Only tiny number of Scottish firms say yes to independence

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Just 14 per cent of Scottish firms quizzed about devolution said they wanted to break from the Union, research carried out by the Forum of Private Business has shown.

The overwhelming majority of small firms quizzed by the not-for-profit group instead said they preferred either more devolved powers (40%), or no change to the current arrangement (35%). Just 7% said they would like to see fewer devolved powers for Holyrood, with the remaining 5% undecided.

In addition, only a quarter (26%) of Scottish firms felt a referendum on separation would be harmful to their business, with the most common fear cited as some form of backlash or resentment south of the border.

Around 10% felt that the referendum campaign could be advantageous to their business, but the majority (47%) believed there would be no adverse effect.

“The results of our survey show two important factors, the first and most important is that there seems to be very little appetite from SMEs in Scotland to make a break from the rest of the UK – not something the SNP will want to hear,” said the Forum’s Senior Policy Adviser, Alex Jackman.

“The second point to note is that there does appear to be a broadly equal consensus from business for either keeping the current status quo (35%) or, for Scotland to get more devolved powers (40%).

“As for the effects of a referendum, there remains a lot of uncertainty as to the perceived effects, if any, one would have for small business north of the border. There are plenty who fear it will damage trade ties with the rest of the UK (25%), particularly England, but there are many more who think it will have no impact whatsoever (47%).

“The main concerns for those who thought it would be damaging were alienation from the rest of the UK, with increased resentment towards Scotland and even reduced sales as a result. There was also a fear that uncertainty over the future could lead to a lack of investment.”

He added: “There’s certainly no common thinking on this yet. What is clear though is that Scottish businesses want to retain good links with the rest of the UK, particularly England, and do not want to harm trade links.

“And those that cited a preference for full independence also highlighted issues that resonate with the UK mood generally, in terms of creating a more balanced economy and a greater focus on decentralisation of control.

“The research also showed there is particular concern about taxes and whether they would go up or down in the event of independence. Some firms believe business taxes will rise if the country gains independence, while others believe they will fall. This really highlights the lack of clarity from the Scottish Government on this aspect of independence and we would urge them to set out the full details at the earliest possible opportunity.

“While the consultation document has been published and there have been suggestions that corporation tax would be cut in the event of independence, we have yet to see full details of the proposed new taxation regime. This must happen at the earliest opportunity in order to provide clarity and remove uncertainty for SMEs, as uncertainty will harm the Scottish economy.”

The study showed nearly three quarters (72%) of Scottish businesses thought there were advantages to being based in Scotland as opposed to elsewhere in the UK. Advantages were customer loyalty, less stringent public sector cuts and cost of competitors distributing to their local market. The major disadvantage was the cost of distribution that has been exacerbated by fuel duty rises.

57% reported that their proximity to customers was a benefit and 33% reported that they had good access to skilled labour. 21% saw benefits to being close to businesses in a similar industry and a similar number felt that they had the advantage of being able to share resources with other organisations. 17% reported that they were close to their suppliers.

Businesses also felt that the Scottish Government was marginally more supportive of smaller firms than other politicians, although a majority still felt that all politicians were the same and did not understand small businesses.

Added Jackman: “The fact that Scottish firms largely feel better off about where they are at present in relation to elsewhere in the UK could well explain the small number who currently support full independence. Many SMEs will be thinking, particularly in the current climate, ‘if it’s not broken why fix it?’.”