In advance of Scots going to the polls today to vote on the referendum to withdraw from the United Kingdom, WPP Group CEO Martin Sorrell has weighed in on the consequences of independence.
Speaking to Sky News' Dermot Murnaghan earlier this week, Sorrell, who has warned about the impact of Scottish independence previously, voiced his concerns that a “yes” vote would really be a response to a political argument, not an economic one.
Echoing other critics of Scottish independence, the holding company chief spoke of economic consequences, including the prospect of higher food prices and interest rates, mortgages becoming more difficult to attain and financial employees migrating to England. An independent Scotland risks become a distant player, falling far behind more powerful rivals in England, he said.
“How will (an independent) Scotland try and position itself? They will try and position themselves as a sort of Singapore or a Uruguay but when you look at the basics, when you look at the basics in Singapore or in Uruguay, their geographical position, their historical position, Scotland will be an outlier,” Sorrell said.
“Glasgow, Edinburgh will be cities that will be outliers, not at front and center in global business thinking. London actually, ironically, will become even more competitive to Edinburgh or Glasgow as a center for global corporations and I don't think in that competitive environment that a city state of Scotland will win out in competing for business. Somebody will have to pay for this and the tax yields will go down, they won’t go up. Businesses will be less profitable in Scotland as a result."
As for WPP’s own business prospects, should a vote for independence succeed, the chief executive said it would impact the company’s business throughout the U.K., not just in Scotland.
“The implications for WPP actually are not good—not just for Scotland but for the U.K. as a whole," Sorrell said. "The U.K. accounts for about 10 percent of our revenues and our profits on a global basis. As I look at WPP in the future, what we will do is spend more investment money outside the U.K. in trying to develop our business beyond the U.K. borders with increasing intensity."
Sorrell added that if Scotland sucedes, "geographically the U.K. will be diminished and the pity about this is that we are turning in and on ourselves, not growing the whole of the U.K.”