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Yes vote would be 'nightmare' for engineering and defence businesses
EEF boss Terry Scuoler leads warnings of economic damage Scotland voting for independence would have on industry
'No' campaigner John Reid with after meeting with shipyard workers in Glasgow.
'No' campaigner John Reid with after meeting with shipyard workers in Glasgow. Photo: Reuters
By Alan Tovey
3:51PM BST 15 Sep 2014
Comments30 Comments
A Yes vote in Scotland would be a “disaster” and “nightmare” for the newly independent country that would result in it losing highly skilled defence sector jobs and jeopardise investment in its manufacturing industry for decades, according to experts.
The warnings over the likely impact on the aerospace, defence and engineering sectors of Scots voting to break away from the Union came just days before Thursday’s vote.
One of the most bleak assessments yet of the likely effects of a Yes vote came from Terry Scuoler, chief executive of EEF, the manufacturers’ association which represents more than 6,000 companies employing 900,000 staff.
Terry Scuoler, EEF chief executive, says people need to 'wake up to the enormity' of a Yes vote
Scottish nationalists 'severely underestimate the economic risks of independence', says think tank
"Independence would be a disaster for Scotland, economically and politically,” he said. “People need to wake up to the enormity of the decision they are facing and the potential nightmare scenario were the Yes campaign to succeed.”
Mr Scuoler – a Glaswegian – said an independent Scotland would suffer a “long and painful” economic decline, with skilled jobs being lost and never replaced.
“The vast majority of Scotland’s trade is with the rest of the UK and it is simply fanciful to think there will be no consequences from disconnecting ourselves from our biggest market,” he added.
“The Yes campaign has sold a vision of a prosperous future. But it is an illusion, and a dangerous one at that. The reality is there would be deeply damaging implications for the economy and the living standards of ordinary Scots for decades to come.”
He called for “‘hard-headed” thinking over how to vote and said that “the truly courageous and patriotic route is to vote ‘No’ and preserve the United Kingdom”.
Polls indicating only a very narrow margin separates the two camps mean that the vote is too close to comfortably call, raising questions about the future for businesses operating in the sectors.
According to data from trade body ADS, aerospace, defence and marine companies in Scotland account for a tenth of the entire UK industry, and 800 companies operate north of the border, employing nearly 40,000 people.
“The greatest cause of damage is uncertainty and I’m afraid whichever way the vote goes a level of uncertainty will remain,” said defence and industry analyst Howard Wheeldon. “If it is a Yes vote there will be damage to businesses while there are negotiations about how the process will work, if it’s a No there will a ‘what happens next?’ attitude, especially if the vote is close.”
He said that while he did not expect companies to pull back operations to England in the event of Scotland voting for independence, the level of support indicated for the country breaking away would be an issue.
“There’s a large contingent of the defence industrial base in Scotland and it will be riven with uncertainty for a long time to come,” Mr Wheeldon said. “The permanent issue is that companies will think carefully about future investment in Scotland. They have learnt a lot over the past few months over whether Scotland wants to be in Europe or a member of NATO.”
One of the largest employers affected by the situation is BAE Systems, which has 3,500 staff in Scotland, concentrated at its Glasgow shipyards.
The company has been largely tight-lipped about the referendum, saying the vote is matter for the people of Scotland and the Government, but that "the continued union offers certainty and security” something it could “no longer rely on” in the event of a Yes vote.
However, Mr Wheeldon said it was unlikely that BAE would return Navy shipbuilding to the UK in the short-term should the vote go in Scottish nationalists’ favour.
However, ADS did flag up key concerns raised by members over independence, including increased costs through different taxation and legal systems, supply chains being rethought to avoid cross-border complexity, reduced support for exports through lower spending power and weaker global competitiveness because of diminished influence in organisations such as NATO the UN and EU.
Paul Everitt, ADS chief executive, said: “ADS members... benefit from the stability, strength and scale of the whole of the UK. The outcome of the referendum on the future of Scotland could have a profound impact on these sectors’ global competitiveness. ADS believes such economic risks and long-lasting consequences are a legitimate part of the pre-referendum debate.
“There is genuine uncertainty about the impact of independence on the UK’s – and Scotland’s – international influence, export opportunities and inward investment.”
EEF boss Terry Scuoler leads warnings of economic damage Scotland voting for independence would have on industry
'No' campaigner John Reid with after meeting with shipyard workers in Glasgow.
'No' campaigner John Reid with after meeting with shipyard workers in Glasgow. Photo: Reuters
By Alan Tovey
3:51PM BST 15 Sep 2014
Comments30 Comments
A Yes vote in Scotland would be a “disaster” and “nightmare” for the newly independent country that would result in it losing highly skilled defence sector jobs and jeopardise investment in its manufacturing industry for decades, according to experts.
The warnings over the likely impact on the aerospace, defence and engineering sectors of Scots voting to break away from the Union came just days before Thursday’s vote.
One of the most bleak assessments yet of the likely effects of a Yes vote came from Terry Scuoler, chief executive of EEF, the manufacturers’ association which represents more than 6,000 companies employing 900,000 staff.
Terry Scuoler, EEF chief executive, says people need to 'wake up to the enormity' of a Yes vote
Scottish nationalists 'severely underestimate the economic risks of independence', says think tank
"Independence would be a disaster for Scotland, economically and politically,” he said. “People need to wake up to the enormity of the decision they are facing and the potential nightmare scenario were the Yes campaign to succeed.”
Mr Scuoler – a Glaswegian – said an independent Scotland would suffer a “long and painful” economic decline, with skilled jobs being lost and never replaced.
“The vast majority of Scotland’s trade is with the rest of the UK and it is simply fanciful to think there will be no consequences from disconnecting ourselves from our biggest market,” he added.
“The Yes campaign has sold a vision of a prosperous future. But it is an illusion, and a dangerous one at that. The reality is there would be deeply damaging implications for the economy and the living standards of ordinary Scots for decades to come.”
He called for “‘hard-headed” thinking over how to vote and said that “the truly courageous and patriotic route is to vote ‘No’ and preserve the United Kingdom”.
Polls indicating only a very narrow margin separates the two camps mean that the vote is too close to comfortably call, raising questions about the future for businesses operating in the sectors.
According to data from trade body ADS, aerospace, defence and marine companies in Scotland account for a tenth of the entire UK industry, and 800 companies operate north of the border, employing nearly 40,000 people.
“The greatest cause of damage is uncertainty and I’m afraid whichever way the vote goes a level of uncertainty will remain,” said defence and industry analyst Howard Wheeldon. “If it is a Yes vote there will be damage to businesses while there are negotiations about how the process will work, if it’s a No there will a ‘what happens next?’ attitude, especially if the vote is close.”
He said that while he did not expect companies to pull back operations to England in the event of Scotland voting for independence, the level of support indicated for the country breaking away would be an issue.
“There’s a large contingent of the defence industrial base in Scotland and it will be riven with uncertainty for a long time to come,” Mr Wheeldon said. “The permanent issue is that companies will think carefully about future investment in Scotland. They have learnt a lot over the past few months over whether Scotland wants to be in Europe or a member of NATO.”
One of the largest employers affected by the situation is BAE Systems, which has 3,500 staff in Scotland, concentrated at its Glasgow shipyards.
The company has been largely tight-lipped about the referendum, saying the vote is matter for the people of Scotland and the Government, but that "the continued union offers certainty and security” something it could “no longer rely on” in the event of a Yes vote.
However, Mr Wheeldon said it was unlikely that BAE would return Navy shipbuilding to the UK in the short-term should the vote go in Scottish nationalists’ favour.
However, ADS did flag up key concerns raised by members over independence, including increased costs through different taxation and legal systems, supply chains being rethought to avoid cross-border complexity, reduced support for exports through lower spending power and weaker global competitiveness because of diminished influence in organisations such as NATO the UN and EU.
Paul Everitt, ADS chief executive, said: “ADS members... benefit from the stability, strength and scale of the whole of the UK. The outcome of the referendum on the future of Scotland could have a profound impact on these sectors’ global competitiveness. ADS believes such economic risks and long-lasting consequences are a legitimate part of the pre-referendum debate.
“There is genuine uncertainty about the impact of independence on the UK’s – and Scotland’s – international influence, export opportunities and inward investment.”
