Scottish independence ‘brings foreign investment’

North Sea oil has seen continued investment from international companies. Picture: comp
North Sea oil has seen continued investment from international companies. Picture: comp
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INTERNATIONAL firms are being attracted to invest in Scotland by the prospect of independence, a major new survey has indicated.

Foreign investments in Scotland reached a 15-year high last year with a total of 76 major projects secured in 2012. This was up by almost 50 per cent on the previous year. There is “no sign of investors being deterred from coming to Scotland” over the possibility of Scotland leaving the UK, according to the survey by professional services firm Ernst & Young. It stated: “If anything, the reverse appears to be true”.

The result was seized on by finance secretary John Swinney who said it undermines claims by pro-Union campaigners that big businesses would be wary of operating in Scotland if it leaves the UK.

Last night, the coalition government insisted that the results underline Scotland’s strength as part of the UK. Ernst & Young’s annual “attractiveness” survey looks at the appeal offered by different parts of the UK to foreign investors.

It found that the number of direct foreign investments across the UK increased 3 per cent between 2011 and 2012.

London is still the “clear leader” among the UK regions in securing foreign investment, but Scotland attracted the next largest number last year, as it did in 2010. Among the high profile multi-nationals to announce major investment in Scotland were pharmaceuticals firm GlaxoSmithKline, Middle East oil and gas company Taqa and software giant Avaloq.

The report said: “The resulting strong performance signals two main messages for Scotland.

“The first is that the possibility of independence and its potential knock-on impacts on areas such as corporate taxation appear to be having little effect on FDI (foreign direct investment) decisions.

“There’s certainly no sign of investors being deterred from coming to Scotland, if anything, the reverse appears to be true.

“The second is that Scotland is increasingly outperforming most of the English regions in the race for FDI.”

While the number of overseas projects coming to Scotland rose, “in contrast, most of the English regions outside London saw their project numbers decline”.

Mr Swinney said the report demonstrates that Scotland has “strong foundations”.

He said: “There can be no doubt that Scotland has the potential to be a successful independent nation. Scotland’s success at securing inward investment is clear.

“Scotland is ranked number one for inward investment projects outside London, up from number two last year, and we have maintained our consistent place as one of the top performers when it comes to attracting employment.”

Kenneth Gibson MSP, convener of the Scottish Parliament’s finance committee, said: “The clear evidence entirely scotches the No campaign’s scaremongering. As Scotland’s continued and remarkable success in the field of inward investment demonstrates, the people of Scotland can’t believe a word the No campaign says.”

But a spokesman for the Scotland Office said the country’s place in the UK is one of the “key conditions” for success in attracting investment.

“Investors look at the wider picture and this report shows the stability and opportunity offered by Scotland, with a single market and regulatory regime and using Sterling as part of the UK, is an attractive option for foreign companies,” he said.

Although the number of foreign investments in Scotland increased, the figures suggest that the number of jobs associated with these actually fell. A total of 4,867 jobs were created, 18 per cent lower than in 2011.

But the total for last year is still the second highest ever.

The total number of jobs created is not recorded for every foreign investment project so the decrease last year may be “a reflection of patchy reporting by projects rather than any underlying trend”, Ernst & Young pointed out.

Jim Bishop, an Ernst & Young senior partner in Scotland, said the figures “demonstrate Scotland continues to punch above its weight in an increasingly competitive global market”.

But he warned: “Scotland cannot rest on its laurels. We are still more reliant on the US as a long-standing lead investor than the rest of the UK, but lagging behind in investments from growing economies such as India and China. The country is performing well, but there’s always room for improvement.”

Anne MacColl, chief executive of Scottish Development International, insisted the organisation, which aims to encourage inward investment, was “far from complacent”.

GlaxoSmithKline last year announced its decision to invest more than £100 million and create 100 new jobs across its two Scottish operations in Irvine and Montrose.

Abu Dhabi-based oil and gas giant TAQA revealed in November it had agreed to buy assets in the North Sea belonging to BP for $1 billion, while oil and gas services firm FMC Technologues opened a new base in North Lanarkshire in May with the creation of 170 jobs and took on 70 further staff in Dunfermline.

Norwegian oil and gas firm Aker Solutions announced plans in May to create 500 jobs in the north east of Scotland over the next two years.

Swiss computing firm Avaloq Innovation opened a new software development centre in Edinburgh in February creating 500 jobs in the capital.

The Dell Corporation’s global president, Steve Felice, also indicated in March last year that the outcome of the independence referendum would not change the firm’s commitment to Scotland, just months after it announced plans to boost its Glasgow workforce to almost 1000.

Other international firms like Amazon, Hewlett-Packard and State Street have all announced major investment in Scotland in previous years.

A spokesman for the pro-Union Better Together campaign said: “It is great that the SNP campaign has finally seen the light and now realise that Scotland benefits enormously from being in the United Kingdom.

“The only people who want to put all of our success at risk are the separatists.”


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