Taxpayers may foot the bill to rescue Scottish drink jobs

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PUBLIC money could be used to save hundreds of jobs being axed in Scotland by drinks giant Diageo, despite its multi-billion-pound balance sheet, First Minister Alex Salmond has said.

The Scottish Government could channel money through Scottish Enterprise to help the company avoid sacking a total of 900 staff at its Johnnie Walker plant in Kilmarnock and its distillery in Port Dundas, Glasgow.

Mr Salmond met Diageo chief executive Paul Walsh yesterday, along with Scottish Enterprise boss Jack Perry, for talks that were described as "constructive" by the First Minister.

Ministers, union officials and Scottish Enterprise are trying to form an alternative business plan for the company and hope to convince it not to shed the jobs.

Following his meeting in London, Mr Salmond said he was pleased Diageo's management had agreed to supply key information to help with the business plan.

"I am not ruling out public finance if it achieves a social objective. That is the purpose of public finance. That is what it is there for," he said.

He added that the only limitation would be that it would have to "conform to certain rules".

Mr Salmond said during financially tight times the amount of cash available was "very scarce indeed" but it was there to achieve a "public purpose".

There were no details of how much money could be offered or where it would be spent, but it is understood that funds would come from the Scottish Government through Scottish Enterprise.

The First Minister also rebuffed a challenge over how state aid could be justified to a company that turned over billions each year, saying it would depend how it was channelled. He insisted that any help would not fall foul of competition laws.

Mr Salmond said he did not underestimate the difficulties faced in getting Diageo bosses to change their minds, but he added that the meeting was substantive. "Paul Walsh assured me that Diageo will give full and proper consideration to the alternative business case that is being developed," he said."

It is understood that Scottish Enterprise's draft proposal had not included working to save Port Dundas. The issue has been seized on by Labour and will be used in the by-election campaign for Glasgow North East, with its candidate, Willie Bain, warning the axing of 200 jobs in Port Dundas had to be taken as seriously as the proposed closure of the Kilmarnock plant.

Labour called for more urgency in the development of the alternative business plan.

Des Browne, Labour MP for Kilmarnock and Loudoun, who has the threatened Johnnie Walker plant in his constituency, said: "What we really need to see now is the business case from Scottish Enterprise.

"It is vital that the case is robust, but there is also extreme urgency about the need for it to be presented quickly."

FOOTBALL FANS URGED TO RALLY IN SUPPORT OF THREATENED WORKERS

DIAGEO faces a flurry of protests from workers and football fans at two key events over the next week.

First Minister Alex Salmond has urged people to support the Diageo workforce facing 900 job losses at a Keep Striding Forward rally in Kilmarnock this Sunday. And a pre-season friendly football match between Kilmarnock and Partick Thistle could also become a protest.

The Kilmarnock club's website has hosted a petition calling on the drinks giant to think again about closing the Johnnie Walker plant, which employs 700 workers.

SNP MSP Bob Doris urged fans of both teams to show their support for staff at next Wednesday's match.

He said: "The pre-season friendly is an ideal opportunity for fans to turn out in significant numbers for the match and take a united stand against Diageo's plans."

Diageo has argued that the job cuts in Kilmarnock and 200 further posts in Port Dundas would partly be offset by the creation of 400 jobs at its packaging plant in Leven, Fife.