Scottish independence could hinder the economic recovery not just north of the border but across the whole of the United Kingdom, a leading businessman has warned. Sir Mike Rake, the president of the CBI, spoke out about the "enormous" risks of a Yes vote in three weeks' time.
He told the CBI Scotland annual dinner in Glasgow, where Prime Minister David Cameron was speaking, that the organisation "does not see any substantive evidence for the position that independence would be economically beneficial for Scotland or the rest of the UK".
The event, at the city's Hilton Hotel, has been scaled back from previous years' events to prevent the CBI from breaching strict rules on campaigning in the run-up to the referendum. As well as making the case for the Union, Sir Mike, the chairman of BT Group and deputy chairman of Barclays, used his speech to stress the need for the UK to remain part of the European Union. "Open markets are an essential part of an open economy," he said. "If we're isolated, we cannot be our best."
Voters in Scotland will decide if the country should remain in the UK or not on September 18, with Sir Mike warning: "In three weeks' time, a Yes vote based on so many substantive questions unanswered will be a binary decision - a one-way ticket to uncertainty with no return and little likelihood of economic returns either."
But he said the UK is united by a "strong sense of pragmatism, common sense, and realism", and added: "That is why I strongly believe we will remain a United Kingdom, within a reformed European Union, focusing on what's important to everybody: growth, jobs, and prosperity for all."
While he said the decision in the referendum is "undoubtedly" for people in Scotland to make, he added: "The CBI has a right and a duty to raise questions about the referendum on issues of legitimate interest for businesses, for workers, for UK citizens.
"Our views are based only on hard economic facts, and the CBI does not see any substantive evidence for the position that independence would be economically beneficial for Scotland or the rest of the UK. Indeed, to the contrary, it is and will continue to create real uncertainty which could prejudice the recovery both in Scotland and across the United Kingdom."
The referendum, and other political events, such as next year's general election and a possible vote on EU membership in 2017, "contribute their own specific share of uncertainty", Sir Mike said. He said the UK is "currently outranking the rest of the world's major economies", adding that Scotland is a "contributor but also a beneficiary of that success".
With Scottish Government plans for a currency union between an independent Scotland and the rest of the UK already vetoed by the three main parties at Westminster, Sir Mike said the CBI "wanted to see what the Scottish Government's alternative plan would be".
Mike Rake: 'Our views are based only on hard economic facts'
He added: "The absence of certainty for such a fundamental component of the commercial environment makes it extremely difficult for businesses to plan." The CBI president went on to state that it is "already clear" that if Scotland leaves the UK it would have to reapply to join the EU, and negotiate its own terms and conditions of membership - which he claimed could potentially "create a border between England and Scotland, hampering trade between both countries".
Sir Mike continued: "The question is whether all this negotiation would match the favourable terms already established by the UK. Nothing can be taken for granted and there are no guarantees." He also stressed the importance of the UK remaining in a reformed Europe.
"The growth and jobs we need depend on our external relationships, and it's our membership of the European single market which is most crucial," he told the audience. We accept that calling a referendum on EU membership is a constitutional issue for government, but the ambiguity has already and is increasingly causing real concern for businesses regarding their future investment plans."
Sir Mike conceded that "of course the EU's not perfect", but he added that the CBI has concluded "unequivocally, that we are best served by remaining in the EU and seeking reforms which will expand our collective prosperity". He said: "We must be constructively engaged with realistic targets and timetables for that reform but, like our Union here, the advantages of the EU far outweigh the disadvantages."
Tony Banks, chair of pro-independence group Business for Scotland, said: "The 2,500 members of Business for Scotland say that the economic case for a Yes vote has been made and is compelling. Scotland more than pays her way and we get little in return. It is clear to us that UK governments do not pay sufficient attention to the interests of Scottish businesses, bewitched as they are by the smoke and mirrors of the City of London.
"200 businessmen and women signed a letter, published today, to that effect and noted that we will gain the economic powers to revitalise Scotland when we vote Yes and business in Scotland is crying out for that. Staying in the EU and freeing up Scotland's government to act on our behalf is what is in our best interests and that needs a Yes vote."
Deputy First Minister Nicola Sturgeon said: "This is a humiliation for the Prime Minister on the same day one of his MPs has defected to Ukip, exposing the deep Eurosceptic seam running through the Tory Party which is dragging the UK ever closer to the exit door of Europe. For David Cameron to be lectured by one of the UK's most senior business figures about the dangers of his in/out referendum on EU membership shows just how worried companies are about the prospect of the UK being taken out of Europe.
"For Scotland, the choice is clear - a Yes vote which will protect our place in the EU as an independent member, or a No vote which could see us dragged out of Europe against our will, shutting us off from a single market of more than 500 million people with potentially devastating consequences for jobs and investment."