Today the Weir Group released a constructive addition to the business debate on independence. The questions contained within the report can be answered based on economic evidence, and the opportunities that are highlighted strengthen the case for Scottish independence.
As an engineering company owner and a director of Business for Scotland, I agree with the report when it says an independent Scotland can succeed and that it’s in the interests of the rUK to ‘facilitate that success as far as possible.’
The report also accepts that once Scotland has the full fiscal levers we can shape policy to meet the “needs and circumstances” of the economy as well as cater for the “distinctive views and values” of those who live and work in Scotland.
These are the building blocks of a stronger economy with independence. Scotland, as a wealthy nation, has all the key attributes to be a successful, independent country. The referendum presents an opportunity for business in Scotland, especially in areas like engineering and manufacturing. After decades of industrial decline by design, Scotland can create an industrial policy that develops growth sectors such as renewable energy.
Opportunities to improve Scotland’s economy with independence
The report also refers to the demographic challenge of Scotland’s ageing population. This issue can only be addressed in an independent Scotland with control over migration policy. An independent migration policy for Scotland would bring substantial financial benefits – £65 billion pounds over future decades – and encourage young, skilled workers to stay and contribute to the economy.
Similarly, I have previously considered the question of borrowing costs which is raised in the report. Medium sized independent countries like Scotland have lower borrowing costs than the UK. The credit agency Standard & Poors previously reported that Scotland would merit a high “investment grade economy” status.
The S&P report said,
As the Weir report states, it will be in the interests of rUK as well as an independent Scotland that all parties work together after the referendum result. As Business for Scotland has been saying for some time now there will be a sterling area given the level of trade between the countries. Indeed the report talks about the implications of transaction costs if a currency union weren’t to be agreed.
This would mean rUK businesses incurring £500 million of transaction costs annually. As explained by Professor Anton Muscatelli in the Financial Times this week, a currency union would be best for all of Britain. The No Campaign position simply doesn’t add up – and recently a UK Government Minister conceded that “Of course there would be a currency union”.
This morning, on BBC Radio Scotland’s GMS programme, Weir Group Chief Executive Keith Cochrane stated the report pointed to there being benefits. He went on to say they were ‘uncertain’. As someone who has worked in manufacturing for 30 years no one does business on the basis of absolute certainty. Prior to Scottish devolution some business voices, including the Weir group itself, made similar comments about risk and uncertainty. Clearly history has shown the significant benefits of devolution to the Scottish economy and Scottish business. All the evidence shows that further benefits would be realised were Scotland to become Independent.
The Weir Group report says, “It is certainly possible for Scotland to foster a thriving economy as an independent nation”.
I am in no doubt that an independent Scotland will be positive for the economy and the wider community. It is the business opportunity of a lifetime.
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Category: Economics of Independence