Fight is on to win Yes vote in the world of business

Political Editor

Saturday 29 December 2012

MORE than a decade has passed since Jim Mather and Andrew Wilson embarked on their famous "prawn cocktail offensive".

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The entrepreneur and SNP economics whizz kid toured Scotland's boardrooms with the aim of persuading business leaders of the merits of independence. The exercise was a huge success.

Their thought-provoking presentation, a blizzard of graphs and stats, opened minds. If it failed to win an army of instant converts it at least convinced corporate Scotland the SNP was serious about business and a Nationalist administration was nothing to fear. It neutralised outspoken opposition and played a significant part in the party's 2007 election victory.

The mood in the country's boardrooms feels very different today. The Scottish heads of the Institute of Directors (IoD) and the CBI took turns this week to deliver New Year messages highly critical of the whole independence debate. David Watt, executive director of the IoD, said the Scottish Government's "obsession" with independence was "not helpful right now" with the economy in desperate need of support. A day later the CBI's Iain McMillan urged ministers to bring forward their independence blueprint, due to be published next November. He said it was essential to provide businesses with "greater certainty and clarity" on how independence would work in practice.Their comments followed an Ipsos MORI survey earlier this month which showed 72% of business leaders felt independence would have a damaging effect on Scotland's business environment. Three-quarters said they had done little or no planning for a Yes vote. If that wasn't enough, Rupert Soames, the CEO of Glasgow-based Aggreko, complained that individual business leaders were afraid to speak out against independence because the SNP poured "rains of bile and ire" on them if they did. The prawn cocktails, in short, seem a distant memory. The case made by Mr Mather and Mr Wilson also looks dated now.It rested largely on an independent Scotland's ability to tackle sluggish growth by setting low interest rates and cutting corporation tax. Examples of successful, small, independent nations peppered the presentation and helped make the point.But under the SNP's latest plans, interest rates would continue to be set by a Bank of England responding to the needs of the UK economy. Hopes of an ultra-low Irish-style rate of corporation tax have also receded. The Institute for Public Policy Research (IPPR) think tank calculated in September that cutting the main tax on business profits to 12.5% would blow a £3.9 billion hole in the Scottish budget. Tellingly, Scottish Government officials didn't even bother to model a possible 12.5% rate when they last looked at corporation tax. The IPPR said a 20% rate was "more manageable" but added it "still won't be easy, requiring tax rises elsewhere, spending cuts or borrowing for the books to balance". UK corporation tax, by the way, is set to fall to 22% in April 2014 so it's far from clear an SNP-led independent Scotland would enjoy an overwhelming competitive advantage.If the business world is becoming less open to the idea of independence it comes as the SNP and Yes Scotland pitch their message to the undecideds increasingly from the left. Yes Minister Nicola Sturgeon's emphasis is placed more on backing independence to protect public services and promote social justice than create a business-friendly landscape for entrepreneurs and wealth creators.As for Mr Mather, he remains confident the business community can still be won over. Now working behind the scenes for the Yes campaign, the former MSP and Enterprise Minister has adapted his case and is talking with businessmen and women, particularly SME bosses. A good number are expected to endorse independence in the New Year as Yes Scotland's Business for Scotland strand steps up a gear. It all sounds like Prawn Cocktail II.

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Fight is on to win Yes vote in the world of business

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