'Independence a threat to financial sector'

JACK McConnell has warned that the repercussions of the SNP coming to power would be felt more in financial services than in other sectors.

At a press conference in Edinburgh yesterday after the launch of the Financial Services Advisory Board's 2007 annual report, the First Minister said: "Independence would be bad for financial services and the Scottish economy."

The burden of a new regulatory regime and uncertainty would make Scotland a less attractive place for businesses to locate, he predicted.

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Questioned on the consequences of the balance of power shifting to the SNP's Alex Salmond, McConnell said: "Of particular concern is the SNP saying it would not hold a referendum until 2010. This would create three years of uncertainty and paralysis of the financial services industry and all others."

On the reticence of industry leaders to speak out on the possible impact of an independent Scotland, he said: "I can understand why people running successful companies don't want to get involved in politics and controversy."

During the launch of the FiSAB report, McConnell highlighted the successes achieved in the second year of its "Strategy for the Financial Services Industry in Scotland". The strategy being delivered by FiSAB - a partnership of government, the industry and trade unions - was launched in March 2005 to promote Scotland's financial services industry internationally.

McConnell said: "Improving Scotland's economic growth is our number-one priority. We are working hard to make sure Scotland's talented workforce, supported by excellent universities and ever-improving transport links, has the support it needs to keep our financial services industry at the top of its game."

The FiSAB partnership announced strong progress in its three priorities: strengthening the talent pool and business infrastructure; raising Scotland's profile as an international financial services centre; and supporting continuing industry innovation.

Amanda Harvie, Scottish Financial Enterprise's outgoing chief executive, who chaired the launch event, said: "The financial services industry in Scotland accounts directly and indirectly for one in ten jobs and has grown by 55 per cent since 2000. Creating the conditions to ensure this success continues is important not just to Scotland but to the whole of the UK."

But John Campbell, SFE chairman and FiSAB industry deputy chairman, warned of overseas threats. He said: "Scotland continues to outperform many of its rival business centres around the world as a preferred location for leading financial services companies, but global competition is fierce and we have to keep moving forward."

Campbell said increased freedom to sell across borders would challenge accepted economic models. New entrants, such as India and China, have the "hunger and ability" to lure financial services investment and jobs from Scotland. And the weakening dollar has made it more expensive to run companies from Scotland than the US.

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He added: "Focus is needed to train and attract top quality talent."


THE Financial Services Advisory Board's priorities for the next 12 months are: a new level of collaboration between Scotland's financial services industry and universities to increase the supply of work-ready graduates; promote the country's financial services educational capabilities internationally and lever Scottish academic research.

Financial services is a major economic force in Scotland.

The sector directly employs 108,000 in the country.

And it indirectly supports the employment of about 90,000 in other industries.