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Engineering firms warn of the business risks of Scottish independence

14 Mar 14  | Engineering

Industrial engineering and manufacturing interests in Scotland, including major defence contractor Babcock, which currently runs Rosyth dockyard, warn that Scottish independence poses serious risks to their economic future.

Babcock released a short statement where it confirmed that it had informed union leaders at Rosyth, where the first of the Royal Navy's two new aircraft carriers is being assembled, that it believed national independence carried "additional risks and uncertainties for its business."

It has since emerged that a growing volume of Scotland's engineering and manufacturing firms believe that Scottish independence "would not serve the interests" of their industry, according to a recent survey conducted by Scottish Engineering.

The organisation, serving 400 engineering, electronics and shipbuilding firms in the region, and employing up to 2,500 people, said it’s survey showed that only a small minority of engineering companies backed independence, with some looking to reserve judgement until they had access to more information.

The latest findings came as three engineering unions at Rosyth said Babcock also warned that the MoD would likely cancel future military contracts at the Fife yard if there was a “yes” vote in the September referendum. Similar warnings were issued last year about BAE contracts at Scotstoun and Govan on the Clyde, where the Queen Elizabeth-class aircraft carrier hulls are currently being built.

Babcock conceded that Scotland's future was a matter for its voters but added: "As a company with a major footprint in Scotland, the possible changes to Scotland's financial and regulatory environments following a vote for Independence create, in our view, additional risk and uncertainty for our business."

Scottish Engineering said it had asked its members four questions: whether they thought independence would be good for the industry; whether that was a matter for voters and parliament; whether more information was needed on taxation or currency; or whether independence would be bad for their sector.

The organisation refused to release precise numbers of votes but said the number who ticked "would not be in the interests of the manufacturing engineering industry in Scotland' outnumbered the total of all those who chose the other three options.

Bryan Buchan, Scottish Engineering's chief executive, said: "There was a substantial response from our membership. The majority of those responding indicated that, in their opinion, independence would not be in the interests of the manufacturing engineering industry in Scotland."

Keith Brown, the Scottish transport and veterans minister, said jobs at Rosyth would be protected. His government was convinced that the UK government would drop its rules forbidding foreign yards building capital warships after independence; UK ministers have insisted those rules will be upheld after a yes vote.

"We pledge to support shipbuilding and defence jobs in Scotland regardless of the outcome of the referendum - it is a shame that no campaign politicians seem unable to do likewise," Brown said. "Let's not forget that the number of Ministry of Defence civilian workers in Scotland has been cut by almost 60% since 2000 – meaning that a no vote brings huge uncertainty for the industry."

"photo by Rob Orr"
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