With only a few hours until the results of Scotland’s independence are revealed, how would a yes win affect the retail and business sector?
This complex argument is overshadowed by many “what-ifs” and “maybes” – as it is, nothing is certain; if voters wanted an independent Scotland there would be an 18 month negotiation period to iron out the logistics of parting from the union. However, there have been many vocal supporters and opponents of independence and how it would affect business.
For a start there is no guarantee that Scotland would still be able to use the pound as their currency, in fact the Bank of England has suggested it would not allow it, and the country would have to make its own currency.
There’s also no guarantee of entry into the European Union, something that many businesses rely on, so these two factors have formed the basis for the argument against independence.
A dent in the food industry
One of the biggest industries in Scotland is food manufacturing with big brands such as Tunnock’s and Irn Bru based in the country, with staples such as whisky and smoked salmon huge exports. The Scotch Whisky Association has been outspoken about its worries of independence, saying that while Scottish whisky is imported to 200 countries, the government plans to only maintain between 70 and 90 missions.
Large retailers have also issued concerns about the red tape that can often lie with working with other countries, saying that they may have to pass on the cost to consumers. Sir Ian Cheshire, chief executive of Kingfisher, James Timpson, chief executive of Timpson, and Marc Bolland, chief executive of Marks & Spencer co-signed a letter expressing their worries, saying: “We know that running a separate pricing system in Scotland will mean taking the difficult decision as to whether or not to pass on the increased costs through higher prices to Scottish consumers.
“And it won’t just affect us, it will also impact on our thousands of suppliers, many of which are small to medium-sized businesses.”
Things would carry on no matter what
However, supporters of the Yes campaign see this move as scaremongering, and in fact, many heads of retail chains seem indifferent to the vote. In a recent interview with Retail Week, Jonathan Hart, chief executive of Thorntons said: “Independence is likely to cause a little bit more administrative burden but I don’t expect any change in our business.”
Hobbycraft echoed this sentiment, saying that they doubted there would be any immediate impact on their seven stores in Scotland. Next has also said they will remain “absolutely committed” to Scotland and Sebastian James, chief executive of Dixons Carphone said that he could imagine business being operated “in a loosely federated way like we do with Ireland.”
Overall it seems that if Scotland were to leave the union, there would be some initial teething problems and some key points that need to be addressed, such as the issue of currency and the European Union.
For many large-scale businesses, trading with another country would be water off of a duck’s back, and there is no reason why many small businesses won’t benefit from independence either. On the other hand, a no vote means that the country stays together, benefitting from many of the international trade agreements and the positives of EU membership.
Whatever’s decided, it will be a ground-breaking day not just for business, but the UK as a whole.