Cost of living

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FOR THE UNION FOR INDEPENDENCE
Effect of independence

The chairman of John Lewis on September 14 said it was “most probable” retailers would be forced to charge higher prices north of the Border. His warning echoed one issued by the chief executives of Asda and Morrisons at the end of last year when the former argued independence would lead to greater distribution costs, the need to separate Scottish branches into a different division, higher taxes north of the Border and the loss of the "major efficiencies" that come with operating in a larger market. They argued that Scotland’s more rural geography means they already have lower margins north of the Border. Both supermarket chiefs said they would be unwilling to absorb the extra costs of doing business in a separate Scotland or to pass on any additional costs to customers elsewhere in the UK[1].
Asda, the supermarket chain, which operates 61 stores and depots across Scotland, says the prospect of working within a smaller business environment could impact on costs[2]. It would be imperative for it to set up a separate Scottish business. Andy Clarke, the CEO, said
"Currently, our systems are set up for one single UK market, we use the same currency and we operate under the same rates of VAT. By operating in a market serving 63 million customers we achieve major efficiencies and economies of scale. If we were no longer to operate in one state with one market and – broadly – one set of rules, our business model would inevitably become more complex. We would have to reflect our cost to operate here".

References

  1. Telegraph: John Lewis warns Scottish independence means higher prices September 14, 2014
  2. STV News: 'Asda issues price warning over Yes vote in independence referendum' 11 September 2014 (retrieved 16 Sept)

Effect of independence

References