What if Scotland left the European Union?

The Labour leader, whose uneasy relations with the corporate sector dominated the rest of the week's news agenda in less helpful ways, took out a full page in the Financial Times to claim that the biggest threat to British business is the threat of a referendum on EU membership.

In a speech in London, Miliband added that the proposed referendum was a "clear and present danger" to the national economy and jobs and that the prime minister was "playing fast and loose" with Britain's EU membership.

Europe is the one part of Labour's platform likely to go down well with business leaders north and south of the border, including in the right-leaning City of London. As Miliband has calculated, many bosses are jittery that a Conservative win on May 7th will lead to a "Brexit" following a promised referendum on EU membership in 2017.

The rise of UKIP and the Tory pledge have certainly put a question mark over Britain's EU status. But the political potency of the "risk" to UK membership prompts urgent questions as to the implications for Scotland's economy and businesses if we left.

David Cameron has vowed to campaign for the UK to stay in the EU, but only if unspecified reforms are agreed to in Brussels. Meanwhile the SNP says that Scotland should be able to veto the result of a referendum result to leave, to stop a supposed Eurosceptic majority in England inflicting a Brexit on a supposed Europhile Scotland.

Last month Gerry Grimstone, the chairman of Edinburgh-based Standard Life, told a conference on how to maintain Britain's competitiveness as a financial centre that leaving the EU would be "disastrous" for Britain.

"Why on earth would we not want to be part of one of the biggest markets in the world?" the chairman of the UK's fourth largest insurance companies asked. "Our whole energy should be devoted to that."

It was not the first time that Standard Life's top brass have warned of the consequences of a so-called Brexit. In February, Standard Life Investments chief executive Keith Skeoch said that the "biggest risk from the election is the possibility of an EU referendum".

Responding to Grimstone's comments, and taking a leaf from the Yes campaign's referendum playbook Robert Oxley, the campaign director of the Eurosceptic Business for Britain group said that it was "wrong to join in the scaremongering that life outside of the EU would be disastrous for the UK.

"Britain inside a significantly reformed EU, or outside with the right deal would be in a far better position than if we stick with the status quo or only pursue timid reforms," he said.

Grimstone's comments came only a day after a report from the liberal-minded Open Europe think-tank, which frequently takes a critical stance on the EU, warned that leaving the EU customs union and single market could lead to the UK's GDP shrinking by 2.23 per cent - some £56 billion a year - by 2030 . The report concluded that all of the UK's exporting sectors would experience disruption and uncertainty in the event of a Brexit.

Mats Persson, Open Europe's director, said that that UKIP leader Nigel Farage needed to come clean about whether he wanted a "Hong Kong-Britain with very liberal policies, including on migration, needed to make us competitive" or a "North Korea-style Britain" of closing borders and shutting the world out which would make the country less competitive.

Open Europe warns that leaving the EU could lead to the introduction of up to 10 per cent tariffs on car exports to the EU, an average of 20 per cent tariffs on food and drink exports and no access for Britain's financial services industry to the EU, which accounts for £8 billion of Scotland's GDP.

As Britain's financial services companies run a large surplus in trade with the rest of the EU, the sector - which account for about 10 per cent of UK GDP - would be particularly exposed in the event of a Brexit, the report says.

The CBI, meanwhile, calculates that Britain's membership of the EU is worth up to 5 per cent of GDP, or as much as £78 billion a year. Conversely, UKIP claims that membership of the EU costs the UK 5 per cent of national income a year. UKIP also claims that the UK will thrive outside the EU and that Britain will be able to keep almost all the benefits of membership while losing burdensome regulatory requirements.

Owen Kelly, the chief executive of the trade body Scottish Financial Enterprise, warns that leaving the EU would severely limit the ability of financial services companies to sell into the European single market of 500 million people across the EU's 28 member states.

Kelly also says that the uncertainty created by a referendum would be less than helpful for companies in the sector, as any referendum would be held before the conditions of exit have been negotiated. This could threaten investment as well as business and consumer confidence.

The ability of Scottish banks and asset management companies to grow in the EU is largely dependent on the ability of companies to "passport" their funds into Europe, says Kelly, and a Brexit could force banks to move parts of their operations to EU financial centres such as Frankfurt, Paris or Dublin.

Kelly also warns that, outside the EU, financial services companies wanting to sell products into Europe would still have to comply with EU regulatory requirements, but the UK would lose any say in how regulations are created.

"We are keen to see the single market go deeper and further as that would give us more opportunities for business and make our industry capable of servicing more customers," Kelly said.

Another public limited company with a major presence in Scotland is the drinks conglomerate Diageo, whose chief executive Ivan Menezes last year said that Scotland was better off as part of the EU.

The boss of the world's largest drinks company, and maker of Johnnie Walker, J&B and Talisker, said it was "extremely important" that Scotland remains a part of the EU, both for Diageo and for the Scottish whisky industry as a whole, and that it would be harder to sell British-made brands across the world without the advantages of the EU's 31 international trade agreements.

If the UK was outside the EU, it would have to renegotiate tariff deals without the leverage of being part of the world's largest trading bloc, Menezes said. Fifty-five per cent of the Diageo's UK and Irish production is exported to EU countries.

Liz Cameron, the chief executive of the Scottish Chambers of Commerce told the Sunday Herald that it would be "complete madness" for Scotland to leave the EU, which accounts for 46 per cent of Scotland's exports valued at £12.9 billion a year.

"By all means, let's have a debate regarding reforms, but do we really need a public referendum and yet more uncertainty?" she said. "Scotland has just come out of a referendum and we would rather focus our energy and efforts into growing our economy."

Last year a survey of 800 Scottish firms by the Scottish Chambers of Commerce found that 61 per cent believe that leaving the EU would have a negative impact on their business.

A separate survey of 400 Scottish companies found that 86 per cent exported to Europe compared with 65 per cent to the Middle East and Asia and 55 per cent to the Americas. This survey found that 59 per cent of businesses do not think that the UK should leave the EU, 30 per cent did not know and 11 per cent wanted to leave the EU.

In the run up to last year's referendum Scotland was repeatedly warned by London that there would be no going back on independence and it is likely that the UK would receive a similar message from Brussels if a referendum on EU membership goes ahead in 2016 or 2017. Next month's UK general election will be followed by more than usual interest by other national capitals as a Brexit would re-define the UK's relationship not just with Europe but its role in the world for the 21st century and beyond.

What are the UK's options if it leaves the EU and what would the process entail?

If the UK votes to go, formal departure would come two years after formal notification. During that time the UK would largely be in limbo as it would lose its representation on the European Council of member states' leaders. Thereafter Britain would have three options:

- following the example of European Economic Area (EEA) countries (Norway, Iceland and Liechtenstein) which are also members of the European Free Trade Association (EFTA) and implement most EU legislation (but have no say on its formulation). These countries pay a membership fee in return for tariff-free access to import and export markets. This option would mean that the UK would no longer be part of the EU's common agricultural or fisheries policies.

- following the looser Swiss model, where the UK would apply to join just EFTA and would then have to sign bilateral trade deals with the EU. Switzerland's one-off agreement with the EU is widely seen as an unviable option for the UK. The regulatory burden would be less than with the 'Norway' option, but would probably entail reduced access to the single market. Switzerland has to agree to the free movement of people as part of the deal.

- the third option is a full break with the EU, whereby the UK would make no financial contribution to the EU and would have no requirement to implement any EU regulations. However, as thousands of EU regulations have been transposed into UK law over the last 42 years, it would be a long and complex process to rewrite them. The Institute of Directors has warned that in order to continue exporting to the EU, British businesses would in any case, have to continue to comply with many regulations after it left the bloc, so dismantling rules might serve little purpose. Much of the EU's consumer legislation, which cap roaming charges for mobile phone calls or guarantee compensation for late flights, are also popular with voters.

Advocates of a Brexit claim that if Britain leaves the UK it would be able to control immigration from EU countries, which Britain does not have the right to do at the moment. But it is likely that the price that the UK would have to pay for access to EU markets would be the free movement of EU citizens. Any changes to the right to freedom of movement would also impact on the rights of the two million UK citizens who currently live in other EU member states.

Case studies

Gordon Robertson, founder of £1m turnover EcoEnergy of West Lothian which supplies energy-saving technology, said that working in both Italy and Dubai had highlighted the relative ease of doing business within the EU. Exporting equipment to Dubai, for example, required "far more paperwork". Robertson, who employs four highly-skilled multi-lingual Polish engineers as part of his workforce of 18, said that the ability of UK companies to recruit across the EU is important for many companies in the high-tech or engineering sectors. "We have got a lack of skills and being able to plug skills gaps is vital," he said. "The ability to access a wider labour workforce is of enormous advantage. We need fewer borders not more and we should be encouraging more free trade wherever possible. The relationship between the UK and the EU is working well."

Robertson believes that Scotland is more likely to vote to stay in the EU than the rest of the UK but does not believe that such a result should prompt a second Scottish independence referendum.

John McKerchar, managing director of Turnberry Rug Works in South Ayrshire and a contract manufacturer for a Danish company, says that the UK leaving the EU would almost certainly add to his company's export costs. McKerchar, whose company employs six people, says that "leaving the EU would create a lot of headaches and additional shipping costs". McKerchar, who previously ran a medical devices company with more than 100 employees, said that there would also be a negative psychological aspect to a Brexit. "Being within the EU makes for a much more comfortable working atmosphere," he said. "It is the feeling of being within the single market that makes it as easy to deal with a customer in Berlin as a customer in Birmingham". McKerchar believes that if the rest of the UK voted to leave, Scotland should hold a second independence referendum as "it would have very serious consequences for all of us if we are not within an integrated EC over the next generations".

Ann-Maree Morrison, founder and managing director of Labels4Kids, a Stirling-based e-commerce company which makes labels for children's clothes, fears that a Brexit would lead to falling exports as potential customers in EU countries would be worried about their consumer rights when buying from a non-EU country. Morrison's main exports are to Germany, France and Sweden. As an e-commerce company, Morrison says she would welcome more EU integration and harmonisation of, for example, VAT levels. "Having the same currency would also save a lot of headaches for us as a website," she says, while admitting that the chances of the UK joining the euro in the medium-term are small. Labels4Kids has an annual turnover of around £300,000 and employs between six and nine people, depending on the time of year. She believes that Scotland is more likely to vote for staying in the EU than the rest of the UK but does not believe that such a result should trigger a second Scottish independence referendum.