CWS 3.0: September 10, 2014

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The impact of the Scottish independence referendum on jobs

On Sept. 18, Scotland will vote on whether or not to break away from the U.K. As the date approaches, recruiters and employers appear to be adopting a more cautious approach to recruitment. Results in favor of separation could bring significant changes to the Scottish labor market.

Among the issues up for debate with regard to the independence referendum, job security has proven to be polarizing.

In a 10-point plan to address the issue, Scottish Finance Secretary John Swinney stated: “Independence is not a magic wand but the plan we have published shows how future governments of an independent Scotland could tailor economic policy to put job creation first and deliver a long-term employment boost. With the right policies in place we could achieve full employment – giving our businesses a competitive edge and incentives to create more and better jobs here in Scotland.”

In order to boost employment, the Scottish National Party’s (SNP) independence plan for jobs includes:

  • Target 30,000 apprenticeships per year by 2020
  • Cut the headline corporation tax by 3 percent to encourage the creation of jobs in Scotland.
  • Boost productivity
  • Boost job creating sectors, such as renewable energy
  • Reindustrialize Scotland
  • Use overseas network of 70 to 90 embassies to boost trade

Other, however, have voiced concerns about the realities of Scottish independence and what that could mean for jobs.

The latest data from the Association of Professional Staffing Companies (APSCo), revealed that, while there are 22 percent more vacancies across the U.K. as a whole, online recruitment activity in Scotland has slowed.

And according to a survey from accountancy firm ClearSky Contractor Accounting, 62.5 percent of the company’s freelancers, contractors and self-employed professionals would vote against independence.

Overall, the economy was seen as the most important factor in deciding which way to vote. More than half (59.7 percent) believe that Scotland’s economy will suffer if it breaks away from the U.K. A further 21.4 percent expect to see a fall in assignment rates should Scotland separate from the U.K. This is compared to just 12.5 percent who anticipate a boost to their earning power.

The Report on Jobs from the Bank of Scotland revealed further tightening of conditions in Scotland’s labor market in June. Salary inflation was pushed to its highest level since the survey began, as a result of strong demand for workers and a record drop in permanent candidate availability.

Salaries also increased at a record pace in July, meaning that companies are hiring people, but it is costing them a lot more money to do so.

The Shadow Defense Secretary Vernon Coaker, during a visit to a shipyard in Scotland, commented: “One thing we know beyond a doubt is that leaving the U.K. would cost defense jobs. The U.K. government has never awarded a contract for complex warships outside the U.K.”

Until Scotland decides its future, companies are facing great uncertainty.