The Scottish Government is developing bad habits when it comes to direct interventions in the Scottish economy.
You get the impression that not enough people in the current Administration are old enough to remember the appalling record of the UK Labour Government’s interventions in the 1970s. Propping up companies which make goods the market either doesn’t want ( fancy an Austin Allegro ? ) or which can be bought cheaper elsewhere is not a good use of the money extracted from us via taxation.
The list of Scottish lemons is growing with a number of candidates jostling for the prize of biggest hit on the taxpayer’s wallet.
Prestwick Airport, located in a place few need to fly to or from and with another airport much closer to the City it serves - £38 million in loans as at March 2018. The March 2019 accounts which will no doubt be issued as late as possible will inevitably show debt has swollen to over £40 million.
Ferguson Marine, shipyard in Port Glasgow, trying to build two crazily complex ferries for Calmac and clearly struggling to do so at the price it bid - financial support from the taxpayer of at least £45 million.
BiFab, based in Fife , is battling (quite possibly against unfair foreign competition) to make structures for the offshore Oil and Renewables Industry - now supported by the Scottish Government to the tune of at least £35 million.
These are just examples , they are not the full list. The guarantee issued by the Scottish Government to support the rescue of the Lochaber smelter could dwarf all of these three on its own in terms of cost to the taxpayer , if it is called up. The Scottish Government is far too willing to spend our money .
The funds being used here could have been used more productively elsewhere. How much rural broadband would this have paid for? Or apprenticeships? Or support for start-up companies? Or a faster upgrading of the vital A9 road?
The money spent on each of these three companies could broadly have paid for a nurse or teacher for 1,000 years.
Wasting money like this is significant loss for a small economy such as Scotland’s , not just the direct cost to you and me as taxpayers but the opportunity cost of where it could have been used to better effect for our country. We should hold the Scottish Government to account for its failings.
Along with this financial irresponsibility , the Scottish Government does itself no favours in terms of public trust by how it goes about its direct interventions.
At Prestwick Airport the Scottish Government pretends it is all up to the directors who have a viable plan which has been validated by external advisers. All rubbish, the person who supplies the money holds the power, the plan is pie in the sky and the external advisers checked it added up rather than said it was a good plan. Now the airport is to be sold and, you could almost laugh if it wasn’t so sad, the Scottish Government is trying to spin it as a success - we all know that is not true.
Ferguson Marine. Connected to the non-UK tax resident Jim McColl, a former independence supporter. The fact that £45 million of support had been provided to cover the Calmac ferry fiasco had to be dragged out of the Scottish Government by the Auditor General and individual MSPs. The Government claim that £30 million of the money was to enable the yard to diversify stretches credibility.
Money wasting and fibbing. Two habits a Scottish Government which so desperately wants to show it can govern without adult supervision must give up.
Pinstripe is a senior member of Scotland's financial services community.
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