Q:How do you feel Scotland’s FDI position is affected by the change in government in the UK? Does it alter the way in which you pitch Scotland on the international stage or your ability to craft FDI policy?
A:There are obviously some major disagreements about the approach Westminster will take but I’m hoping we are going to have much more financial freedom, and that’s going to be absolutely critical in the package we are able to offer. Our track record stands up very strongly and we still had some good strategic gains throughout the recession. Although the figures are down on previous years -- and there’s no surprise in that – nonetheless, we’ve managed to knock up some impressive gains, even in the financial sector – with Tesco Finance investing here, for example. I have thought for some time that in wealth management, given we do so much investment and pension management, we should do more personal wealth management on a bigger scale in Scotland. The skills are not exactly the same but are comparable. We have had some good wins against the head as it were, and are about to announce some more. We are pretty pleased, but there is no question that if we get the financial flexibility we are looking for then that’s going to assist our cause substantially.
Q:When you say financial flexibility, how much do you think you can get? You told fDi Magazine before about how you would want to be able to set your own tax rates.
A:I think we can progress substantially down that road and certainly there’s an open door on the part of the new administration to discuss that. When we’re looking at political differences we have, they are substantial – I feel the government is underestimating the necessity to be very careful about recovery in terms of public investment.
There is no question that if [Scotland] gets the financial flexibility we are looking for then that’s going to assist our cause substantially
But there is no question that financial freedom could benefit us substantially. Let’s take one good example: the [video] games industry in Scotland – a very important industry for us. It’s the sort of industry where even a tiny tweak in the tax position can yield substantial dividends. We would like to be able to do a few tweaks here and there to make sure our industry’s competitive worldwide but also to secure large reinvestments from the companies we have working here. We are progressing along these lines and hopefully we’ll be able to add that to our armoury.
Q:Do you think your bargaining power to be able to negotiate with Westminster is better or worse since the elections?
A:Better. In terms of bargaining power, the prime minister [David Cameron] has pointed out the [coalition’s] poor result in Scotland, the need to have a different attitude and style than was appreciated previously and, equally, there is real determination within the context of a fairly significant economic difficulty and political disagreement to try and find good things to do.
Q:What is your general economic outlook for this year?
A:I am much more positive than a lot of commentators but there’s a huge challenge in public finance and I think the new government is wrong to emphasise the requirement for early public sector cuts. The risk of delaying or interrupting recovery is greater than the very real risk of financial destabilisation. However, if people are confident in the longer-term position, they’ll be confident in the short-term position and you might instil a lack of confidence by going too far too early. That’s the point we’ve been making.