Scottish independence is directly affecting UK investment and is now one of the ‘critical factors’ determining business risk, the head of the Confederation of British Industry has warned.
In a speech to be delivered at the CBI’s annual dinner, Sir Mike Rake said the potential secession of Scotland, alongside the prospect of a British exit from Europe and this week’s European elections, was increasingly clouding investment decisions.
‘We have a successful internal market of over 60 million people, and Scotland’s biggest export market, constituting 65% of all exports, is the rest of the UK,’ said Sir Mike, who was appointed president of the business group last year.
‘Ultimately, because of the range of unknown and unforeseen consequences of independence, it is difficult to see how independence would be better for investment and for jobs. The case has not been made that an independent Scotland would be better for our economy.’
The CBI caused some controversy among its Scottish members last month when it registered as an official supporter of the no campaign, allowing it to spend up to £150,000 on campaign purposes.
After a dozen members, including major universities and broadcasters resigned from the group to protect their commitment to neutrality, the CBI said it would take no active role in the referendum and asked the Electoral Commission to cancel its support.
Sir Mike also dismissed the prospect of a cross-border currency union allowing Scotland to continue as a member of the sterling area.
‘On the crucial issue of the pound, it’s clear that, even if it had been accepted (which it has not), a sterling union would lack many of the conditions that are required for a stable currency to function.
‘We have shared the pound for 307 years.
‘It took just 33 days for Czechoslovakian monetary union to collapse following the separation into the Czech Republic and Slovakia in 1993. The precise details are, of course, different, but the moral of the story remains the same.’