'Job cuts protests could harm economy'

Published on Tuesday 28 July 2009 22:01

FIRST Minister Alex Salmond was yesterday warned by a leading business figure that the campaign to save 900 Diageo jobs could discourage overseas firms from investing in Scotland.

CBI Scotland director Iain McMillan criticised politicians, including Mr Salmond, for sending out the wrong message to potential investors through their high-profile roles in the campaign.

The First Minister was the most senior politician to take part in a march at the weekend that saw 20,000 people take to the streets of Kilmarnock, which stands to lose 700 jobs through the closure of the Johnnie Walker bottling plant.

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Diageo's plans will effectively end Kilmarnock's long association with the whisky, which has been linked to the Ayrshire town since 1820. A further 200 jobs are to go at Diageo's Port Dundas distillery in Glasgow.

Mr McMillan said he recognised that campaigners had a "right and legitimacy" to express their concerns. But he suggested the image presented to the outside world could lead potential investors to believe that if they set up in Scotland, they would be subjected to political interference.

"We do have to be careful about the signal we send out from Scotland to the rest of the world," he said. "We didn't see this reaction when the Japanese NEC factory closed in Livingston with hundreds of jobs. We didn't see this reaction when Motorola in Bathgate closed again with hundreds of jobs.

"I do have a concern that those potential inward investors to Scotland who monitor what's going on here could become concerned and think, 'If we invest in Scotland we will get a great welcome, but if we try and restructure our business, which might involve some closures, then woe betide you – we'll be marching on your front door'."

Mr McMillan pointed out that Mr Salmond was not the only high-profile political figure who took part in the demonstration.

"I don't want to just single out Alex Salmond," he said. "The leaders of other political parties in Scotland have been highly involved in this campaign, as well as the Secretary of State for Scotland, Jim Murphy.

"Annabel Goldie (the Scottish Tory leader] was there on Sunday, and this seems to have been a pretty common approach."

He added: "(Mr Salmond] is the First Minister, but other politicians also have to be careful about the signals they are sending to the rest of the world."

Labour MP for Kilmarnock and Loudoun Des Browne and trades unions have been among the most vocal critics.

The company has said the redundancies would be offset by the creation of 400 jobs at its packaging plant in Fife.

Diageo has said it intends to invest 87 million in a new plant in Leven, plus 9 million in a cooperage in Cambuslang, South Lanarkshire.