Saturday, 13 September 2014

Scottish Independence and Business

There's quite a lot of talk going around about how businesses that are nervous about independence are scaremongering, bullied into it etc. So, I thought I'd check out what businesses are supporting independence on the Yes campaign website:-

For Carole Inglis, owner of Isle of Skye Fudge Company, voting Yes is about Scotland taking control of its own affairs

Like many entrepreneurs, before running my own business I often felt like a square peg in a round hole because when I see a situation, I want to make it better. It’s easy to get bogged down in bureaucracy along the way, but if you can find the strength to adapt and sweep that away, you end up in a far better place. For me, like being your own boss, an independent Scotland is such a liberating idea.

I come from a very enterprising family, so running my own business took only a small leap of faith. My great-grandparents ran a confectionary shop in Glasgow, so when I moved to Skye 35 years ago I started to make and sell tablet using the old family recipe, which had been passed down through the generations.

I've nothing against small businesses. I run one myself. But in the context of Scottish business and post-independence it's important to distinguish where a business sits on the rentier/entrepreneur line. At the most extreme end of rentierism is a teashop outside Windsor Castle that gets a load of trade because people want to put their feet up after walking around it, and they're the first cafe. The most extreme is creating an internet service, which depends on little more than having heating, lighting and internet connectivity.

And 50 odd years ago, before most people had cars, shops were closer to being rentiers. You'd go to the butcher at the end of the road because the next one was a mile or more away. It's why the butchers that are around today are generally excellent - they sell to people coming to them for a product and service out of choice rather than necessity.

Throughout that time I’ve been active in the business community, and have always found that the Scottish Parliament is accessible to me in a way that Westminster could never be. It has a strong record in supporting small businesses, particularly through initiatives such as the Small Business Bonus Scheme.

That's a scheme where small businesses pay no rates. Although any business that has premises should. So, a subsidy to small businesses.

Looking forward, I hope that with independence giving control over tax and regulation, Holyrood can simplify the tax system and design it to meet the needs of businesses in Scotland. I’d also expect further support for employers – hiring staff in an area where there are very few jobs to go around can be scary, and you feel a great deal of responsibility.

Not sure what the author means, but that has a whiff of voting for more handouts.

Connectivity is another really important issue for communities like Skye. That means boosting broadband speeds and providing a universal service through the Royal Mail – both of which we can only see if the Scottish Parliament gets the necessary powers with independence. The same goes for improving access for tourism. It’s crucial to businesses like mine that people can get to Skye easily and see all it has to offer.

In other words, like most little fudge businesses it isn't a business that exists because it makes a great product, but because it's where people go on holiday and need to buy something local to take home to thank their neighbour for looking after the goldfish. Which are not the sort of businesses that leave if the government makes bad economic decisions. It's those that don't have to be there, like a fudge company that sells to supermarkets that operate from an industrial unit in Stirling that could move to an industrial unit in Sunderland.


Mark Wadsworth said...

"it's where people go on holiday and need to buy something local to take home to thank their neighbour for looking after the goldfish."

Hehe, nice one.

Mark Wadsworth said...

Although some of the big businesses opposing independence are coming up with fairly pathetic excuses.

These businesses operate quite happily in dozens of countries, whether Scotland counts as an extra country or not shouldn't really make much difference to them.

The Stigler said...



I've not heard much, but some of it is a bit odd, in that they're saying things based on what we don't know.

The only known real cost is about regulations and how the cost of those gets spread. Imaging a hypothetical, that Scotland tells all websites trading that they must support Scots Gaelic. The rest of the UK says that websites must support Welsh. Both are pointless nonsense, but you have to pay them as a business, and have the same costs. You own a website, you have to apply that cost 20 times more to Scotland than the rest of the UK assuming the same size market.

Now, this nonsense doesn't really affect big business much. Couple of months work on the M&S website is barely going to change the price of a pair of knickers. But to a small specialist retailer selling a few thousand items online a month, that's going to be their profit wiped out. Or they might do the sums and think that it's not worth trading in Scotland.

It's why I think independent Scotland is a bad idea. There is value to some scale for a country. Maybe not as much as Britain, but more than 5m population. They could probably do it if they scaled back government like crazy, but I don't sense much appetite for the policies of Milton Friedman up there.

Kj said...

That's a scheme where small businesses pay no rates. Although any business that has premises should. So, a subsidy to small businesses.

You mean a subsidy to the owners of the small business' premises (which may or may not be the small business itself.)

I'm not sure I think it's such a bad idea with Scotlands independence economically. Yes, there may be the additional cost of stupid regulation, but by experience, most small countries manage this just fine, in fact most countries in Europe with a pop. under 10 million do relatively well, and tend to move towards a "liberal enough" regulatory environment out of necessity. Small country regs affect primarily the home market, and to roughly affect the actors in the home market equally.