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Economic vision needed before independence vote

Two years from now, a referendum to determine Scotland's constitutional future will be held.

QUESTIONS: Commercial concerns, as with Weir Group, will want in the run-up to the 2014 referendum to examine the economic implications for business of an independent Scotland.
QUESTIONS: Commercial concerns, as with Weir Group, will want in the run-up to the 2014 referendum to examine the economic implications for business of an independent Scotland.

With agreement reached on the arrangements for the vote, the debate on the pros and cons of independence will gain momentum.

The traditional default position of companies when asked about an issue that smacks of politics has been to say nothing.

This paper has rightly pointed out the inadequacy of such a stance in the context of the game-changing issue of independence.

I hope as many businesses as possible recognise that this is a debate where they should be actively engaged.

It is true that business needs are only one aspect of a far larger democratic discourse, but, regardless of political hue, a view shared by most voters is that building and maintaining successful companies is fundamentally important to providing jobs and wealth.

The Weir Group has a proud history of more than 140 years as a leading Scottish engineering business.

I want that to continue for at least another 140 years and it is important that the conditions exist for quality debate around what a post-independence business environment could look like.

Like any interest group within Scottish life, business reflects different points of view. Some business figures express support for independence, others favour remaining in the Union. What all business figures would endorse is the principle of a stable environment – one in which businesses can plan and invest with clarity and certainty.

The Scottish Government has indicated that more detail will be provided next year on the economic arrangements for an independent Scotland.

Until then – and depending on the economic prospectus that is put forward, perhaps beyond – the important issues for business will fall into the category of "known unknowns" – we know the environment we need to stay competitive but not how it will be delivered.

Additionally, given the Prime Minister's statement of intent, it appears likely that whatever the outcome of the vote, additional powers for Scotland will be on the agenda.

Business would also benefit from a clearer understanding of what this may mean.

Recently, I appeared before the House of Lords Economic Affairs Committee in Glasgow as their inquiry into the economic implications of Scottish independence continued.

By necessity, many of my answers were speculative.

The information and detail necessary to provide a rounded view on the implications for my own business, and many others, are largely absent. There are a number of key areas where business needs to understand, as quickly as possible, post-independence policy intentions.

From the perspective of the Weir Group, these are:

l How a coherent UK single market for people, goods and services will be maintained; how consistent will tax policy be between Scotland and England and what proposals are there for harmonisation where difference may exist?

l Regulation: Where might Scotland seek to develop its own regulatory regime and, from a UK listed company perspective, how might this impact on the existing obligations of Scottish headquartered businesses?

l People and skills: How can Scotland continue to ensure there is widespread availability of quality people with the correct balance of expertise and skills?

l Finally, what would a post-independence regulatory and taxation regime for private sector pension schemes look like?

The common thread running through these areas is their fundamental underpinning of corporate competitiveness.

If there is to be change in these areas, business logic would suggest that this must be because it will provide benefits that the status quo cannot.

That means providing the facts and figures to support change and allowing companies to plan in advance.

Ultimately, business is about the assessment of risk. That relies on a number of inputs, foremost of which is the quality of information necessary for robust decision-making. While there may be an unwritten political rule that policy detail should not be revealed too far in advance of the polls opening, for as long as business remains trapped in the realm of known unknowns, it will be difficult to assess adequately the implications for business of independence.

l Keith Cochrane is chief executive of Weir Group.

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