BP chief executive Bob Dudley wades into Scotland independence debate
American says breakaway would increase his oil company’s costs and he does not want to see Scotland ‘drifting away’.
The chief executive of BP has become the most senior busi ness leader yet to step into the Scottish independence debate by saying he did not want to see Scotland “drifting away” from the UK.
Bob Dudley claimed that “all businesses have a concern” about the referendum and his company would almost certainly face higher costs amid currency uncertainty that would not help future investment.
He made the comments as George Osborne said a currency union based on the pound would be “unworkable” in the wake of analysis by the Bank of England.
The chancellor warned that a recent review by central bank governor Mark Carney showed Edinburgh and London would need to agree public sector spending limits and a banking union, which would be almost impossible to agree following a yes vote.
He said: “Alex Salmond’s claims about sharing the currency were demolished by the governor. I don’t think a workable currency can be created.”
Osborne said Dudley’s intervention highlighted the concerns of many business leaders and especially those in the oil industry who point out that the North Sea should play a key role providing jobs and tax revenues north of the border.
There have been similar warnings from one of the big six power suppliers, SSE, plus renewable energy company, Infinis, in addition to Carney, the new governor of the Bank of England warning of the complications of a yes vote around the currency. But most business leaders have steered clear of passing judgment on such a contentious issue while drinks producer Diageo, and transport group Stagecoach, are among those which have argued that independence would not affect their investment plans.
Dudley’s comments were condemned by the pro-independence “Yes Scotland” campaign. “With independence, the continued use of sterling has the overwhelming support of the people of Scotland and the public in the rest of the UK,” a spokesman said.
In remarks following BP’s annual financial results, Dudley said: “It does not seem the right thing to me for the country [Scotland] to drift off. That’s not a company view, that’s from me.”
In a separate interview with the BBC he went on: “We have a lot of people in Scotland. We have a lot of investments in Scotland. You know there’s much debate about currency, what would happen with the currency and of course connections with Europe or not.
“These are quite big uncertainties for us and at the moment we’re continuing to invest at a pace because these projects are underway but it’s a question mark. I think all businesses have a concern,” adding: “My personal view is Great Britain is great and it ought to stay together.”
Asked in the interview whether there could be a reduction in the amount of investment being made in the North Sea, where BP continues to be one of the major participants, Dudley said: “There’s enough uncertainty and talk about it and the questions raised. It would create extra costs for our business and we would have to have duplicate centres and do things, and again the currency question … These investments they’re big, they’re underway and we want to see things develop. It depends on what tax regimes are there and it depends on currency.”
The Edinburgh government believes Scotland is entitled to a 90% geographical share of the North Sea’s oil and gas fields but such a claim would be disputed by the government in London. Alex Salmond, the Scottish first minister, has claimed an independent country could raise £54bn from tax revenues over the next five years from the North Sea.
The Scottish government was further accused of failing to tackle questions about how an independent Scotland would pay for its state pensions and for heavy debts in cross-border public and private sector pension funds.
The Institute of Chartered Accountants Scotland (ICAS) said Scottish ministers had failed to properly address the questions the institute raised on pensions last year in their white paper on independence, on how UK-wide cross-borders schemes, worth billions of pounds, would be financed or managed.
ICAS warned that Scotland’s larger ageing population was a significant issue, yet Scottish ministers were promising more generous pensions after independence.
“Affordability is a challenge for many developed countries including the UK, but the demographics of Scotland with a higher projected ratio of pensioners to those of working-age population mean that this is likely to be more of a challenge here,” it stated in an updated report on independence.Alistair Darling, head of the Better Together campaign, said that the comments by Dudley, an American national, marked the biggest intervention by a major business so far in the referendum debate.
“I hope that more companies and business leaders speak out over the coming weeks and months. This debate is far too important to be left to politicians alone,” he added.
However, the pro-independence Yes Scotland campaign dismissed the BP chief’s remarks. “With independence, the continued use of sterling has the overwhelming support of the people of Scotland and the public in the rest of the UK,” a spokesman told the BBC.
Despite the downsizing that followed the Deepwater Horizon accident, BP remains one of the Britain’s largest companies and Dudley pointed out yesterday that the North Sea had helped drive its annual profits over the last 12 months to a total of $13.4bn (£8.2bn).