On the 18th of September
the Scottish people will exercise their right of self-determination, voting either
“Yes” to become independent or “No” to remain part of the United Kingdom. The
Union has existed for 307 years and this is a one-way ticket: if the Scots vote
for Independence there’s no going back.
Of course I have views as a Scottish
citizen, but in this publication I’ll constrain myself to offering my perspective
as founder and CEO of M8 Group (comprising petplanet.co.uk and greenfingers.com
– two Scottish based online retail businesses).
These businesses have thrived
serving the UK market from a Scottish base.
We employ 98 people, have featured as a Sunday Times Fast Track 100
company and are currently enjoying another year of record sales and
profitability. Would Independence provide us with greater opportunities or present
us with <ahem> new challenges?
A simple factual observation: if
Scotland becomes independent then the remainder of the UK (rUK) becomes an export
market; our addressable domestic market shrinks by 90%. It is of course a corollary that for rUK
based retailers the addressable domestic market will shrink by 10%.
Now I have no fear of export markets
– I’m a shareholder and NED of Endura, a business that exports more than half
of its sales – but export trade (particularly B2C trade) involves complexities
and contingent risks that domestic trade is immune from. Two obvious headline examples are currency
and trade barriers (EU membership).
There isn’t room here to cover all the
arguments but having researched in depth I can offer a fair summary: there is a
risk that over time an Independent Scotland will end up using a different
currency than rUK and/or that one of Scotland or rUK may be in the EU and the
other out.
There are other issues (e.g. the
loss of Royal Mail Universal Service Obligation) but you can guess where this
is going. To protect our businesses
against these risks we would relocate our operations to where 90% of our sales
go; jobs would move from an independent Scotland to rUK. We are not unique in this regard; a recent
Treasury report estimated that 10% of Scottish jobs dependent on rUK trade
would be “in danger” (with Financial Services and Defence sectors particularly
affected).
So these downsides for business and
the Scottish economy are clear, but I’m an entrepreneur so I seek
opportunities. I was recently able to
ask Blair Jenkins (leader of the Yes campaign) to describe the business
opportunities that Independence would create. The best he could offer was to
downplay the risks. It would appear that – like me – he is unable to see any
tangible upside from Independence.
Kevin
Hague blogs about the independence issues in detail at chokkablog.blogspot.co.uk and as @kevverage on Twitter
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