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Comment: by Terry Murden

Who’ll blink first in new Holyrood-CBI battle?

TerryIt was a somewhat chastised head of the CBI who faced the media at the Glasgow Hilton on Friday to introduce his new leader in Scotland. Holding his hands up to making a big mistake over the organisation’s referendum campaign, John Cridland said he hoped for a “new start” in Scotland.

Some thought the director general brave to appear again in Scotland after the humiliating u-turn over the CBI’s registration with the No campaign. However, here he was, facing some of his tormentors and declaring the CBI was still relevant and ready for the next battle.

The organisation will not change its colours, though it will be interesting to see how the new director of CBI Scotland, Hugh Aitken, positions his new charge in the post-referendum era.

Mr Aitken is pro-union, and from his base in California he attempted to bring global Scots together to support the No campaign. He corresponded with No campaign leader and former Chancellor Alistair Darling, believing that the case for the union was not being conveyed strongly enough.

He will continue to argue the case, but in the knowledge that the CBI cannot afford another debacle like the last one. He spoke on Friday of its “fabulous reputation”, but because he was on the west coast of America at the time, he probably did not quite understand how much its reputation was taking a battering. That reputation still needs to be rebuilt.

Mr Cridland said the CBI would remain an important voice and influence in the Scottish economy and his call on Friday was for a period of calm and stability. This is another big challenge. Scottish politics is anything but stable, and is unlikely to become so. It is not as if there revolution in the air, but the climate is divisive and flirts with hostility. There is much at stake and no one, not least the CBI, should believe the referendum settled the independence debate. A new push is on the cards.

Opinion polls suggest the SNP will crush Labour in the General Election, though there are plenty of pollsters who doubt the SNP will get anywhere near the 40 seats suggested. A figure closer to between 18 and 20 would require it to overturn some massive Labour-controlled seats, and Ladbrokes has it at around 28.

Voters also vote differently in UK general elections when they know the battle is fought on different issues among different power bases. The Tories may have one seat in Scotland, but they control Westminster. For that reason many SNP voters switch to Labour in General Elections.

All this points to the two words that business least likes – uncertainty and instability.

Economists and investors are once again watching over the Scottish economy with a sceptical and wary eye. Membership of the SNP has almost quadrupled since the referendum and its lead in opinion polls means that it could have a significant say in Westminster – at least enough to force the new government to hold a second referendum.

It is putting new questions marks over investment in Scotland and could dampen the nascent recovery. Once again, the chatter in the powerhouses of the City is about regulation and currency.

Mr Aitken, who led Sun Microsystems and held top jobs with Microsoft and Hewlett-Packard, steps into this cauldron hoping that the CBI and the Scottish government will be – in his words – “joined at the hip”. He will be meeting Nicola Sturgeon, First Minister, at the earliest opportunity.

He is not averse to speaking his mind, once resigning from a government working group over the slow pace of progress. It will be interesting to see how his desires match those of the FM, but she has already delivered a sermon to the business community in her first speech after taking up her new role. In that address she made it clear that business will get her government’s support as long as it supports the government’s programme: living wages, gender equality, and so on. In other words, do as we say and you’ll get our backing.

Ms Sturgeon can claim with justification that many of the threats of companies pulling out of Scotland or finding it a hostile environment in which to work in have proved to be little more than scaremongering. Companies continue to invest in infrastructure and property. The country has not become a barren land.

There is also much in the government’s wish for a more equal and fairer economy that is to be admired, but there are limits, some of which business will consider a restraint on competitiveness.

Who will blink first? Ms Sturgeon or Mr Aitken. Let battle commence.

 

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