Wings Over Scotland

The Scottish media this week has worked itself into an apoplectic rage over Alex Salmond acting (or rather, merely being prepared to act) in defence of thousands of Scottish jobs. It’s been an odd phenomenon to witness, but doubly so given that last week everyone was furious with him over some jobs that were lost.

Despite the fact that unemployment in Scotland (at 8.1%) is again lower than in the UK (8.3%), the situation remains extremely fragile and any government could expect severe criticism if it failed to do everything in its power to protect and create jobs. Yet Alex Salmond appears, on the evidence of the last few days, to be damned by the Scottish media if he does and damned if he doesn’t.

The taxpayer-funded BBC has a far more powerful influence in Scotland than News International, and is frequently portrayed by nationalists as the Union’s propaganda vehicle of choice. The allegations can sometimes be difficult to dispute however objective one would wish to be, and the BBC’s coverage of the Doosan furore last week was an instructive case.

The key to all corporate investment is confidence. Investors and global companies looking to invest in Scotland need to feel confident that they’re placing their capital investment in the right place, and the Scottish Government has worked tirelessly to create investor confidence for Scotland – particularly within the renewables sector, in the face of a barrage of scepticism from the opposition.

From the perspective of a major global company, share price is everything. CEOs eat, sleep and breathe their company share price. They obsess over it. And understandably, because it isn’t just desirable for a CEO to ensure the share price performs well, it’s actually their legal duty. So, for a company like Doosan (or any other company), proceeding or not proceeding with a major investment can and often does affect the share price adversely.

It’s no surprise, then, that any such company withdrawing (even temporarily) from a major investment would wish to minimise any media outcry about such a decision. All companies work in the same way – when Apple, say, is launching a new iPhone, there’s a blaze of publicity worldwide, but if the launch is delayed, then the news is released quietly, with as little media engagement as possible. Major companies pathologically fear adverse publicity, or too many questions over their investment choices. They do it to protect their share price, because the law obliges them to.

The role of governments (in this case, the Scottish Government) in such circumstances is delicate. Doosan haven’t cancelled their investment in Scotland, merely postponed it. If and when this project, or a similar one, does happen it’ll bring many jobs to Scotland – both directly, and indirectly to small Scottish engineering and support companies in the supply chain. In the current global economic climate, such investment is like gold dust.

In that light, it’s difficult to rationally criticise the Scottish Government for not running immediately to a TV studio to tell the world the bad news. There was no active suppression of the story – as has been noted, the information was freely available in the public domain long before the BBC “discovered” it – but the Scottish Government’s responsibility is to ensure the investment will eventually come, and as such the last thing they want to do is either upset or damage the company by undermining the market’s confidence in it.

It did, in other words, merely what any responsible government would do in the same circumstances. But the actions of the opposition and the BBC – barely able to conceal their giddy delight at the loss of Scottish jobs as a potential stick with which to beat the SNP – directly risked damaging Doosan and therefore the prospect of future investment in Scotland. It’s hard to avoid the conclusion, therefore, that they would regard such damage as a price worth paying to help prevent Scottish independence.

(Indeed, a prominent Labour activist was to be found on Twitter yesterday openly stating that in Salmond’s shoes he would have refused to “kowtow” to Murdoch even if it meant sacrificing thousands of Scottish jobs.)

The Scottish Government must constantly walk a tightrope to preserve investor confidence and try to protect Scottish employment – the Finance Secretary was last week in Asia, Doosan’s home continent, trying to further strengthen Scottish exports to that region and develop plans for investment in Scotland. The opposition, meanwhile, was weeping crocodile tears at lost Scottish jobs and rejoicing in the chance to attack the SNP, with the national broadcaster’s enthusiastic connivance. Scotland needs either body like the Titanic needed an iceberg.