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Tycoon urges change of policy

McColl warns against ‘half-cooked’ national investment bank

Jim McColl

Jim McColl: addressing inquiry

Scottish business leader Jim McColl today warned against setting up a national investment bank which was “half-cooked”.

The engineering tycoon told MSPs Scotland needed an investment bank that avoided the restrictions of EU state aid rules and was able to raise funds on international markets.

“My worry is we half cook it,” said Mr McColl, asked to comment on the government’s plans for such a bank. He said support for SMEs should form part of the role of the bank.

He raised the prospect of launching his own lender and said he planned to apply for a banking licence in March after pulling together a consortium to support small businesses with loans of up to £5 million.

Mr McColl, who owns Clyde Blowers and Ferguson Shipbuilders, also told the Scottish Parliament’s Economy Jobs and Fair Work Committee that while it was encouraging to see more entrepreneurs emerging, many are “driven by the lack of opportunities for high quality jobs”.

He said Scotland needs to create higher quality jobs. While unemployment is low it is creating lots of low cost jobs, he said.

On productivity, he said that rather than link it with research and development, the three big drivers of productivity are ‘happiness, security and fair pay’.

“If people have those three things productivity will shoot up,” he said, adding that he had seen it in his own businesses.

Mr McColl called for greater flexibility in business advice to support SMEs, stating that many of those seeking support were being told they did not fit the criteria.

Responding to questions about why so many small firms are sold to overseas businesses, he regretted the lack of big companies in Scotland with the ability to buy smaller growth firms and take them to the next stage.

On Scotland’s low growth, he said no one should underestimate the impact of the banking crash on support for the Scottish economy. He said that support “has gone”.

“Unless we find something to fill that gap we will continue to see low growth in Scotland,” he said, adding that “more efficient” support was needed.

The committee also took evidence from Jackie Brierton, vice-chairman of Women’s Enterprise Scotland and enterprise co-ordinator at GrowBiz who said the Business Gateway programme is ‘no longer fit for purpose’.

She said it was “transactional and minimal” and missed out on a lot of potential. Small firms in rural areas can find it difficult to access support, she said.

“From a rural perspective at the self-employment and micro-business level the only source of support in most areas is Business Gateway and Business Gateway is very centralised, so they very rarely provide outreach support or go to where people need.

“But probably more importantly they don’t really value I think most self-employed occupations, so they dismiss businesses too readily.

“We have many clients coming to us at GrowBiz saying that they have been to Business Gateway and have been told that basically they are not worthy of support, which I think is appalling.

“It’s not necessarily the Business Gateway operator’s fault that that is happening. The contract is I think not fit for purpose in 2018.”

Asked about Scotland creating a “cluttered landscape” of support, Sandy Kennedy, chief executive at Entrepreneurial Scotland, questioned the degree of focus on the public sector to provide such support.

Mr McColl agreed that the provision was too cluttered and said he did not want to see the national investment bank managed by civil servants.

Suzanne Mawson, lecturer, management work and organisation, University of Stirling, also addressed the committee.

They faced questions on how the economy has performed under 10 years of SNP government, with a particular focus on levels of entrepreneurship and business growth.


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