Plenty has been said and written about what an independent Scotland might mean for business on both sides of the divide. But while the Treasury has not yet made much of what might happen when it cuts off infrastructure spending in Scotland, it has shown some signs of what the country might be missing out on were it to go it alone.
Earlier this month, Chief Secretary to the Treasury Danny Alexander announced that the Westminster government will allow Scotland to raise and issue its own bonds for capital projects as part of a package of measures due to come into force in 2015.
Sceptics might see this offer as something of a bribe by Westminster – an attempt to appear to be giving Scotland the freedom it needs without having to go all-out for independence.
Either way, what is clear is that by 2015, Scotland will be in a very different economic environment one way or another.
The additional borrowing powers could prove to be useful for the UK infrastructure market, if (as currently anticipated by the pollsters) a ‘No’ vote is forthcoming on the referendum. Enabling Scotland to issue bonds and raise more money through borrowing will likely give it more cash to fund new capital investment projects. With the non-profit distributing (NPD) model a flagship policy of the current incumbent, it would likely be boosted by increased public match-funding becoming available.
On the other hand, a Nationalist party defeated at the referendum might begin to lose some of its support, perhaps even being ousted at the next election. The worry is that there is no guarantee the NPD programme would survive should a different party take over from the Nationalists – just as PFI failed to stay alive once Labour had departed Downing Street.
Leaving the Union altogether, however, would be a massive leap into the unknown for the industry. Yes, the Scottish government would be able to issue bonds and launch new investment projects at its own whim. But with no currency currently established – never mind ratings from the agencies – any investment remains only theoretical at present.
Whatever happens, though, there will clearly be a big shift in the opportunities for investment in Scotland in the years ahead. The Scottish Futures Trust has insisted that it is preparing for change, and that is something that the private sector looking at the Scottish market should also be doing.