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How will Scottish independence affect SMEs?

Date Added: 28/02/2014  

Last Thursday (February 27th) Standard Life - a major Edinburgh-based savings and pensions firm - announced that if Scotland voted ‘yes’ for independence it would more than likely move its operations to England. 

Among the reasons cited by the company for its decision were uncertainties surrounding the currency to be used by an autonomous Scotland, as David Cameron’s government has made it abundantly clear it would not allow the pound to be used. Standard Life is also concerned over how interest rates would be set.

This begs the question that, if a big business is concerned about the consequences of independence, should small to medium-sized enterprises (SMEs) be worried?

A new study - commissioned by AXA Business Insurance - interviewed 500 SMEs across the UK, revealing that 52 per cent of small businesses based in Scotland were in favour of independence. 

However, the rest of Britain appeared to be less enthusiastic about the prospect as 43 per cent of English SMEs believe independence is not a good idea for their Scottish counterparts. 

Overall, the picture was murky, with 25 per cent believing it would be positive for small businesses, while 45 per cent disagreed. The remaining 30 per cent did not know whether the consequences of separation for SMEs would be positive or negative.

Unsurprisingly, Kenneth Gibson MSP, a member of the Scottish National Party, welcomed the survey. He said deciding economic policies in the country, rather than in Downing Street, is best for businesses operating in Scotland.

“For example the small business bonus scheme, creating the most competitive business rates environment anywhere in the UK. And with the full powers of independence, Scotland can achieve even more,” he added.

Darrell Sansom, managing director of AXA Business Insurance, said: "It's clear from our research that this is an issue that is very much front of mind for small businesses.

"SMEs have a lot of business critical issues to manage at the moment and the uncertainty around a possible independent Scotland will only add to those concerns.”

He added that regardless of the outcome of the referendum, it is vital that small businesses are preparing themselves for the vote to go either way.

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