As Referendum Nears Scottish Small Business’ Confidence Drops
Two thirds of Scotland’s small firms concerned about Yes Vote impact while UK businesses remain unfazed
New research reveals that as British small business confidence has increased dramatically, Scotland’s has declined in the last three months – with Scottish firms worried that independence could have negative ramifications for business.
The research, conducted by the Federation of Small Businesses (FSB) and the University of Edinburgh, consisted of nearly 1,800 Scottish small businesses, of which 67% felt that a break from Britain would influence the daily running of their company – with one-in-five stating that it had already altered business decisions this year.
British small and mid-sized firms remain unconcerned about the impact of a possible ‘Yes Vote,’ with research from executive coaching and mentoring agency Vistage revealing that 66% remained confident. However the majority of Scottish companies identified the risks rather than benefits (54% compared to 27%) that could come with independence – particularly tax and regulatory regimes to the rest of the UK (60%), uncertainty in the transition (59%), and a weaker economy (56%).
Furthermore Scotland’s small business confidence has dropped 18 points on the FSB’s quarterly index, from +44 in the previous report to +26; whereas British business confidence increased to a record high (+41).
Although concerns seem to indicate that companies will vote against independence, the FSB’s report also revealed that business is not the most important factor for Scottish entrepreneurs. Only 18% stated that business issues are the predominant factor in Yes or No Vote decision making, with the majority stating that both business and public issues influence their decision process.
University of Edinburgh Business School’s Professor Brad MacKay, commented on report’s finding and highlighted the similarity between small and large businesses.
“While small businesses are more concerned about the practicalities of independence – how it might work – rather than some of the macro-economic issues, responses to the survey questions don’t differ markedly from other surveys that have focused on larger businesses,” he said.
“For instance, the opportunities of independence tend to relate to more access to government, or tailoring economic policy to the needs of the Scottish economy, whereas the risks tend to emphasise more specific business-related issues such as operational costs, access to customers, or the implications of independence for cross-border trade.”