The Scottish referendum is hurting investment and jobs, the CBI has warned

Britain's biggest business lobby group says the Scottish independence debate has become the focus of business concern.

by Elizabeth Anderson
Last Updated: 21 May 2014

As the UK's economic recovery gets underway, the Scottish referendum has become the most pressing concern for British businesses, the CBI warns.

The head of the lobby group, Sir Mike Rake, will say in a speech this evening that political issues are climbing up the 'risk register' for businesses and that debates such as Scottish independence have become a 'critical' factor in investment decisions.

'The decision on independence is, of course, for the Scottish people', Rake will tell business leaders at the CBI annual dinner on Wednesday evening. 'But the effects of the decision will be felt by others, including businesses - not just in Scotland but in Wales, Northern Ireland and England. The CBI has the right and duty to ask the difficult questions about issues which affect our members' interests and this country's economic future.'

The CBI attracted criticism when it recently registered as an official supporter of the 'No' campaign with the Electoral Commission. The decision provoked a storm of protest and the organisation withdrew its registration, claiming a mistake had been made.

However, it has remained a strong supporter of the union.

'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. Because our nations are so closely integrated, drawing an international border between us would create costs for businesses and households on both sides of the border,' Rake will warn.

He adds that a sterling union would lack many of the conditions 'required' for a stable currency to function.

'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,' he will conclude.

But the pro-independence group Business for Scotland dismissed his comments and said its membership has grown. 'More and more businesses here see the opportunities that independence offers them,' it said in a statement. 'They see that Scotland's economy will thrive in the hands of a Scottish Government that understands its needs.'

Earlier this month a survey commissioned by the British Chambers of Commerce suggested that an overwhelming majority of businesses in England, Wales and Northern Ireland want Scotland to stay in the UK.

In a poll of 2,400 BCC members, 85% said they wanted Scottish voters to reject independence, whilst 11% supported a 'yes' vote.

Businesses feared the split could damage cross-border trade and leave the pound vulnerable. Two thirds said no new opportunities would arise for their businesses if Scotland voted for independence.

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