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Bob Collier, Chief Executive of the Aberdeen & Grampian Chamber of Commerce

20 Jun 2014

Ahead of this week’s Independence event at the AECC, and referendum on 18th September, Bob Collier, Chief Executive of the Aberdeen & Grampian Chamber of Commerce, highlights the key issues that businesses need to be aware of – including a solid understanding of the choices to be made by Scottish voters.

The Referendum is about oil & gas – in a global context. Half of revenues to North East energy companies now come from exports. We need to maintain this competitive advantage for longer than the next 40-50 years of United Kingdom Continental Shelf (UKCS) production. Oil & gas revenues from the UKCS to the public sector may help for the first 40-50 years, but the decision to be independent goes beyond this time-frame.

The two campaigns are not actually offering us either the Union or Independence. What is being proposed in the Scottish Independence Referendum White Paper is complete devolution rather than full-fat independence. It cannot be described as ‘independence’ with another country expected to provide through negotiation of a currency, a central bank and a head of state. Equally the Union has not existed in its historic form since 1999 when devolution replaced it with a modern Scotland which is taking a different path to the rest of the UK – on health, education, economic development, renewables and many other policy areas.

Politics and politicians are not the best people to guide us in our decision. Politicians are stuck in a 5-year electoral cycle. The electorate will need to take a longer view. Things like the so-called bedroom tax, higher education fees and free prescriptions are merely current politics, and not relevant to independence policies going forward.

If we vote ‘yes’, negotiations will be based on not only assets & liabilities but also institutions, According to international law, institutions stay with the ‘continuation’ state, whereas assets and liabilities are divided between the ‘continuation’ state and the ‘secession’ state. The post-event negotiations if we vote ‘Yes’ or ‘No’ will be critical, therefore. What is delivered as independence or as additional devolution may differ from what has been promised and may be delivered by a different political party after the event.

The referendum is about Europe for both business and the electorate. The consensus in Scotland appears to be that we should be part of the EU. There is no guarantee that we will be part of the EU if we vote for independence. Equally there is no guarantee that we will be part of the EU if we vote against independence.

Voters believe that the main driver of the decision will be the economy. Will we deliver better growth as part of the UK or as an independent nation? As such, enterprise matters. No future Scotland (whether part of the UK or independent) can survive without generating prosperity through business to pay the bills.

The impact on people as individuals will be crucial. The research proclaims that for most Scots “I would take 500 pounds” is a winning song, so it is no surprise that a £1,400 “Union Dividend” or a £1,000 “Independence Bonus” are both higher figures. The reality is that we are making a decision for our children and grandchildren and we are too savvy to be taken in by convenient political promises.

Voters will also weigh the evidence on the cost of change and the related pay-back period. The UK government have estimated the cost at £1.5bn. By comparison, public expenditure in Scotland is currently c. £70bn each year.

At a much deeper level, un-decided voters will weigh their emotional and analytical responses to the advantages and disadvantages of each option. In other words, the referendum is about self-determination - the kind of country that Scotland wants to be – so both the head and heart will come into play and perceptions will play a part. Perceptions of risk and opportunity; perceptions of difference and similarity; perceptions of the performance of Holyrood and Westminster.

Voters get it. It is not about the past. It is about the future. Our future. The real pity is that we have to make this decision with so much uncertainty around the two options being presented and a wider range of options, a federal approach for example, not even discussed.