The recent general election in the UK reduced that party’s number of seats in the Westminster parliament, but this has little to no effect on the Scottish parliament, separate elections for which will be held next year.
Tom Ham runs advice firm Calton Wealth Management in Edinburgh, and has recently opened an office in London.
He says he remembers in the run up to the 2014 referendum on Scottish independence, “a number of big financial services businesses made sure to have operations south of the border, and with that constitutional question still open, it is probably wise to continue to have a presence south of the border”.
Ham says the prospect of political uncertainty is likely to have a material impact on the level of investment into the country – “why would you commit capital here if you could end up being invested in a completely different country?”
One issue that could impact clients is currency. If Scotland were to become independent, the government of the day would have to decide which currency to use – sterling, the Euro or an indigenous Scottish currency.
If the country retained the use of sterling, it would mean the Bank of England setting a base rate for Scotland, while being accountable to the government in Westminster.
This could create a scenario whereby a monetary policy that is suitable – in the minds of policymakers – for the English economy, is imposed on Scotland.
The second option, of joining the Euro, would similarly mean monetary policy being set in another jurisdiction.
An indigenous Scottish currency could mean that the cost of Scottish government borrowing could be very high, as investors buying bonds in the new currency may require a substantial yield to compensate for any additional currency volatility relative to sterling or the Euro.
Budden says his firm is relatively unconcerned about the impact of Scottish independence. He says Baillie Gifford has offices and operations around the world, and clients that operate in a variety of different currencies, so he feels his firm could cope with any eventuality that changes to Scotland’s constitutional status may bring.
That is similar to the view of Rushad Abadan, group general counsel at Abrdn, who says: “As a global investment company we engage regularly with stakeholders in Holyrood, Westminster and further afield on issues relevant to our business, our stakeholders and wider society.
“We are aware that constitutional issues have been a feature of public discussion in Scotland for a long time, and while businesses generally prefer to avoid uncertainty, these are ultimately matters for the Scottish people to decide.”
