UK aerospace and defense firms fret over Scottish independence bid

LONDON Sun Apr 13, 2014 8:27am EDT

A worker crosses the floor of the Eurofighter Typhoon production line at BAE systems Warton plant near Preston, northern England September 7, 2012. REUTERS/Phil Noble

A worker crosses the floor of the Eurofighter Typhoon production line at BAE systems Warton plant near Preston, northern England September 7, 2012.

Credit: Reuters/Phil Noble

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LONDON (Reuters) - Britain's aerospace and defense industries warned on Sunday that the sector could lose its global competitive edge as a result of Scotland's bid for independence, which is due to be decided by a referendum later this year.

The ADS Group, an aerospace and defense trade organization, said the uncertainty over the future of taxation, fiscal and monetary policy that the September 18 referendum has generated was a major cause of concern for firms operating in Britain.

"September's referendum on the future of Scotland could have a profound impact on these sectors' global competitiveness," said ADS Group Chief Executive Paul Everitt.

"In addition to the debates about monetary and fiscal policy, there is genuine uncertainty about the impact of independence on the UK's - and Scotland's - international influence, export opportunities and inward investment."

Britain is home to a number of major aerospace and defense industry firms such as BAE Systems, Cobham and Babcock - all of whom are members of the ADS Group.

Britain's defense sector has a 22 billion pound ($37 billion) annual turnover and employs more than 300,000 people. The industry is heavily reliant on government procurement, leaving it exposed to political uncertainty.

Sunday's comments are the latest in series of warnings from business leaders across a range of sectors, including finance and energy, who are concerned about a possible end to Scotland's 307-year tie with the rest of Britain.

In their statement the ADS Group warned that a split may have far-reaching consequences, such as forcing companies into a costly reshuffling of supply chains which straddle the English-Scottish border.

"Companies are concerned about the costs and consequences negotiation and transition arrangements might have on procurement budgets, mature supply chains and highly-skilled workforces," Everitt said.

(Reporting by William James; Editing by Raissa Kasolowsky)

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