This week Honey goes for a dip in Loch Lomond - free of charge for now, wonders if Glasgow will ever be a haven for centenarians, why Haudagain beats independence and what the Land and Buildings Transactions Tax might hold for us all. And if that's not enough, the Northern Isles are restless, but we're all focussed on a tiny patch of grass down south...
More info needed before indy vote, says SCC
Scot-Buzz editor Bill Jamieson finds Scots firms don’t yet feel they have enough information to make up their minds on Scottish independence.
A Scottish Chambers of Commerce members’ survey out today conducted in conjunction with eminent Scottish economist Professor David Bell and co-funded by the Economic and Social Research Council, says most Scottish businesses are unclear about the business implications of next year’s independence referendum.
The results echo evident frustration across the business community on the implications of a ‘yes’ vote ahead of the publication of the Scottish government’s White paper due in the autumn.
The SNP is placing much store on this document – perhaps too much. It says it will answer most of the questions now being raised at business meetings up and down the country.
But business owners and entrepreneurs could end up disappointed if, as many fear, the document is unable to provide much more clarity on key issues such as business taxation and regulation.
Businesses are already unsure it will provide the answers they need. A great deal will depend on the outcome of negotiations with the UK government. But these will not be held until after the referendum vote – and are conditional on there being a ‘Yes’ result.
Faced with this uncertainty there are likely to be growing demands for greater commitment to economic recovery regardless of the referendum outcome and for solid, practical commitment to measures around which Scots businesses can plan. The danger is that a policy vacuum will develop over the next 12 months with a stand-off between business and government. However, judging by latest survey evidence (see this page), Scots SMEs are more confidence about prospects over the next 12 months and many plan to recruit.
What the SCC survey, based on a sample of more than 800 businesses conducted between June 5 and 19 reveals, is that there is already an information vacuum.
Says Liz Cameron, chief executive of the SCC, “Nearly 60 per cent of businesses surveyed said they didn't know enough to take a view on whether Scotland should become independent or remain within the UK. We also found that over 70 per cent of businesses that responded expect that independence would affect their business.
“This sends a clear message to those conducting the constitutional debate in Scotland that more information is needed on key business concerns to ensure that the choice made in 2014 is based on the best evidence available about the implications of the alternatives offered.
“SCC represent businesses of all sizes and sectors across all of Scotland. While our survey found that many concerns were common across the business community, businesses in Scotland's largest cities were slightly more likely to feel comfortable that they were getting the information they needed than those in the rest of Scotland, demonstrating a clear need to make access to information and debate inclusive of all of Scotland.
“The key issues for the surveyed businesses were taxation, Scotland's status in the EU and our currency. Business needs clarity on these matters if they are to be able to make an informed judgement come the referendum.
“Scottish Chambers of Commerce will be working hard between now and referendum day to make sure that members' priorities are being addressed. This survey shows that the constitutional debate hasn't yet engaged clearly enough with the priorities of the Scottish business community.
“Today, we call on those on both sides of the debate to examine their plans and to ask themselves what more they could be doing to make sure that the Scottish business community has the information it needs.
“Scottish Chambers of Commerce are apolitical. Our members have a range of views. Our role is to make sure that those views are as informed as possible; these survey findings confirm our commitment to making sure that those taking part in the constitutional debate address our members' priorities as fully and as clearly as possible in the lead up to the referendum.”
KEY FINDINGS:
Around 58% of businesses say that they don’t know enough to take a view about the implications of Scottish independence for their businesses. On the other hand, 37 per cent seem to have a view already.
Most of the responding businesses (62%) trade mainly within Scotland. A major concern for those firms trading mainly with the rest of the UK (18%) is how independence might affect their business. The same is true for those whose main trading partner is the EU.
Those firms trading mainly with the rest of the UK are far less likely (25%) to feel that they know enough to take a view on the implications of Scottish independence on their business, compared to firms trading mainly in Scotland (39%), mainly with the EU (40%) and mainly with the rest of the world (42%).
Many businesses acknowledge that the precise outcome of independence would depend on currency arrangements and the extent to which tax/regulatory frameworks would differ in Scotland from the rest of the UK – which are, as yet, unknown.
Scottish Chambers of Commerce have already identified a number of information gaps regarding how a Scottish economy would operate post-independence. The survey has identified the number of firms citing these as important. At the top of the list, come business and income taxes, the currency and Scotland’s status in the EU. Each of these factors was identified as a concern by more than 60% of responding businesses. How the Scottish economy would be regulated (business, finance and labour) after independence was also recognised as an important information gap.
More than 70% of businesses felt that independence would affect their activities.
QUESTIONS FOR A SCOTTISH OBR
Should Scotland have its own Office of Budget Responsibility? And how could it work differently to, or better than, the Westminster model?
Proposals to set up a Scottish OBR will be studied by the Scottish Parliament’s Finance Committee. Committee Convener Kenneth Gibson MSP will announce today (Tuesday). He is calling for expert and public opinion on how such an Independent Financial Institution (IFI) should work in practice.
The announcement follows a statement by Cabinet Secretary John Swinney that with the new financial powers in the 2012 Scotland Act, an independent forecasting body would be needed to provide independent assessment to ministers and the Parliament of what might be generated as a consequence of those taxes. He plans to establish a new body prior to the implementation of the newly devolved taxes in April 2015.
The Finance Committee will examine how such a body would work in practice and to whom it should be accountable.
And he added that it wants to hear expert and public views on what powers a Scottish IFI should have and what areas of analysis it should focus on.
We think the proposal has merit in principle. However, several points immediately arise here at Scot-Buzz.
The forecasting record of the Westminster OBR has not been much better than that of the Treasury. Given the widespread scepticism even among economists about economic forecasting, how might a Scottish OBR be any better at the job?
Scottish government economic statistics are marked by a long delay in producing GDP statistics. It takes five months for quarterly data to be released – far longer than UK GDP statistics. Might an independent OBR provide ‘flash’ estimates?
Scotland already has plenty of expert independent economic analysis – the respected Fraser of Allander Institute, the Centre for Public Policy for the Regions (CPPR), Professor David Bell at Stirling University, the Ernst &Young Item Club and the work of Donald MacRae at the Bank of Scotland to name but some. What exactly would a Scottish OBR add to what is already being provided here?
If the Scottish OBR is to be independent, who will appoint its senior personnel? And to whom should it report – the First Minister, the Cabinet or the Parliament?
Should it undertake its own research or be a commissioning body, outsourcing research to independent academic/accountancy bodies?
Once established, would there be a need for a separate First Minister’s Council of Economic Advisers?
Might the money be better spent improving the quality and reliability of existing Scottish government economic data?
Economy Forecast
02 Jul
- Tuesday
- Sunny
- Wed
- Thu
- Fri
- Sat
- Sun
- Mon
Features & Analysis
Scot-Buzz editor Bill Jamieson finds Scots firms don’t yet feel they have the information they need to make up their minds on Scottish independence. A Scottish Chambers of Commerce survey out today says most Scottish businesses are unclear about the business implications of next year’s independence referendum. There is evident frustration. Will the Scottish government’s White paper answer all the questions - or will the business community still be left in the dark about taxation and regulation?
A confidence rally among Scotland’s small businesses, an upgraded growth forecast from Ernst & Young, another upbeat survey from the Bank of Scotland and signs that SME confidence across the UK is rising provide fourfold testimony of a slow but steady recovery in our economic prospects. And according to latest quarterly figures from the Federation of Small Business out this week, confidence among Scotland’s small firms is the highest it has been for a year...
SUMMER is here says George Kerevan. You can tell by the rain and the gale-force winds. He awaits global warming with some impatience. Meanwhile, the Scot-Buzz team are about to take a spot of summer gardening leave. This prompted a thought: can we divine any clues to the economic future in the garden or the allotment?
Last week Honey McBee highlighted Lesley Riddoch’s Question Time confession that she would vote Yes in 2014 and her subsequent article in the following Monday’s Scotsman enlarging on her reasons for doing so. Dr Richard Simpson, Labour MSP for Central Scotland and Fife, sent us his thoughts…
The Prince’s Initiative for Mature Enterprise (PRIME) is returning to Edinburgh to deliver further business training to help unemployed over 50s to start-up their own businesses. Earlier this year in May, PRIME came to Edinburgh for the first-time to host a one-day workshop, offering advice to aspiring mature entrepreneurs. Now PRIME is back, to deliver a comprehensive course going through the practical skills needed to set-up a sustainable business...
