Businesses must unite in telling Scottish Government to focus on growth

Businesses must unite in telling Scottish Government to focus on growth

by Struan Stevenson
article from Tuesday 25, September, 2018

SINCE BEFORE THE ACTS of Union in 1707, England has been Scotland’s main trading partner. The United Kingdom is one of the largest economies in the world and Scotland has always played a key part in that success story. For Scottish business, the United Kingdom has been a win-win partnership. 

Scotland is a world leader in the production of whisky, food, avionics and satellites, micro-electrics, computer software, financial services, oil & gas, textiles and a host of other goods and services. Our skilled workforce and thriving entrepreneurial spirit have traditionally acted as magnets for inward investment, boosting our economy and creating jobs. Expanding global markets have enhanced our export trade and attracted significant growth in the tourist sector. 

Yet despite all of these upbeat indicators, the Scottish economy has continued to languish behind other parts of the United Kingdom and we remain in the bottom half of the 34 countries in the Organisation for Economic Cooperation and Development (OECD).

Scotland’s performance relative to its potential is a source of frustration to the business community. As part of the United Kingdom and given the clear advantages this bestows in fiscal and monetary terms, this should be one of the best places in the world to do business. However, to maintain growth the Scottish economy needs investment – and businesses need to have the confidence to make that commitment. 

Uncertainty has always been the enemy of investment and uncertainty about the SNP government’s continued threat to hold a second independence referendum has acted as a brake on our economic performance. Much has been made of the potential negative influence of uncertainty resulting from the United Kingdom’s decision to exit the EU. Yet over a longer period, the stagnation of Scotland’s economy can be directly linked to the ongoing question mark over Scotland’s status within the United Kingdom; an influence that the rest of the United Kingdom does not suffer. 

That’s why Scottish Business UK (SBUK)has released a new report, Win-Win: The business case for Scotland's place in the United Kingdom which aims to set out clearly the benefits that most companies feel derives from doing business from within a strong Union, while explaining the risks of leaving.

The report concludes that while Brexit may be of concern to many Scottish businesses, it in fact makes our membership of the UK all the more essential. Scotland’s trade with the rest of the UK is four times greater than our trade with the EU and the Scottish Government’s own figures imply that independence would be at least eight times as costly as the worst-case Brexit situation. 

In short, independence would be a lose-lose scenario for Scottish business yet four years on from the 2014 referendum, it’s clear that the Scottish Government is determined to establish any pretext possible for holding another vote. 

The never-ending uncertainty that this presents for Scottish business means that companies need to unite in urging the Scottish Government to abandon its demand for another referendum on independence and instead focus its efforts into reigniting the Scottish economy by pursuing a policy of stability and growth that will increase investment, create jobs and benefit everyone. 

A winning formulation.

Struan Stevenson is Chief Executive of Scottish Business UK

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