Jim McColl: Scots firms face '˜uneven playing field' in Europe

Jim McColl says Scottish firms face an "uneven playing field" against European competitors

Jim McColl says other EU nations back their firms through national investment banks - and fears that current plans for a Scottish equivalent may be "half-cooked."

Scotland currently has the poorest economic growth among major developed countries, new figures at the weekend suggested and MSPs are conducting an inquiry into the country's economic performance.

And Mr McColl, who owns the Ferguson Shipyard in Port Glasgow and sits on Nicola Sturgeon's Council of Economic Advisers, warned firms need more support to compete internationally as he appeared before MSPs on Holyrood's economy committee.


The entrepreneur said one of his pump companies made a bid to carry out work at the 2008 London Olympics on the city's sewer system.


"It hadn't been replaced since Victorian times," he said.


"Weir Pumps was the company in Glasgow which supplied the original equipment so we bid for that contract and we were very close in price.


"But it was awarded to a German company. And it was awarded because the German company had more financial support, again from KFW their national bank."


"Can you imagine the Olympics Games being held in Frankfurt and the Germans giving the contract for the infrastructure to a British company?"


KFW is Germany's national investment bank and offers billions of pounds in support to the country's firms to bid for work through cash and guarantees. But it raises finance through bonds on the financial markets, meaning it is not classed as EU state aid. So although its operations are sanctioned and guaranteed by the German Government, it is not classed as "state aid" which can block private firms from securing lucrative contracts.


"I don't have the support to put in place the guarantees that the Germans and the Poles and every other European country has."

The entrepreneur, one of Scotland's richest men, told MSPs that the national investment bank in Finland, with a population of 5.5 million, has given its firms three times as much support as the UK.


He added: "I know we're looking, through the Government here, at a National Investment Bank. My worry is that we kind of half-cook it and don't do the proper support which gets round claims from Europe on state aid.


"Every other country in Europe has a national investment bank - it's set up to get around state aid. They also can raise their own finance off the Government's balance sheet, on the bank's balance sheet. They can raise bonds to support small companies."

Mr McColl said that a similar set-up here would be added to the "national debt" because of the way stricter UK accounting rules operate and warned the new Scottish model must avoid this.