Weir chief predicts investment fall
A SEPARATE Scotland would face a ‘substantial hiatus’ in future investment, according to the head of one of the country’s largest companies.
Keith Cochrane, chief executive of engineering giant the Weir Group, also refused to rule out relocating the firm’s headquarters from Glasgow if Scotland leaves the Union.
Mr Cochrane was speaking at a conference on Scotland’s future hosted by the Institute of Chartered Accountants Scotland in Edinburgh.
He said: ‘Until the independence negotiations, we won’t know what the outlook will be and what it will mean for businesses.
‘What I do know is that it will create a substantial hiatus in future investment.’
Mr Cochrane added: ‘I know Weir would be very cautious in committing to new projects until we are certain of the answers to some basic questions, like what currency arrangements an independent Scotland will have.’ And he went on to warn that even after negotiations are settled, investors may be wary of committing to Scotland until they see how the economy performs.
The Weir chief said his firm’s choice to be headquartered in Glasgow meant that its Scottish operations run at a loss, which is offset by profits made elsewhere.
‘At the moment, we have the option to offset losses in one part of the UK with the profits we make in other parts. It’s a system called group relief. But group relief couldn’t survive independence.
‘At Weir, we estimate in 2013, the changes to corporation tax suggested by the Scottish Government would have saved us approximately £400,000 but the flexibility offered by UK group relief is worth almost nine times that figure.’ Asked if Weir would remain headquartered in Scotland following a Yes vote, Mr Cochrane said: ‘I cannot give you an answer to that question. The honest answer is I don’t know.’
Last night, Scottish Conservative finance spokesman Gavin Brown said: ‘The SNP must know it has a problem when one of Scotland’s largest industrial businesses says it would be reluctant to invest in new projects in the event of independence.
‘It’s time the Scottish Government addressed these risks, otherwise the economic case for independence will continue to be one that is completely void of all credibility.’
But David Cairns, executive chairman of Prismtech and member of pro-independence Business for Scotland, said: ‘Investment in Scotland, both inward investment and domestic investment, is booming already but we need to see more.’