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Scotland’s Fight For Independence And The Manufacturing Sector

On Thursday, September 18th, every registered voter in Scotland over the age of sixteen will be asked to answer a massively important question: “Should Scotland be an independent country?” If Scotland’s people vote “yes,” the entire structure of the UK will never look the same again, and Scotland will transform from...

On Thursday, September 18th, every registered voter in Scotland over the age of sixteen will be asked to answer a massively important question: “Should Scotland be an independent country?”

If Scotland’s people vote “yes,” the entire structure of the UK will never look the same again, and Scotland will transform from a valuable member of a four-country alliance to its own independent nation. As the vote draws nearer, both sides of the issue are speculating about what this vote will mean to Scottish finance, economy, trade, defense, and industries.

Much in unknown about what Scottish life will look like if the vote passes. Scotland’s post-UK currency is up in the air, and the strength of Scotland’s economy as an independent nation is untested. What does this mean for the manufacturing sector?

Those campaigning for a “yes” vote, led by Scottish First Minister Alex Salmond, project a 30% increase in the manufacturing sector by 2030 if Scotland becomes independent. The side voting “no” is focused on the risk factor—Scotland could be a successful nation, but it could also collapse completely and have no support system after turning its back on its UK neighbors.

The risks involved are enormous. The number of jobs remains uncertain, as major corporations siding against Scottish national independence have made threats to leave Scotland and take the jobs with them. BP and Standard Life, two large British corporations, have handed down warnings to Scottish voters. BP claims that its investment in North Sea oil fields would become uncertain if Scotland parted with the UK, and Edinburgh-based Standard Life has threatened to move its jobs and business to England if Scotland becomes independent. Similarly, France’s Thales, one of Britain’s largest defense suppliers, warns that a “yes” vote for independence would force Thales to cut jobs and investments in Scotland.

The Scottish National Party has outlined a plan for jobs if Scotland becomes independent, which includes reindustrializing Scotland and boosting the renewable energy job sector. Salmond says “we already have world-class manufacturing companies” while a former Scottish chancellor Alistar Darling asked “why on earth put a barrier between a manufacturer or a distiller and their customers?”

While the idea of independence, and seizing full control of the North Sea oil and gas in Scottish waters, seems tantalizing, Darling’s question is important to consider. The fact remains that the Scottish voters don’t know what currency they would use, how trade relations with other countries may change, if jobs will be available, etc. if the independence vote goes through.

David Nicholson, contributor to Forbes, writes that the freedom to move the manufacturing sector in a new direction that would come along with Scottish independence would ultimately be an “economic disaster.” He cites the uncertainty over the new currency (the EU will not allow Scotland to immediately join the euro) and the misplaced faith in oil and gas resources that are quickly depleting, and the recent near-collapse of the Scottish banking system as major arguments against the fight for independence.

In response to these worries, voters for Scottish independence are pinning their hopes on the chance that more Scottish power over industrial policies will result in a healthier manufacturing sector. A report issued by the Scottish government entitled “Reindustrialising Scotland for the 21st Century: A Sustainable Industrial Strategy for a Modern, Independent Nation” cites Scotland’s “proud history in manufacturing” and claims that through increased training for a more skilled workforce, cooperation between the state and manufacturing firms, and focus on innovation and research, Scotland may be able to rebuild the strong manufacturing sector. And by strengthening the manufacturing sector, the report predicts a positive impact on domestic supply chains and a circular economy.

What would independence for Scotland mean for its trade relations with the U.S.? Please comment below with thoughts about what this means for the U.S, the upcoming vote, and its implications for the Scottish manufacturing sector.

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