Amid growing fears of market reaction tomorrow to the political instability of the inconclusive election result, business leaders have been expressing fears that the paucity of Tory representation in Scotland means that a Cameron-led government’s lines of communication with Scottish business will be virtually non-existent. There are also fears that the drastic steps towards fiscal consolidation any new government would be compelled to take will become entangled in Westminster-Scotland politics.
At a post-election business meeting in Edinburgh, organised by accountancy body ACCA and the Institute of Directors (IOD), Dave Watt, the IOD’s Scottish director, said: “The Conservatives have been virtually wiped off the political landscape in Scotland, yet if they form a UK government with the Liberals than this will be very tricky for Scotland. The dialogue between business in Scotland and senior politicians is extremely important and I must admit the prospect of David Mundell [Scotland’s sole Conservative MP] as the Scottish Secretary does not fill me with confidence.”
Scottish business groups have worked effectively with the Labour Party’s Scottish heavy-hitters with direct connections to Gordon Brown, Alistair Darling, and through Jim Murphy, the Scottish Secretary. During the election campaign, Mr Darling took part in several public meetings in Scotland supported by the Chambers of Commerce.
After a shaky start during the banking crisis, Jim Murphy’s tenure as Scottish Secretary was seen as highly effective in terms of his public profile and campaigning for jobs and co-operation with business. He also established the “quadrilateral talks” between CBI Scotland, the STUC, the UK Cabinet and the Scottish Government.
A potential coalition deal between Nick Clegg and Mr Cameron raises the prospect of a Scottish LibDem MP becoming Scottish Secretary. An early favourite would be John Thurso, the MP for Caithness, Sutherland and Easter Ross. Eton-educated Lord Thurso has been the LibDem shadow secretary of state for business and sat on the Treasury Select Committee during its inquiry into the banking collapse.
As a former luxury hotelier, and president of the Tourism Society, he would likely be a popular choice among Scotland’s 20,000 tourism businesses.
Alastair Ross, the public affairs manager at corporate law firm McGrigors in Edinburgh said: “It is important that Scottish business has a direct conduit to the UK Cabinet table -- and someone who is able to represent the views. There’s a danger that the voice of business in Scotland might not be heard too loudly at Cabinet level.”
The director of CBI Scotland, Iain McMillan stressed the importance of the position of the Scottish Secretary. “It does seem to me that the majority of those calling for the post to be abolished are seeking an independent Scotland.
“As long as Scotland is part of the UK union, and this is my firm belief, then it is important that Scotland has a voice in the Cabinet, and the UK government has a voice in Scotland.”
“It’s a very important relationship and influential job. I have been able to call Jim Murphy at any time -- and it’s the same with David Mundell,” said Mr McMillan.
“If David Mundell is to be appointed Secretary of State for Scotland, and he’s the only elected member in Scotland, then this will be fine for us. I’ve found Mr Mundell to be very able and personable and he would do a very good job.
“If Nick Clegg and David Cameron do a deal and decide that someone from the Liberal Democrats would be a better Scottish representative, we would work closely with that individual the same as with Jim Murphy.”
Mr McMillan said that what was of paramount important was that a deal was made before the markets re-opened tomorrow. “They want to hear what the UK political leadership is going to do about getting our public finances sorted and our debt burden down. That has to be a priority.”
The pound was volatile on Friday after the UK General Election proved inconclusive but recovered as leaders pledged to form a government. Sterling traded 0.2% higher against the dollar at $1.4789, having hit a 13-month low of $1.4475. Many commentators are anticipating strong signals of a firmly established new governing regime today, possibly accompanied by a resignation speech from Prime Minister Gordon Brown, to head off adverse market reaction tomorrow.
