The Cost of Independence

The Cost of independence concerns and fears of sparing Businessmen Martina Macakova What telephone line leaders in Scotland re booster seek to hear is a exacting raillery on the future for Scotland and what part they can play in shaping it, non a re-run of pennyenarian arguments ab love potential persecute to the economy of constitutional change. introduction Ewan Hunter, Director of HunterSearch This essay needs with a disputeion ab stunned frugal independence done the perspective of local military control leaders.Its spirit is to analyze their prospect on frugal tendencies towards independence, if and to what extent could they beguile the results of upcoming referendum and whether Scotlands tune companies could play a role of an altogethery of the UK government. It provides the analysis of the current situation, oddly in the light of recent planets, as the archetypal Minister Alex Salmond, leader of the Scottish National Party (SNP), in the beginning of January announced that the referendum on Scottish liberty should be held in gloam 2014.In this essay I give attempt to come with a prediction of the possible future development of the opinion of Scottish prima(p) line of merchandise companies. For that purpose I fool examined by and large newspaper articles, opinion canvasss, governmental documents and public savinges given by the local note representatives. As a secondary source and the introduction to the topic of Scottish Independence I found genuinely valuable a publication compose by Jo Eric Murkens, barb Jones and Michael Keating Scottish Independence A matter-of-fact Guide. A division of state into two sovereign parts would be very complicated and long-term process.It is a process fraught with problems and controversy. Whether it is a sacrifice up of marriage or of nations, the major bone of contemption is always the equivalent who gets what. The division of Czechoslovakia in late 1992 and 1993 could serve as a condition for similar action, anyhow the situation of the essence and former Czechoslovakia differs. In Scotlands case, controversial may be especially the separation of state debt and nitrogen Sea oil color colour reserves the future of military bases on the island of Clyde, star sign of British nuclear missiles question of the membership in the European Union and currency issue.Despite the fact that the independence is primarily a question of subject field identity and political change, we cannot forget that frugal prosperity is prerequisite for well-functioning state. Its Scotlands oil If on that point was an self- congesting Scotland would it be economic failure or winner? It major power sound a paradoxical thing to say except if the core issue related to the economics cannot be really answered correctly. harmonise to Peter Jones, the starting point for dealing with the economics of independence ask to be existing Scotland.And current Scotland is a Scotland that moves within the United farming of Great Britain and Northern Ireland. It is obvious that public spending would demand greater income as two new types of costs would affect the public sector. First of all, there be costs incurred by the need to add on functions ( much(prenominal) as defense) and those incurred by the need to disentangle the Scottish element of much(prenominal) UK-wide bodies (for example Inland Revenue). Undoubtedly, Scottish government can count on the benefits from obtaining control of offshore oil and hit man resources.The representatives of SNP repeatedly assert the Scotland would be among the worlds richest countries. Additional GDP acquired from the profit make by oil companies offshore is mostthing what we can more or less confide on. Before his re-election campaign Alex Salmond grasped the opportunity to dust off SNPs old slogan Its Scotlands Oil. It was a smart move. As the election results showed the resurrecting claim that all North Sea oil as w ell as its revenues belongs solely to Scotland, was what Scottish voters wanted to hear. Oil and attack resources themselves dont guarantee long lasting wealth.Douglas Fraser, Scotland Business and thrift Editor at BBC, be ared his concerns that there is an elephant in the room that inevitably to be discussed. The price of oil is explosive and volatile price of oil means volatile income. Moreover, the trend is clearly for the volume of oil and gas production to fall, though that is partly offset by higher mean(a) prices, higher tax rates, and so buoyant revenues. Yet, an economy of an main(a) Scotland would be dependent on number of variable factors whose precise effects cannot be forecast. Among those unpredictable factors is a haracter of the negotiations that can either minimaze or enlarge the point of perplexity. The level of perplexity affects business confidence and investment and it is something that has been often mentioned by the Scottish business representatives period comenting on the question of independence. As Peter Jones points out, another parameter which stands completely out of political control is whether the prevalent economic environment is good or bad. In adverse times, business would be extremely nervous approximately independence as would the internationalistic markets. In this situation the price of independence could be quite high.The aim of idependence is to change the pecuniary, fiscal and regulatory regime which is currently the like as the in rest of the UK. The Scottish voters are believably to approve a different kind of a retrogression model, which would provide more powers for the Scottish Parliament, particularly in scathe of tax-varying powers and fiscal policy in general. The conclusions of a poll conducted by Ipsos MORI in November 2009 are that 66 per cent of the respondents are in party favour of the Scottish Parliament having increased its powers, whether in terms of further devolution or fully indepe ndence.The attempts to get the public touch on and the referendum itself should be appreciated. That is the major difference in comparison with the zero conflict of Czechoslovak citizens when the dissolution of Czechoslovakia was resolute about. More explanation about the proposed concept of independence provides the Scotlands Future Draft Referendum (Scotland) Bill Consultation Paper. Independence in terms of the proposal would mean that the Scottish Parliament and establishment would be responsible for all areas of legislation, including foreign affairs, defence and taxation, but the faerie would remain the head of the state.The current political and monetary union would be re hardened by a social and monarchical union. Although the monetary union would no longer exist, Scotland would keep operating within the Sterling system until it would be decided in a referendum that Euro would be accepted. Although, SNP leaders would most possible to follow the peacefull process of velv et divorce of Czechs and Slovaks, it doesnt seem that monetary question would be the case as the issue of currency remains unclear.While the Czechs and Slovaks immediately began to create their own currency, the Scots first con billetred adopting the euro. In confederation with lasting Eurozone crisis First Minister Alex Salmond changed his rhetorics and now claims that they would keep the pound. The SNP proposes sticking with superlative until Scots choose, by referendum, to join the euro. According to Douglas Fraser from BBC, his problem, in explaining this policy, is that remaining with greatest leaves the Treasury and Bank of England in London to set Scotlands monetary policy, while having no influence over it.THE business of (un)certainty Until recent time, there has been closely deafening silence on whether Scotland should become an independent country from local business companies. We could argue whether the reason for the lies in potencional risk of going out on a limb, as Douglas Fraser suggest in one of his articles, or if it more simple than that and the business leaders are just excessively occupied with the current financial crisis. Fraser writes in his article titled Holyroods challenge to business Iain McMillan seeks to balance support of some policy with pungent criticism.On balance, he says members say the potential advantages of devolved business taxation are outweighed by the kindredly costs. But it is the criticism that gets McMillan noticed, and nationalist voices can increasingly be comprehend questioning the legitimacy of the CBI as a voice for business in Scotland. The Federation of Small Businesses, the Scottish Council Development and Industry and Scottish put up of Commerce are careful to sit on the fence, probably because their memberships are split on constitutional questions.It is also because the implications of the Scotland Bill, or of increased devolution of taxation powers, are so unclear. Representing the banks, ins urers and asset managers, Scottish Financial first step wants to hunch if the tax base could be changed as well as the rate. Would there be additional complexity, and at what costs to business? How volatile would tax receipts be, and can a value be placed on the value of being part of a larger, more divers(a) tax base, as at present?Even asking questions, which might be seen as hostile or at least awkward, is savage territory for business. SFE Chairman, Mark Tennant, expressed his concernes regarding independence at the end of his speech at the annual dinner in December last socio-economic class Our approach, however, should be empirical and focalisationed on facts and the removal of uncertainties. Our role is to divulge the questions that need to be answered and ensure that the electorate receives an answer before they vote. Also Danny horse parsley who is MP for Inverness, Nairn, Badenoch and Strathspey, and Chief Secretary to he Treasury shares opinion that uncertainty hurts economy and remarks that if the Eurozone has taught us anything, it is that monetary union between fiscally independent states is an extremely difficult challenge. He argues that Scottish Government says it would continue to operate within the sterling currency area, but doesnt say how. His nub to the Scottish leader think carefully before sacrificing stability through independence. Regarding to the timing of the referendum, David Lonsdale, assistant director of Glasgow-based CBI Scotland, said in an interview. We want it in the first place alternatively than later. From the comments above is obvious that umbrella organizations associating Scottish business companies such as CBI and SFE are taking the side of UK government claiming that referendum should be held as currently as possible and at the same time expressing stark concers about the benefits of countrys independence. For a long time it seemed that the separate business leaders adopted an ostrich strategy bec ause few Scottish business leaders defy spoken publicly about constitutional change.However, year 2012 brought a turnover as some one of managers decided to stir up the still waters a bit. Martin Gilbert, chief decision maker officer of Aberdeen Asset Management Plc, Scotlands largest fund manager, spoke out Whether it is independence or not is a matter for the voters to decide. I would like to see all the figures so you can make an informed judgment. At the moment you dont know what the true figures are. Boyd Tunnock, representative of the Scottish maker of Caramel Wafers and Snowballs, commented in e-mail statement Scotland and Scottish business needs certainty and clarity.We need the independence referendum to be held as soon as is reasonable so that investors know where they stand. To some extent the uncertainty was diminished by the Salmonds clear statement about the referendum date. whizz of countrys leading businessmen Jim McColl welcomed the Scottish Governments upcomin g consultation on Scotlands constitutional future by saying Many of us in business are win over a prosperous future for this country depends on more powers for the parliament. member Business leaders join in referendum debate published on Tuesday this week shows slighty more positive attitudes towards the constitutional change and vice versa express criticism towards the representatives of CBI, SFE and Westminster politicians Members of Scotlands business community have refuted questions over the timing of an independence referendum and called for an end to scaremongering and a proper discussion on the merits of taking all decisions about Scotland within Scotland. There is little hard evidence that the referendum or the prospect of Scottish independence is damaging the Scottish economy.Business leaders have in the main expressed either a neutral or a positive attitude towards constitutional change in Scotland. The agent of the article supports his argument by quoting some of th e local business leaders Recently David Watt, Executive Director of the Institute of Directors in Scotland was asked by the BBCs Huw Edwards whether he was concerned by the prospect of a Scottish referendum in autumn 2014, as opposed to the Westminster governments preference for a vote as soon as possible.Mr Watt said that he thought that the date of the referendum made no difference. Having a timetable leading up to the second half of 2014 allowed businesses to plan. comparable opinion has Dan Macdonald of Macdonald Estates The fact is the biggest decision in three centuries lies before us and we owe it to our children, and those who succeeded us to take whatever time is required to discuss the form and detail of what result be our New Scotland. In ordering to do that London politicians need to stop peddling scare stories and focus on a meaningful debate about Scotlands future. On the same is also owner of The Residence Glasgow, Sarah Jane Walls who feels that there should be l ess blackball scaremongering and more positive debate about Scotlands future, continuing that she is excited about the possibilities for Scotland as independent country. According to the survey processed for the Business Insider that cover opinions of business on Scotlands independence, the majority of businesses (67 per cent) think independence for Scotland would not have a positive effect on their business with only five per cent saying it would be positive and 17 per cent unsure.Questionnaires were sent to companies listed in Insiders TOP500, SME300 and SPRINT100 lists. One of the CEO with this opinion poll further commented Achieving Scottish independence will not, in itself, prove to be the panacea for the challenges being faced. After all, there is little or no evidence to show any change will be positive. Therefore, to serve improve our economy appoint independent Scottish and international business experts to properly advise our inexperienced politicians to tackle the rea l, everyday issues of business rather than spend unnecessary time debating the future of Scotland without ny clear evidence to support how, and indeed why, the status quo should be changed. The contrary opinion expressed David Watt, decision maker director in Scotland of the Institute of Directors, by saying that none of the institutes 1600 members have expressed any concern as to a delay in a referendum vote. A spokesperson for UK Oil & Gas said although the proboscis has no member consensus on the issue of independence, none of its members has raised the issue as a specific concern. Conclusion The aim of this essay was to deal with the issue of Scotlands independence from the perspective of local business leaders.By analyzing especially newspapers articles that are dealing with the topic I learned that there are three possible attitudes towards Scotland becoming independent. One side represented mostly by CBI and SFE publicly claims that independence vote could harm Scottish ec onomy. The icy camp, which is primarily constituted of blue-chip companies, suggests the contrary. These positively thinking business leaders are denying comments that a delay on independence and the independence in general will destabilise the Scottish economy. The third group is categorise by being neutral or by refusing to comment on the independence question.It is logical that CBI and SFE are speaking less in favour of independence and the later date of referendum as they have closer transaction with the government in London than the individual organization do. In my opinion, even the business leaders that proclamated their support for independence cause and Salmons referendum timing feel at least some doubts. Also I think that a lot of the is actually tired of the independence berate and they would rather here from both UKs and Scottish Government some warranties in the time of economic crisis and that the politicians will support their efforts to kick-start the ailing econ omy.From the side of the local business leaders there is understandable demand for answers on number of significant question. That brings us back to the introduction of the essay where I comment that most of the issues regarding the economic situation of independent Scotland cannot be on the nose predicted. However it sounds disappointing. Many options might take place and the situation depends on various factors that Scottish Government cannot influence. We dont even know the answer to the fundamental question whether there will be an independent Scotland. UKs government is strictly against the eparation of the Union, neither the Scots itself are unify on the matter and as stands out from the lines above, nor the Scottish businessmen. Still, the independence is certainly more realistic than it was couple months ago. I believe that CBI and SFE could be potencial retainer of the central government during the future negotiations over independence. They associate number of importa nt companies and they could have certain influence on their members. On the other hand, there is a quite large number of companies, which are managed by state who decided to prove that the idiom You cant fight City Hall is a false statement.My belief also is that business could influence the negotiations, however I wouldnt say that companies could be determine the public opinion in general. Which side in end the majority of the business leaders joins will depend on numerous factors, especially on how skilfull in say difficult questions will Scottish political representatives be. SNP with Alex Salmond in lead is arduous something that no-one has ever tried before. To conclude I would say that I propably wouldnt bet on my own prediction because predicting something in terms of the economic situation of independend Scotland is like predicting the unpredictable.References Murkens, Jo E. Jones, Peter Keating, Michael. Scottish Independence A Practical Guide. Edingburgh University Pre ss, Edinburgh, 2002. Tom Clark. If one day it really is Scotlands oil what will we do with it? The Herald Scotland, 29 October 2011. operable online http//www. heraldscotland. com/news/home-news/if-one-day-it-really-is-scotlands-oil-what-will-we-do-with-it. 15567484 (accessed on 16 January 2012). Douglas Fraser. What would happen to Scotlands economy after independence? BBC. 15 January 2012.Available online http//www. bbc. co. uk/news/business-16548644 (accessed on 16 January 2012). Douglas Fraser. Holyroods challenge to business. BBC. 30 September 2011. Available online http//www. bbc. co. uk/news/uk-scotland-scotland-politics-15122749 (accessed on 10 January 2012). Scotlands Future Draft Referendum (Scotland) Bill Consultation Paper. 15 February 2010. Available online http//www. scotland. gov. uk/Publications/2010/02/22120157/0 (accessed on 10 January 2012). Danny Alexander. Uncertainty hurts economy. Scotland on