THREE and a half years on from the “once in a generation” vote on independence, Scotland finds itself yet again on the edge of another precipice, with the SNP Government appearing determined to force the country through another very divisive referendum campaign.

This volte-face has apparently been caused by the UK’s decision to leave the European Union. Prime Minister Theresa May has been steadfast in her refusal to accede to First Minister Nicola Sturgeon’s demands to be allowed to hold a second referendum, at least until the country knows the outcome of the Brexit negotiations.

During this period of uncertainty, the most important question must surely be - can it really be business as usual?

The short answer is no. Chief executives of publicly quoted companies tell me every week that independence would be incredibly harmful to the country’s prospects. Why would companies, faced with a choice, invest any new capital in Scotland while there are still so many unknowns?

Obvious reservations include: Can we afford independence? Would Scotland automatically be allowed to join the European Union? What currency would we use? What are the likely implications on our tax system?

Before looking at these points in more detail, it is interesting to note the mood among Scottish small and medium sized enterprises. A recent survey of 770 SMEs, conducted by accountant French Duncan, showed that 89 per cent were against holding another referendum while 86 per cent said they would vote against it.

A further 90 per cent of respondents believed the financial case had weakened since the last referendum and 86 per cent thought an independent Scotland would grow more slowly than the rest of the UK. Significantly, on the subject of taxation, 93 per cent believed taxes would increase in an independent Scotland.

According to most unbiased reports, it is highly improbable the country can afford independence. At present, Scotland’s budget deficit is the worst in the OECD at 9.4 per cent of national income. Oil revenue, often cited by those supporting separation as a reason why Scotland could prosper, fell by 97 per cent last year to just £60 million from £1.8 billion. It is, at best, ingenuous to rely on a single commodity where you have no control over price.

The ratings agency Moody’s has recently warned that Scotland’s credit status could be downgraded to junk if it goes it alone, placing it on a par with countries such as Azerbaijan and Guatemala. Among other implications, this would mean those lending to us would demand a higher interest rate.

Scotland would not automatically be allowed to join the EU despite repeated protestations from Ms Sturgeon. It is more than likely that Scotland would have to meet the standard terms for EU entry, including deficit reduction to three per cent of GDP, thus requiring a period of severe austerity.

Public spending would have to be slashed, with substantial tax rises, both on a personal and corporate level, inevitable. Brussels would demand the adoption of the euro, something the Scottish Government has yet to confirm. Interest rates would, therefore, be dictated by the European Central Bank, which attempts to set a one size fits all policy.

As a country, we would have no control over our monetary policy. The adoption of the euro would be damaging to businesses in Scotland given it is estimated that we export almost four times as much to the rest of the UK as we do to the rest of Europe. Adopting a flawed currency, and one which your closest and most important trading partner does not use, is utterly nonsensical and would add to the burden of businesses north of the Border.

The UK’s impending withdrawal from the EU will present companies, both large and small, with opportunities and challenges in the years ahead. It is imperative that businesses, while navigating these unchartered waters, do not have yet more uncertainty thrust upon them.

Craig Yeaman is investment director at Saracen Fund Managers.