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Scotland and the Rest of the UK: Better Together for Business

12/08/2014 10:59 BST | Updated 11/10/2014 10:59 BST

The new Queen Elizabeth Class aircraft carriers, the first of which was named by the Queen last month, are testament to the capability and quality of the UK's advanced industrial economy. The construction of the ships has employed 10,000 people in hundreds of companies in every single region of the country. What would a 'yes' vote in September's Scottish Independence referendum mean for the future of this kind of collaboration, not just in manufacturing, but in the project management and consultancy services needed to deliver such ambitious projects?

The House of Commons Business, Innovation and Skills committee, of which I am a member, has just published its opinion on the implications of Scottish independence for business. Our committee, made up of Conservative, Liberal Democrat and Labour Members from north and south of the border, concluded that on the basis of the evidence presented to us, remaining in the Union is in Scotland's best economic interests.

Many businesses operating in Scotland, either headquartered there or elsewhere in the UK, are deeply worried about what independence would mean for their future growth. The total lack of clarity from the Scottish Government on issues as fundamental as financial regulation, EU membership and what currency an independent Scotland would use has made it very difficult for business leaders, let alone the general public, to make an informed decision about the future of their country.

The fact that the Scottish Government chose not to take part in the inquiry, despite repeated requests for evidence from the Committee, shows that Alex Salmond's Ministers are persevering with their 'head in the sand' approach to the tough questions being asked of them. When discussing an issue of such magnitude, this is simply an insult to the intelligence of the Scottish electorate, who deserve to be given the clearest picture possible of the far-reaching consequences of independence before they cast their votes.

In short, our committee found that a newly independent Scotland would find itself suddenly severed from its largest export market in the rest of the UK, having to renegotiate entry back into the European Union on very uncertain and possibly materially more onerous terms, and without its own currency or a central bank necessary to set monetary policy. Re-accession to the European Union could take a long time - nobody knows how long because it's never been done before - and it's safe to say that the EU would take a very dim view of an independent Scotland hoping to join whilst using a 'shadow pound', against the wishes of an RUK Government.

The huge costs of setting up parallel regulatory institutions to oversee Scotland's large and successful financial services sector in the event of independence are as daunting as they are unnecessary. 94% of customers of the Scottish insurance industry are outside Scotland, and 84% of mortgages granted by Scottish financial instructions are for properties elsewhere in the UK. The separation of businesses from their customers in the event of independence cannot fail to be detrimental for both parties.

On education, the Scottish Government's current policy of only charging university tuition fees to students from the rest of the UK would, in the Committee's opinion, fall foul of EU discrimination law, meaning that all UK students would have to be charged fees at the same level if an independent Scotland sought EU membership.

A 'yes' vote would create further problems for Royal Mail, beyond those already inflicted by its cut-price privatization by the Coalition earlier this year. Royal Mail delivers three times as much mail in Scotland as is posted there, meaning that if the post is classed as international mail during Scotland's potentially lengthy negotiation to re-join the EU, costs would rise. The Universal Service Obligation would be put under further pressure because of Scotland's relatively higher proportion of rural addresses, which would no longer be subsidised by the urban markets in the rest of the UK.

Overall, the argument for Scottish independence is one of heart over head. Study the detail, and you quickly realise that independence would involve a great unravelling of shared and highly integrated institutions, regulators and business relationships, which currently serve Scotland well. In a time of austerity, it is easy to portray the one-stop-shop of independence as a cure for all our woes, but division and insularity are not in our country's interests. Currently Scotland enjoys the best of both worlds - devolution for domestic issues such as health, police and schools whilst enjoying the stability of being part of one of the world's biggest economies. Building on our existing partnerships is better for all of us.