Derek Mackay, Scotland’s cabinet secretary for finance, economy and fair work, tells Sebastian Shehadi about his opposition to Brexit and a possible second referendum on Scottish independence.

Q: What is Scotland’s USP in terms of attracting FDI?

A: What Scotland has is quality; it’s second only to London and the south-east [of England] in terms of FDI attractiveness. We’ve got a quality of life, human resources, infrastructure and business environment that works, plus affordability. The cost of locating in Scotland is about 50% less than London. The UK is often very London-centric, but London can only offer so much. We’ve got Barclays Bank building in Scotland, creating 2500 jobs. We’ve been trying to de-risk Brexit for investment, for example through our competitive tax regime.

Scotland is doing well on exports, so we’re focusing on internationalisation, as well as on infrastructure (transport, digital connectivity) and housing (both private and public). We’re reinventing manufacturing through innovation, through our universities.

We’re going to raise our level of infrastructure spending to more internationally competitive levels, so this is an opportunity to invest, recognising that the UK has lagged behind other Group of Seven nations. We’re electrifying our railway between Glasgow and Edinburgh, for example, and Glasgow airport is expanding.

Q: Would Scotland be better off in terms of FDI attraction if it were an independent country in the EU? Is that even realistic?

A: It’s realistic. I’m in a party that is pro-independence [the Scottish National Party]. We recognise that business wants stability and certainty, so I’m delivering a competitive tax regime that’s pro-investment. However, we also want to stay in the EU. 

Any form of Brexit damages the economy. A no-deal Brexit would be particularly catastrophic and might lead to a recession. We want to try to retain EU membership, we don’t want Brexit and we’re trying to save the UK from economic self-harm. But if it happens, we’ll want to ensure that Scotland has the best of both worlds: to still have a relationship with the UK, with whom we share an island, but be part of the EU.

Q: To achieve that you’ll need a second referendum for Scotland’s independence. When is that going to happen?

A: We’ve said we’ll compromise. We’ve shouted for a differential solution for the UK so that Scotland’s specific economic needs can be recognised. For example, we’re very pro-migration and the UK government is not. We want migration because we want to grow in population to grow the economy. But fundamentally, the first minister of Scotland [Nicola Sturgeon] has said she’ll present the options to the people of Scotland after there’s clarity on what’s happening in relation to Brexit. 

We’re trying to compromise with the UK to get the least damage and least-worst option for Brexit. So we still aspire to be an independent country, but we will compromise with the UK government if we can achieve the best outcome for the whole UK, and that’s not a no-deal Brexit.

Brexit has made us pull up our socks and recalibrate our efforts and reach out internationally [especially with the EU], to show that we’re open for business. The UK’s more isolationist position is not one we share. We’ve got a deeper relationship with the US and Canada too.

Q: In the case of another national election, would the Scottish National Party side with a pro-EU Labour government to defeat the Conservatives?

A: I don’t want to speculate too much, but it appears to me that [UK Labour leader] Jeremy Corbyn is not particularly pro-EU. I just think UK politics is so turbulent it’s hard to see what coalition we might be party to. But our principles are: stay in the EU and respect the will of the people of Scotland, which voted Remain. We support a second referendum for EU membership, absolutely.

This article is sourced from fDi Magazine
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