Is it going to be “Yes” or “No”? The media is full of pundits giving their views and dissecting the latest opinion polls (- aren’t they often wrong anyway?). Whilst I am a proud Yorkshire man, I don’t have to go back too far in time to find Scottish and Irish ancestors.
At times like these it’s easy to step back and say, “well it’s up to the Scottish people to decide” but actually perhaps we all should have a vote too as an independent Scotland will have a huge impact on the economies of England and Wales. For example, the loss of significant North Sea Oil will have a massive bearing on our existing trade account deficit.
Whilst listening to the public debates, I stumbled on the Scottish Corporate Insolvency Statistics. I had assumed that they would follow the same general trend as England and Wales but to my surprise they differ significantly. So, for example, in Q2 2014 the number of corporate insolvencies in Scotland jumped by a massive 36%[i].
Contrast this with the fact that in England & Wales number of companies entering creditors’ voluntary liquidation decreased for the fourth consecutive quarter, and in Q2 2014 was 18.1% lower than in the same quarter in 2013, and the lowest since Q1 2008.
A similar trend was seen with English and Welsh companies entering administration – a decrease for the fourth consecutive quarter, and it was 34.9% lower in Q2 2014 than the same period a year earlier. This was the lowest quarterly figure since Q1 2005.[ii]
The reasons behind these large discrepancies is not clear. It has been suggested that many of the Scottish companies are very small, dormant companies coupled with the slightly different legal systems distorting the figures. Or maybe it is the fact that England and Wales jointly have a much more diverse industrial and commercial profile compared to Scotland which is economically dependent on fewer industries.
Whatever the reasons, in my opinion it throws up another question mark. Have we (north and south of the border) really thought through the enormity of breaking up the Union? I am not sentimental about such matters but I will show my colours and state that I think that Scotland England and Wales will be stronger working as one unit.
Investors do not like uncertainty and this applies to local investors as well as international traders. This uncertainty about the impact of the possibility of an independent Scotland sent the value of Stirling plummeting to a ten month low.[iii] If Scotland does vote for independence it will be an astronomically large task. There are so many issues – many of which have probably not even been identified yet.
[i] Insolvency News