Letter: Bad for business

This is extremely bad news for the Scottish economy and a serious blow to the capital city.

The flawed way of dealing with difficulties in the property development market following the collapse of the UK banking sector shows that the rescue plans brought forward by the previous Labour government are totally unfit to deal with the problem that other sectors of the economy confronted at the same time as the financial services sector faced meltdown.

To rescue all the major banks and to create a scheme giving them relief from liquidating what were viewed as "toxic assets" meant no protection was afforded to the development industry and no long-term strategic view was taken to protect the wider interests of the Scottish economy.

The three development companies I have mentioned were all recognised for their skill and leave behind a legacy of some exceptional infrastructure. They have been punished for persuading the banking sector to support project funding at the top of the market, whilst those persuaded get taken into public ownership.

I am seriously concerned at the consequences of what appear to me to be rash and hasty decisions. The City of Edinburgh Council's administration is now actively pursuing other banking models promoted in the Scandinavian countries, which are much more focused on long-term investment with wider regeneration opportunities.

This country and her capital city cannot afford to wait until major financial institutions become less risk averse and re-enter the development market. I would encourage the Westminster and Scottish governments to do what they can to kick-start development activity.This is not just a problem that needs resolution for the "here and now". It is our future we must protect.

(CLLR) TOM BUCHANAN

Economic development convener

City of Edinburgh Council