant subsidies as well as the ability to lower tariffs currently unfairly levied on regional businesses, such as Air Passenger Duty.”

Key findings from the BCC survey:

• If Scotland votes to remain part of the UK, almost half of businesses (49%) believe that the current division of power should remain the same
• Exactly a quarter of businesses (25%) said that the Scottish Parliament should have more power if Scotland remains part of the UK, but a fifth (21%) also said it should have less
• Two thirds of businesses (63%) say no new opportunities would arise for their businesses if Scotland votes for independence
• Firms identified the highest risk as trading across borders should Scotland become independent, (26%), and identified future currency arrangements as the most important issue (47%) for their business

Other key findings include businesses outside of Scotland would favour a reform of the Barnett formula if Scotland voted to remain part of the UK and a third of firms would like a formal currency union between the UK and Scotland.

This was posted in Bdaily's Members' News section by North East Chamber of Commerce .