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Scottish independence: Aye or nae?

22 August 2014
Scottish independence: Aye or nae?

With a month to go until Scotland votes on whether to stay in the UK or go independent, David Harris asks what it all means for the Scottish hospitality industry

The United Kingdom may not feel like a nation on the brink of breakup, but the Scottish independence referendum, just one month away, makes it possible. The polls, broadly speaking (see panel), suggest that Scotland will remain in the UK, but it's by no means a certainty and some say (with fear or hope, depending on their position) that the gap is narrowing in favour of independence all the time. It's worth remembering too that Alex Salmond, leader of the Scottish National Party, is a strong finisher. For the unionists, there is no room for complacency.

Would independence make much difference to hospitality? Yes, say many of those in the industry, but just as in the country as a whole there is little agreement on whether that difference would be a benefit or a penalty. For someone such as Andrew Fairlie, perhaps the highest-profile chef advocating independence, the benefits, as he outlines here, would be incontrovertible. He believes that on its own Scotland would be able to institute a friendlier taxation system (lower VAT and air passenger duty), and promote its unique identity with far more vigour.

Paddy Crerar, chief executive of Crerar Hotels, agrees. A Scottish government would be able to give the Scottish hospitality business bespoke solutions, he says.

Others disagree. Beppo Buchanan-Smith, owner of the Isle of Eriska hotel and perhaps as famous an opponent of independence as Fairlie is an advocate, stresses the damage that has already been done by the campaign, let alone the potential adverse affects of a Yes vote, as he sees it.

What the hospitality industry needs, he argues, is stability, consistency and predictability. Whatever else the sector has had for the past year, political predictability has been absent.

Restaurateur Ron Kitchin, father of chef Tom, is another who dismisses independence on economic grounds. It would be worse for the economy and for hospitality, he says. Why introduce new borders? The economy is exactly what would get better for an independent Scotland, say the nationalists, to the tune (and the SNP has put a figure on it) of £1,000 a year per head. The British government, on the other hand, confidently predicts that the Scots would be £1,400 a year worse off per person.

Tania Dixon, managing director of Edinburgh foodservice firm Ginger Snap, is among those who believe Scotland would be worse off
economically if it became independent.

"I don't think the Scots could afford it and quite a few of the bigger firms, who are good clients for hospitality, might just run away to England," she says.

But it's not all about money. Scotland would get more democracy too, say the nationalists. Scotland and England have taken different paths in the last 30 years and many in Scotland still deeply resent the effect of Thatcherism on a once strongly industrial economy.

That resentment can sometimes make the Scots feel like voting for independence on principle, says Dixon, adding: "I think a lot of them haven't really thought about it. They just don't like England."

Those in favour of independence argue that it is hard for the Scots to make their voices properly heard at Westminister when London has more MPs than all Scotland. Ah yes, responds the Better Together campaign, but the previous two prime ministers (Tony Blair and Gordon Brown) were born and educated north of the border, so it can hardly be argued that Scots are ignored in the British political system.

Besides, say the unionists, Scotland already has its own legal system and the Scottish Parliament has authority over health, education and housing, which affect everyone who works in hospitality.

The division over independence has made some in the hospitality industry reluctant to talk about it all. Buchanan-Smith says: "A lot of
people don't want to say, but there are some of us willing to put our heads above the parapet."

Fear of friction
Foodservice firms seem particularly cagey, says Ray Lorimer, chair of the Scotland branch of the Institute of Hospitality, perhaps because
they are concerned that their views will be at variance with some of their big clients. The division of views is close enough to 50/50 to
make expressing any opinion at all likely to spark disagreement. A lot of caterers would rather avoid any friction with customers.

was attended by 170, the second, in Glasgow, by 120. In both cases, more attendees seemed to be against independence than for it.

Furthermore, adds Lorimer, there was a bigger percentage against independence at the end of each debate than at the beginning.

The pre-debate poll in Glasgow, for instance, gave a 62% No vote compared with a 70% No vote afterwards. But whichever way the hospitality sector's votes fall, there is still the question of what happens if Scotland as a whole votes in favour of independence on 18 September. Even for those who don't feel strongly either way, this is a bit of a worry.

If Scotland does vote to go it alone, then Edinburgh would have to negotiate with London on issues including security, the status of the pound sterling in Scotland and the division of the UK's assets. It would not be easy, especially as, for instance, the UK government continues to insist that an agreement to share the pound is not on the table.

There will also be change if the vote is No, as Tom Lewis, the owner of Monachyle Mhor in the Loch Lomond and Trossachs National Park, is quick to point out. That change would chiefly come about because the UK government has promised Scotland further devolved powers if it stays within the UK.

Lewis came to Scotland from South Wales 30 years ago and is one of those who falls into the Better Together campaign on economic grounds. As someone who has adopted Scotland enthusiastically as his home, he argues that, contrary to the independence camp's arguments, Scotland is in rather a good position economically within the UK.

He says: "At the moment we have our cake and get to eat it. People keep moaning about London, but I think London is fantastic.

We're lucky to have one of the world's great cities relatively close to us. It gets millions of visitors, a lot of whom visit other places, such as Scotland."

Lewis believes the vote will be tight, but that it will probably be No in the end. "One thing I think is happening is that a lot of people are saying to their friends they will vote Yes but when they get to tick the form, it will be No," he says.

And that neatly sums up part of the problem with assessing the Scottish independence referendum. With so much history, politics and emotion sloshing around the electorate, every prediction needs to be followed by a qualifying "unless…".

What do the polls say?
Most polls still indicate that Scots will reject independence - but only just. Early in August The Independent's poll of polls, which excludes don't knows, reported that 43% were intending to vote for independence compared with 57% against. Polls put together by The Scotsman newspaper came up with identical figures.

But the situation is complicated because those advocating independence claim that excluding those who haven't yet made their mind up, or at least revealed their thinking, is an important error.

They argue that the Yes vote is continuing to grow and that many of the don't knows will end up voting for independence. Some polls support this position.

A TNS poll, for example, taken a month ago, said the No lead had fallen to single figures for the first time in months, making the 18%
don't knows clearly crucial. The latest Ipsos-Mori figures, on the other hand, say 54% will vote No and 40% Yes, while 7% don't know.

Even so, academics seem to believe that ultimately Scotland is unlikely to vote for independence. A study by the University of Stirling
published in July estimated that there is a 79% chance that voters will reject independence, up from 70% in April.

A YouGov poll for The Times supported this position, finding that the No vote was growing, partly because the independence campaign was struggling to convince voters that a split would not harm the Scottish economy.

This all suggests that those advocating independence who say that the Yes vote is growing are simply wrong.

But polls can be wrong too. In the end the ballot box will decide the matter and nobody is betting their hotel or restaurant on the result. If they did the bookmaker's odds, at the time of writing, are unequivocal. A Yes vote is 4/1, a No vote 1/7. As far as the bookies are concerned, Scotland is odds-on to remain part of the UK.

YES V NO:RESTAURANTS

YES: Andrew Fairlie, chef-patron, Andrew Fairlie at Gleneagles, Perthshire I am absolutely in favour of independence. The closer we get to the vote it is becoming clearer that the Yes vote is closing in and I think that the momentum is going to be quite difficult to stop - people are just waking up and getting engaged in the debate.

In terms of the hospitality industry I think that tax is one of the important issues. The Scottish government has already announced that it would cut air passenger duty by 50% and I know from my own discussions with them that it will look closely at cutting VAT too. If it does decide to reduce air passenger duty, it could result in airlines putting on more direct flights to Scotland, which would be very beneficial to us.

Tourism is a bigger factor for our economy than it is for the UK as a whole, so control of this type of taxation and legislation would be an obvious advantage for Scotland. The Scottish government has done a lot already to help companies in the food and drink sector to explore new export markets such as India, China and South America. Scotland recorded an all-time high of £5.4b in exports in 2011 in this sector alone, and has since run a successful national promotion campaign called 'Scotland, the Land of Food and Drink'.

But with independence we could achieve so much more. Full control over taxation and revenues would mean that Scotland could lead the way and better promote its unique identity overseas.

NO: Ron Kitchin, managing director, the Kitchin, Castle Terrace restaurant and the Scran & Scallie
I cannot see why, in a world of greatly reduced borders, we would want to come up with yet another boundary. The proper attitude should be
to say to everyone: "Come in, hello, you are very welcome." Frankly, I have not heard a sustainable argument to answer that in any of the discussions I have attended.

If the vote turns out to be Yes to independence, what happens when we are abroad and need help? At the moment we go to the British embassy. Are they planning to set up a worldwide network of Scottish embassies?

That would be very expensive. And what about the currency? We still have no real answer on that. All our suppliers are concerned about what is going to happen because they worry about the unknown. Where will they be allowed to fish, for instance?

Our visitors don't understand it either. Outside the UK the biggest number of our customers are Americans and they are always asking us: "Why would you do this?" The whole proposal seems like madness. This is nothing to do with being Scottish. I am incredibly proud to be
Scottish, but I am also proud to be British. The idea that voting against independence is somehow unScottish is a nonsense. I can't find many people in the industry who are saying Yes, but for those who have thought about it and do so, fair enough.

I think it is very important that whatever the result there is no silliness afterwards. Either way, we have got to be better together.

YES V NO: HOTELS

YES: Paddy Crerar, CEO, Crerar Hotel Group Scotland would be far better served by a Scottish government able to apply bespoke solutions to Scottish issues. The weight of southern-based interests is too great for any government to resist and stay elected - London has more MPs than all Scotland and that underlines just how hard it is for Scotland's interests to be properly represented.

The Scottish economy already has independent strength and depth, owning 80% of Europe's carbon assets, 25% of Europe's fish stocks, 25% of Europe's renewable opportunity, and so on. The UK hospitality lobby is proportionally far smaller than an independent Scotland's would
be. VAT is anti-competitive for us. Air passenger duty is designed to raise revenue based on the long waiting list for slots at Heathrow Airport.

On corporation tax Scotland could emulate Ireland's low rates to attract corporations to headquarter here - it's a proven winner in many countries of our size.

Then there are our people and their ability to make things happen, as we have over centuries, regardless of circumstances. A country of this size has the opportunity to be nimble and move much faster than at the moment - and without the permission of the London bubble.

The UK would prosper far better by allowing the island's people to take responsibility for their own destiny. It is like a family growing up and making their way in the world. We are still family and would be there for each other in times of trouble, just as the UK has been for its cousins in Ireland and Europe at different times over the centuries.

NO: Beppo Buchanan-Smith, owner, Isle of Eriska hotel, Benderloch, Argyll I am proud to be Scottish. At the Commonwealth Games opening ceremony I cheered Scotland emotionally when our athletes came in. But
I still feel that we are better off as part of the UK. VisitBritain is a stronger marketing brand than VisitScotland. Ambitious staff want to work
in London, not Edinburgh or Glasgow. But one of the main worries I have about the whole independence campaign is that our industry survives and thrives on consistency and predictability. The problem is that the past few months have been anything but that because the question of Scottish independence in itself raises uncertainty.

What about the tax issue, for example? North Sea oil is not the golden goose that everybody says it is. So I don't think Scotland would be better off on its own.

And the currency? There is no real clarity to what might happen. Border controls? Employment? All these questions are unanswered,
or at least not answered convincingly, by the Yes campaign.

I also think that one of the big issues is that on 19 September a large portion of the population are going to be unhappy because they won't have got what they wanted. Whichever way you look at it, up to 45% are going to be upset. I hope it's 40% or 35% but it is going to be a significant number. That in itself is likely to be a problem for us, and after the referendum it is going to be important for the winners to be generous and inclusive.

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