Weir chief says no to Scottish independence

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The chief executive of one of Scotland’s biggest manufacturing companies has said he will vote against independence, claiming that leaving the UK would hit Scottish businesses with higher costs and risks but offer only uncertain benefits.

The comments from Keith Cochrane, chief executive at Weir, the listed global valves and pumps group, highlight growing business scepticism about the economic case for independence ahead of the September 18 referendum.

However, nationalists took comfort in separate news that broadcaster BSkyB, one of Scotland's biggest private employers, had told staff it has no plans to relocate whatever the referendum result.

Weir Group has not ruled out the possibility that independence could prompt the FTSE 100 company to consider relocating its headquarters out of Scotland, where it employs 600 of its 15,000 worldwide staff.

Mr Cochrane said the company had no official position on the referendum but he personally would be voting 'No' following the publication of an 80-page report on the implications of leaving the UK that the Glasgow-based company commissioned from Oxford Economics, an independent consultancy. 

Published in the wake of a bitter political row about currency union, the report estimated that the introduction of a new currency could cost Scottish businesses £800m to implement, as well as ongoing costs of about £500m a year.

It also warned that an independent Scottish government was “likely to need to tax Scottish business overall more heavily”, and that the prospect of lower corporation taxes would need to be set against fiscal pressures resulting from the relatively rapid ageing of Scotland’s population and declining North Sea revenues.

It added that Scottish government estimates that lower corporation tax would generate 27,000 jobs were “over optimistic”, as other countries, including the UK, were also reducing rates, and warned borrowing costs would rise.

Although the higher yields on government debt could provide a pension windfall to Scottish businesses, the report said that those with employees on both sides of the new border would face considerable new complexities, and could be forced to accelerate efforts to make up funding shortfalls.

“For businesses, the conclusions seem clear: the costs of independence are guaranteed but the benefits are uncertain," Mr Cochrane said.

His unusually direct intervention in the referendum is a setback to nationalist efforts to persuade voters that Scotland would do better economically outside the UK.

Nicola Sturgeon, Scotland's deputy first minister, reacted mildly to Mr Cochrane's comments, saying she welcomed Weir's contribution to the debate and planned to meet company managers and staff to “reassure them”.

Independence campaigners quickly pointed out that Weir had strongly opposed the creation of the Scottish parliament in the 1990s.

Separately, independence activists seized on an internal memo BSkyB sent to its 6,400 Scottish staff in Scotland, saying that it would be business as usual regardless of the referendum result.

"We like being in Scotland. And we have no plans to change that," wrote Graham McWilliam, director of corporate affairs.

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