In a vote that was too close to call, last week the Scottish said ‘no’ to having an independent state. In the lead up to the referendum, many leading experts were unsure about what would happen. If Scotland were to gain independence from Britain, there would have been changes in both Britain and Scotland. The vote held a great deal of importance to the people of the United Kingdom. Many people worried about what would happen after the vote. If Scotland became independent from the UK, both countries would have to develop new systems. One thing that worried people a great deal was what the change would have meant to businesses. As it stands, there is free trade between Scotland, Northern Ireland, Wales and England. If Scotland were to break away, the changes in the business world would have been massive.
Currency changes and issues
If Scotland became independent, the country would need a separate currency. There is no way that the country could go on trading with the British pound if they broke from Britain. In the lead up to the vote, the pound’s value fluctuated in the international market. A ‘yes’ vote would have meant that the pound became much weaker than it is at the moment. Without the support of Scotland, the sterling would have weakened. That would mean that many UK businesses would lose out in the international market.
Many experts believe that the currency issue was one of the main reasons that most voters said no to independence. Westminster would not accept a currency union if Scotland left the UK. The Scottish people would either have to take on the euro or make a new currency. Doing so would mean that business in Scotland would lose out due to their weak new currency. Having a currency union with the rest of Europe would, in fact, give businesses in the country a worse rate than they have now.
High business costs in Scotland
Many businesses in the UK thought that an independent Scotland would mean higher business costs. The rumor was one which can about during the ‘Better Together’ campaign, yet had little evidence to support itself. Many mainstream businesses also spoke out in the lead up to the vote. They suggested that independence would mean a significant change to the way in which they trade. UK businesses including John Lewis, Asda and Kingfisher, warned the public that there would be high prices. Click here for more information on the businesses who got involved in the debate.
Business tax breaks (or lack thereof)
In the UK, there are plenty of business tax breaks which help charities and ethical businesses trade with ease. If Scotland had become independent, businesses in the country would not have had access to these tax breaks. That in itself would have made trading more difficult for businesses in Scotland. There is also an argument that it would have made trading easier for the rest of Britain as more of taxpayers’ money would be available.
Trading across borders
Because the UK is a union, it is possible for all the countries within the state to trade with complete freedom. There are no import charges or laws that prevent people from trading with Scotland. If Scotland had become an individual state, everything would have changed. That would mean dire things for businesses in both the UK and Scotland. Trading between the countries would become much more difficult. The UK would be able to trade among itself, whereas the Scottish would have trouble trading. Some people have suggested that this would push Scottish businesses to trade with Europe more often. That would mean less business in the UK and so less money.