The case for the union

Investor Angus MacDonald explains why he’s a ‘no’ in the Scottish independence vote.

Earlier this year, Angus MacDonald decided he was fed up with having no real way of showing his support for the union of the United Kingdom. So the ex-fund manager turned serial entrepreneur took matters into his own hands.

Now you can buy banners from Angus that suggest the ‘no’ vote is “worth fighting for”: go to and a 3ft by 12ft banner (like the one below) can be yours.

I went to speak to Angus after my last interview on the matter of Scottish independence, with ‘yes’ voter and Edinburgh fund manager Angus Tulloch. MacDonald is (obviously) a firm ‘no’ voter, and like Tulloch, he is involved in business, not politics. So, what are the core reasons a ‘yes’ vote would be a mistake?

First, England is “by far” the biggest market for Scottish products, he says. We rely on them wanting to do business with us. Currency and regulatory differences might change this, but there is also an issue of sentiment, he says.

If you “fall out with your brother” things get nasty quickly: it would be foolish for the Scottish to assume that a ‘yes’ vote, following an aggressive campaign, would mean that business relationships between Scottish firms and those in the rest of the UK wouldn’t be hit. Any “allegiance disappearing” could “hit the SMEs hard”.

The worry in the financial industry around this, at the moment, is capital flight: whether money will leave Scotland after a ‘yes’ vote. Has Angus seen this? Yes, he says.

It’s much discussed in the business community and, while he has most of his assets in Scotland, he is not alone in having already moved from a Scottish bank to one in the south. Why? He doesn’t want to take any risk of being forced to hold an account in a non-sterling currency and these things are better done before there is any risk of capital controls.

I tell him about an IFA who tells me that his clients are increasingly reluctant to buy Scottish-domiciled assets, including investment trusts and Sipps, for similar reasons: they feel there is risk around countries separating and they don’t want their money to be part of it.

We move to finances. We discuss Tulloch’s idea that the West must roll back the state. Tulloch reckons that an independent Scotland would do it first. Angus couldn’t be less convinced. He quotes Angela Merkel’s favourite statistic: the EU makes up 7% of the world’s population, 25% of its GDP and 50% of its social spending.

Singapore, the country that Tulloch would like us to emulate, has a public sector “proportionately 40% the size of ours”. It difficult to see how you get from here to there with a big spending party such as the SNP in power.

What about the oil, I ask – the great financial saving grace of the nationalist case? There is £1.5trn worth left. But “take away the cost of extracting it” and that’s £120bn. The oil goes to the oil companies. The state levies taxes on it: those are worth in total about £20,000 per person in Scotland. “It’s not much.”

And the idea of an oil-based sovereign wealth fund is, says Angus, ridiculous: you need a surplus before you can have a SWF. There is little sign that there will be one of those in Scotland, something that makes it clear how few of the SNP spending promises will come to fruition.

So how could Scotland “stand on its own two feet” with or without a ‘yes’ vote? We need to move from a public-sector economy to a private-sector economy. There should be no VAT for companies under £100m. New companies should get tax-free status, start-up services and government-backed loans. That would be paid for by temporarily abolishing corporation tax in Scotland, which would bump up the tax from PAYE massively. How do the SNP look at this? “They are long-term politicians, not businessmen.”

Finally, I ask Angus why non-Scots should care. We’ve been through a lot together and our families are deeply intertwined, he says. The Scots also provide a good part of our defence and, while it “might not appeal to everyone” losing Scotland would make the remainder of the UK a more politically conservative place.

Would he leave Scotland if there was a ‘yes’ vote? “Very unlikely… my family fought for the Jacobites… and there are few people as nationalistic as me”, but independence – with these leaders – just isn’t right for Scotland now.

Angus MacDonald’s CV

Angus MacDonald was a fund manager at Martin Currie until he was 26, when he left to start Edinburgh Financial Publishing. He then ran eFinancialNews Group, sold in 2007 for £79m. He invests in private waste, renewables and internet education businesses, and in forestry. He has always lived in the Highlands.

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