McMillan steps down with a warning shot over devolution

It blew up in April after an "innocent mistake" by an official in London led to the CBI registering itself as a campaigner against independence with the Electoral Commission, only to later rescind that move after taking legal advice.

But by that stage the damage had been done, with a host of universities, quangos and broadcasters resigning or suspending their memberships to preserve their neutrality.

Mr McMillan, who said some former members have indicated a desire to return, admits the episode was "regrettable".

He was unwilling to comment on the matter beyond the public statements made by director-general John Cridland at the time, and stressed the most important aspect of the referendum for the business community was the result.

Now the vote has taken place, he hopes the attention of politicians and business people can return to what he believes to be more pressing matters.

"I do hope that this question about Scotland's future in or out of the United Kingdom is laid to rest for many years to come," said Mr McMillan.

"One of the things that has concerned me, particularly over the past three years, is the amount of time our politicians have had to spend dealing with this issue, when in fact I would have preferred them to spend their time on making Scotland a much wealthier and fairer place.

"That has all had to be put to one side. I don't believe it has been good for Scotland. We saw what happened in Quebec - they had two referendums there [and] business poured out of Quebec and Montreal into other parts of Canada, particularly Ontario and Toronto.

"And I just hope this debate is laid to rest because I think there is a serious risk that if this does not go away we will see a contraction of business in Scotland, as some just decide to get out of here."

Asked to contemplate what a different result in the referendum would have meant, Mr McMillan expressed a personal view, stating unequivocally that the country has had a "very fortunate escape from the impact of a Yes vote". In short, he believes Scotland would not have been able to absorb the costs involved in elevating the country to full statehood.

"Currently, Scotland's deficit is 8.3 per cent of GDP (gross domestic product) - higher than the UK's and God knows the UK's is bad enough," he said.

"I think Scotland would have placed austerity plus for very many years to come."

With the political agenda post referendum focused on delivering further powers for the Scottish Parliament, Mr McMillan is convinced there will be further devolution for Scotland.

He points out new powers are already on their way thanks to the Scotland Act 2012, which devolved the proposals of the Calman Commission.

This will see stamp duty and landfill tax devolved next April, with the "10p slice of income tax being devolved to Scotland" 12 months later.

While Mr McMillan said the CBI is not opposed to further powers for Holyrood, and noted it will not campaign against it, he said there are some "red lines" that it does not wish to be crossed. "We would not like to see corporation tax devolved - that is a red line," he said.

"I think employment law and health and safety law should remain on a UK basis. That's certainly what our members tell us. And actually there is still a case, in my view, for those devolved aspects of corporate insolvency, medical professions and food standards and labelling to be re-reserved to Westminster."

Equally, Mr McMillan is keen for the main parties to quickly thrash out a deal for further powers as quickly as possible.

He believes consensus can be agreed, but only if the parties are willing to compromise.

Of course, the relationship between Holyrood and Westminster is not the only constitutional matter the CBI has had on its plate. There is also the prospect of an in-out referendum on membership of the European Union (EU), should the Conservative Party win an outright majority in the 2015 general election.

That the CBI believes ongoing membership of the EU is vital to business has been forcibly communicated, perhaps most memorably by its president, Sir Mike Rake. That came before an audience including Prime Minister David Cameron at the recent CBI Scotland dinner.

Mr McMillan said the free access to the European market, and the "approximated set of laws, rules and regulations" for companies trading across Europe, is a huge asset for CBI members.

"Business can be done seamlessly, there are no tariffs involved and that common regulation makes it much, much easier," he explained.

"If we go out of the European Union, then we would have to negotiate various treaties and provisions to enable to do business in Europe, and yet we would have to no say in future European laws and rules."

But he emphasised that not everything that comes out of Europe is good for the UK.

"The Prime Minister and his government want to renegotiate some of the treaties," he said.

"And I think all of us, whether it is in business or our daily lives, see where Europe has encroached into the national lives of member states that should have perhaps been kept at member state level and not held by the European Union."

As he looks back on his 21 years with the CBI (he joined as assistant director in 1993), Mr McMillan can recount several notable lobbying achievements.

The former career banker, who will now dedicate his time to several board appointments, cites the CBI Scotland's role in engaging politicians on improving literacy and numeracy, an on ensuring crucial infrastructure projects have gone ahead in Scotland.

These include the completion of the M74, M80 and M8 motorways, and the electrification of key rail links.

And there is more in the pipeline, with further electrification planned for the Glasgow to Edinburgh link, and work to ensure there is dual carriageway on the A9 all the way to Inverness.

Seeing off moves to give third party rights of appeal being in the planning process, and restoring parity to the business rates poundage across Scotland and England, have also been milestones to savour.

All this has played out against a changing corporate backdrop in Scotland.

Mr McMillan said the biggest change of the past 20 years has been the number of major Scottish corporations that have disappeared. These include Scottish Amicable, Scottish & Newcastle, and, in terms of being a discrete entity in its own right, the Bank of Scotland.

However he is quick to note that some thriving industries have emerged in Scotland in that time, notably fund management, food and drink and tourism.

Mr McMillan is broadly upbeat about the health of the Scottish economy, stating it is "punching its weight within the UK".

With the CBI forecasting UK economic growth of three per cent this year, he said the economy is on a growth path with the "worst of the economic downturn is well behind us".

But he accepts that consumer spending will "continue to be subdued as long as salaries and average earnings are kept down".

And with inflation still below target, he does not yet believe the time is right to increase interest rates.

Returning to his time in the corridors of power at Westminster and Holyrood, Mr McMillan insists he can't think of any politician whom he has not liked. He said party leaders have tough jobs to do and difficult decisions to make.

While he states there is no doubt the inception of the Scottish Parliament was a "political project", he believes it has played a positive role in bringing people and business closer to the political process.

And now the constitutional question has been parked, for the time being at least, he is content that it is the right time to have left the CBI.

"I've been the director of CBI Scotland for 19 years, and it is quite a long time," said Mr McMillan, who will be 64 at his next birthday.

"The referendum is now out of the way. New discussions on the constitution are going to open up amongst the political parties here in London.

"The CBI needs to press forward developing its business and economic agenda for Scotland going forward.

"Now is the time for a new person to take charge and take that work forward."