Weir Group, the London-listed but Glasgow-headquartered oil and gas engineer, has warned that a “yes” vote for independence could cost Scotland’s businesses £800 million in moving to a new currency.
In a fresh blow for the yes campaign, the Weir-commissioned research by Oxford Economics shows that businesses and households would also waste £500 million a year in transaction costs, in the event of Scotland adopting the euro.
Politicians in Westminster have consistently warned that Scotland will not be allowed to keep the pound if there is a yes vote in September.
The 80-page report also sets out concerns that there would be increased taxes and borrowing costs post-secession, while there would also be pressure on public spending. The creation of a new border could also hurt exports, given that 70% of non-oil goods and services sold outside of the country are bought by the rest of the UK.
Weir chief executive Keith Cochrane said: “For businesses, the conclusions seem clear: the costs of independence are guaranteed but the benefits are uncertain. That has the potential to make Scotland less competitive, not more.”
Weir Group is a major employer, with its 143-year-old heritage and 600 staff in Scotland.
The FTSE 100 group follows other important Scottish employers BAE Systems and Babcock International in warning that independence could threaten the economy.
Referring to Edinburgh-based Standard Life’s recent warning that it has started to register companies outside of Scotland in case of independence, the report said: “For some businesses, most notably in financial services, their customers in the rest of the UK are likely to have a strong preference to buy from domestic providers (for example, to take advantage of government protection schemes). As a result, there would be substantial pressure for those businesses to relocate the related operations out of Scotland, to retain existing clients and to ensure future growth.”
Weir also hit the headlines earlier this week when the board confirmed that it had made a £4 billion approach for Finnish rival, Metso.
