Still distrusted but business cannot be ignored in the indyref campaign
- Latest warning is of 5% VAT on food if Scotland votes Yes
- Marc Bolland, boss of M&S, to warn of rising costs after a Yes vote
The referendum is already the biggest political betting event ever with more than £2m placed with William Hill alone. The narrowing in voting intentions has encouraged William Hill to cut the odds on a Yes vote from 3/1 to 11/4. This has the effect of slightly lengthening the No vote but odds of 1/4 from 2/9 reveals the size of the challenge facing the Yes campaign, at least as far as the bookmakers are concerned.
Maybe this confidence explains the results of yet another survey, this time of a sample of FTSE 100 chairmen by the leadership and talent consultancy Korn Ferry. It questioned 28 of Britain’s top chairmen last week and found that only a third had made full preparations for the possibility of a Yes vote. The sample is small and there is no indication as to who they are. With the FTSE 100 made up of so many overseas companies these days it may be that few of them have much interest in Scotland.
On the other hand, it does include some of the biggest companies on the London Stock Exchange and their opinions count. The findings of this survey suggests an element of complacency and even a touch of disrespect to the Yes campaign by not taking their arguments seriously enough. It undermines the message we hear so often that listed companies are obliged to alert their shareholders to any potential risk to their business. Those same shareholders may not be so happy to hear that having been alerted to the likely impact of independence on their companies there are no plans in place to deal with it.
Business generally has suffered a bruising campaign. Threats of relocation have either been overstated or else badly explained so as to create unnecessary panic among thousands of employees. Talk of higher prices in the shops has been ridiculed but it is now claimed that an independent Scotland will have to pay 5% VAT on food. Tax expert Richard Murphy says the UK’s zero rate of VAT, including on food, was an exemption agreed before current rules. There is, however, no provision to transfer this derogation to an independent Scotland. This gives weight to claims by supermarket bosses that food prices will rise. Still, no one wants to believe them.
Company bosses have always been unwilling to speak out politically for fear of retribution and the headlines this weekend of revenge being taken against the banks and others supporting the No campaign only justifies those fears. This is even more alarming and will do nothing to encourage confidence among investors in an independent Scotland. First Minister Alex Salmond will attempt to correct this perception when he teams up with Yes-supporting business leaders, including Sir Brian Souter, today to deliver a “welcome to Scotland” message to international visitors at Edinburgh airport.
Business leaders have always defended their non-participation by arguing that companies do not have a vote. That was an easy get-out, a means of ignoring the debate in the hope it would have no impact on them. But being so dismissive overlooked the fact that the people who work for their companies do have a vote and at the beginning of the year I wrote in Scotland on Sunday that it was not good enough for business leaders to hide behind their trade bodies to do their speaking for them, nor to keep their thoughts and plans within the boardroom. They owed it to their employees, suppliers, customers and shareholders to spell out what they were thinking.
For a few weeks we had a flurry of announcements and comments, providing an encouraging contribution to the debate. We have to blame the CBI for causing them to panic and leap back into the trenches. The debacle of the organisation’s registration with the No campaign left it badly wounded in Scotland and it will take some time to recover. Sadly, it had the wider and more damaging effect of deterring business leaders from speaking out. When they do, too often they are shouted down.
That’s not to say business has been silent. Entrepreneurs such as Jim McColl and Sir Brian Souter have supported a Yes vote. Standard Life, Weir Group and BP are among the big companies that have warned of the implications of backing independence. Marks & Spencer chief executive Marc Bolland is today expected to express concerns about rising costs in a new state.
The CBI’s public relations disaster handed the advantage to the Yes supporting Business for Scotland grouping, latterly joined by Dan MacDonald’s N-56 initiative which has taken a less political and emotional approach than Business for Scotland and produced a series of papers from experts setting out the case for an independent Scotland.
Their arguments have gained some traction and at least some consistency while the floundering No campaign has latterly found itself trying to herd together disjointed statements, some verging on the maverick and many from outwith Scotland. These include the supermarket bosses and some who have only just woken up to what is happening north of the border.
When the campaign began there was an assumption that with the odd exception business spoke with one voice. That has been disproved. Whichever side they have been supporting, at least enough of them have realised that this issue is too important to leave to the “people” (as if their employees are not those same people).
Business has thus found itself at the centre of the debate (over currency, tax, regulation, etc) while at the same time trying to keep a distance from it. This has made it a messy campaign for business which has suffered a bruising experience on the way to achieving its common goal: ensuring that the conditions remain that allows it to prosper.
Has it made an important contribution overall? Of course it has. But the divisions and arguments that have emerged tell us that there are yawning gaps in our understanding of what lies ahead. That is the battle that is still to be fought.
There remains a deep cynicism and distrust of business among those who refuse to accept that it is anything but self-serving. On the other hand, by revealing its hopes and fears the business community has helped develop a deeper understanding of the economy in Scotland, who runs it, and how its different parts relate to each other. Those who run Scottish operations from afar will be more aware of Scotland’s unique circumstances and hopefully more engaged with it. Whoever wins on Thursday, that has to be a good thing.