Scotland’s NO vote the best outcome for business owners on both sides of the border
So the Scottish people have spoken, an astounding 90% of them in some areas, and they have decided that the Union will go on – for a decade or two at least.
The British business community is rejoicing and the cheers will be heard even more loudly from the offices of SME business owners for they would have been among the hardest hit. So why would a YES vote have been so damaging? Would an independent Scottish state not have granted their business community greater influence? A louder voice on the issues which most affect them?
The answer to all of the above is ‘no one knows’, and therein lies the greatest problem. Uncertainty, in economic terms, is the greatest threat and whilst many predicted Armageddon if the YES voters had succeeded, the reality is that no economist, politician or cab driver could have accurately predicted what effect a YES result would have had on the economies of the home nations and their global influence.
The economies of all home nations are intrinsically intertwined, no more so than between Scotland and England, and most businesses across Scotland will invariably deal with English customers or suppliers on a day-to-day basis. A YES vote could have potentially severed these ties almost immediately as English businesses, aware of the sensationalist warnings put forward by the leaders of all the major parties in Westminster, would most certainly have considered de-risking and moving their business ties elsewhere.
So what were these risks and why would English, Welsh and Northern Irish businesses have been willing to potentially sever lucrative ties with their Scottish counterparts?
Let’s imagine for a moment that we woke up this morning and the Scottish people had voted for independence. Furthermore, let’s imagine waking up on that very morning as a Director or owner of an English business which has deep rooted ties above the border. What would they have been thinking? What would their main concerns have been?
Well, for a start, they would have been thinking about their bottom line and the potential for significantly increased costs caused by more red tape and an uncertain tax regime. Additionally, there would be concern the potential future for Scotland’s business landscape should banks, businesses and investors indeed pull out as had been forewarned. Would this be an economy businesses would want to expose themselves to? A slightly over-the-top viewpoint, perhaps; however, that is precisely where the commentators have taken the debate.
Increased red tape and the associated costs, as well as the potential loss of business as a result of the uncertainty and a great giant question mark summarising the short to medium term economic outlook, would all have far reaching consequences on businesses the length and breadth of Scotland.
The most exposed of these would have been SMEs who can ill afford more uncertainty just as the economy again begins to prosper following the recession. Businesses can now move forward in the knowledge that, at the very least, economic uncertainty has been avoided and may even be buoyed by increased power devolved to the Scottish parliament, which, in theory, will have the best interests of not just the people of Scotland but those of its business entities also in mind.
Whichever side of the debate you take, the result is undoubtedly good news for SME businesses across the United Kingdom.