CBI’s Linda Urquhart on fears about an Independence Referendum

Linda Urquhart CroppedIn a speech on the economy delivered to 600 guests at the CBI Scotland Annual Dinner in Glasgow last night, the Chairman of CBI Scotland, Linda Urquhart, expressed concern about the uncertainties caused by the Scottish Government’s commitment to hold an Independence Referendum. She talked of the “…possible damage that could be done to Scotland by the uncertainties arising from this commitment and its timing.  This is not helpful, but with that timescale committed to, I believe that business will consider it all the more important for any referendum to deliver a clear result. Independence “Yes” or “No” and no second questions which might produce an inconclusive result.”

What follows is the substance of her speech in full.

Last year I spoke about – ‘a time of opportunity for Scotland’

One year on, with the economy more sluggish than expected and the Western economies more fragile, I’ve seen:-

many businesses seize the opportunities – exports up;

some excellent examples in some areas of the public sector of innovation and a focus on economic growth;

some highly successful partnerships between the public and private sectors.

but the pressure on business continues to be relentless and more needs to be done to improve the business environment and minimise uncertainty.  Times are very tough.  And the pace of change in public sector reform is still too slow.

By this time last year we had published our manifesto for the Holyrood elections.  Much of what we called for is still relevant and it was encouraging to see many of our ideas in the party manifestos, and later appearing in the plans of the elected Government.  Aligning policy to the overriding objective of economic growth is still a challenge, it seems, and that is a challenge which must be met.

There are positive signs of public investment in infrastructure, extending superfast broadband and investing in transport projects to get the country moving.  Positive signs on retaining poundage rate parity and keeping the small business bonus, proposals for the introduction of Enterprise Zones and the development of a strategy for science and engineering.

But our members have an overriding concern about affordability and sustainability in public spending.  We applaud the plans to tackle the deficit but concerns manifest themselves around examples such as the raid on the oil and gas industry which risks shifting investment out of Scotland, in the same way as the now abandoned large retailers rates levy did.  Certainty, consistency and competitiveness on tax is the right framework for encouraging investment, which is why our Council is not convinced that the claimed benefits of devolving corporation tax outweigh the certain costs, complexities and risks associated with such constitutional change.

Anything that adds uncertainty is unwelcome.  The Scottish Government is committed to holding a referendum on independence in the second half of this parliamentary term. That is a matter for them but concern does exist in our membership about the possible damage that could be done to Scotland by the uncertainties arising from this commitment and its timing. This is not helpful, but with that timescale committed to, I believe that business will consider it all the more important for any referendum to deliver a clear result. Independence – yes or no – and no second questions which might produce an inconclusive result. The legality of any referendum must also be put beyond doubt – the constitution is a reserved matter – so the Scottish and UK Governments must work together to ensure legal certainty and a decisive result.

In our manifesto we mentioned how vital investment in learning and skills is if Scotland is to prosper.  The uncertainty around the future funding and affordability of Higher Education causes concern.

The focus on the opportunities which renewable energy offers to Scotland is very welcome but security and stability of supply and delivery at competitive prices require an open minded approach to methods of generation in the meantime and more certainty around regulation.

Business still wants to be more involved in the delivery of public services and the procurement process often still gets in the way of Scottish businesses winning contracts from Scottish public sector procurers.

On regulation, the message from our members is as much about how regulation is implemented as about regulation itself.  We readily accept that not all regulation is bad and there has been a cultural shift at the top level here in Scotland in our regulators but it is still taking time for that shift to be seen by our members in their day to day dealings with officials.

So, that time of opportunity is still with us but we need to embrace change more quickly and have ever closer alignment of Government policy with the overarching ambition for economic growth.

This dinner sees me close to the end of my two years as Chairman of CBI Scotland.  In that time I have been hugely grateful to the support of Iain McMillan and the team at CBI Scotland and to the team from CBI in London.  They all do a great job on behalf of business in Scotland and the wider UK.  The CBI is well organised to ensure that CBI Scotland can speak for business here in Scotland but also have a strong voice at Westminster direct and in partnership with our CBI colleagues in London and other parts of the UK. CBI Scotland has a substantial degree of autonomy in the wider CBI but we never lose sight of the fact that, as an organisation, we are stronger and more influential together. I think that is a good model for Scotland going forward. Thank you, Iain, to you and the team for your excellent work.

I mentioned many of the positives I’ve seen since last year’s dinner.  In my time as Chairman I have been heartened by the optimism, enthusiasm and resilience of the Scottish business community and many leaders of public sector organisations and their collective desire to do what is right for Scotland and see our country thrive.  I have been impressed by the dedication and drive of the education sector and echoing comments made by our outgoing President Helen Alexander, I have a much better appreciation of the valuable role which our Colleges play in the pipeline of skills for business.  With the talent we have here in Scotland,  indeed in this room, I hope we can rise to the challenges which the current climate throws at us and that our Governments in Westminster and Holyrood can work together and with us to provide an environment which allows us to thrive.

I am delighted to hand over the baton of Chairmanship of CBI Scotland to Nosheena Mobarik, who, I am sure, will most ably continue the work with our members and with Iain and the team to speak up for business in Scotland and continue to focus the minds of our political leaders on the policies which are required for businesses working here in Scotland to flourish.

Thank you all for your support.