Fear, uncertainty … and the making of a myth


  By G.A.Ponsonby
Last week a report published by Ernst and Young blew apart claims by Unionists that the possibility of independence was harming Scottish investment.
The figures released by the respected accounting firm were staggering.  Scottish inward investment was at its highest in 15 years, and had risen by almost fifty per cent in the last audited year.

  By G.A.Ponsonby
Last week a report published by Ernst and Young blew apart claims by Unionists that the possibility of independence was harming Scottish investment.
The figures released by the respected accounting firm were staggering.  Scottish inward investment was at its highest in 15 years, and had risen by almost fifty per cent in the last audited year.

Far from discouraging firms from investing in Scotland, the survey suggested that the possibility of independence might actually be attracting companies.

The media reported it – in a matter of fact fashion – they couldn’t do anything else, but not surprisingly those of us who support Scottish independence were denied the satisfaction of a public humiliation of those who had perpetrated the original lie.

The survey was proof of the ‘Cry Wolf’ nature of much of what passes for ‘debate’ from the No campaign and the ease with which baseless claims from Unionists are allowed to steer the news narrative.

The word ‘uncertainty’ has underpinned much of the Better Together campaign since it launched in June 2012.  But the ‘investment’ lie didn’t start then, it was up and running months before Labour joined the Tories and the Lib Dems in their political ménage a trois.

It’s worth analysing the uncertainty myth to see how poor the coverage of the referendum debate has been and to demonstrate the willingness of some in the Scottish media to embellish and contrive.  The investment scare allows us to see how this narrative embeds itself into the public psyche and also how, with apparent ease, those who perpetrate it are allowed to carry on as if they never claimed any such thing.


In November 2011 a report from a London based economist spoke of “huge uncertainty” caused by the referendum.  Citigroup analyst Peter Atherton went further and actually warned against investing in Scotland.

In his report he urged “extreme caution” over investing in Scotland.  The report by Citigroup warned: “Renewable investors risk seeing their assets stranded in a newly independent Scotland.”

The report concluded: “Utilities and other investors should exercise extreme caution in committing further capital to Scotland.”

The report was welcomed by the SNP’s political opponents.

The then Scottish Labour leader, Iain Gray said the report showed “the SNP’s refusal to come clean about a referendum is creating uncertainty and damaging Scotland’s economy”.

He added: “We have been warning about this for months and now we see a major global bank actually advising its clients not to invest in Scotland.”

Scottish Secretary and Lib Dem MP Michael Moore said that the report pointed to a “perfect example of the referendum uncertainty”.

Atherton’s report was also widely covered in the Scottish media, in particular BBC Scotland who gave it very high profile coverage across its entire news spectrum.  On the day the Citigroup report was published, First Minister Alex Salmond, who was in Abu Dhabi and was announcing £630m of investment in the North Sea, was confronted with the report on Radio Scotland.

Few people will recall that within days of the Citigroup report appearing, two other bodies entered the debate and comprehensively rubbished Atherton’s claims.

First up was Director General of the Institute of Directors (IOD) Simon Walker who described the Citigroup warning as “alarmist”.

Mr Walker who is also the former Chief Executive of the BVCA, the organisation that represents British private equity and venture capital, claimed that Citigroup had overstated concerns.

Mr Walker insisted that the green-energy sector offered investment opportunities regardless of whether a nation was engaged in a constitutional debate or not. 

He said: “I think that’s an alarmist approach, I think if there is an independent Scotland then that will throw up opportunities as well as threats and I think it is alarmist and overstating the problems to say don’t invest in renewable or any other area because of future constitutional possibilities.”

Mr Walker’s intervention, which the Ernst and Young survey has now shown to be accurate, received nothing like the coverage enjoyed by the Citigroup report.

Nor did a statement that same day from Roy McGregor whose firm Global Energy was reported to be bringing 2000 jobs to Easter Ross through the company’s purchase of the Nigg fabrication plant.

Mr McGregor said: “Investment is happening in full knowledge of the Scottish Government’s planned referendum – and renewables are being deployed in part thanks to the First Minister, who has demonstrated the vision and ambition that investors want to see.”

There was more to come when international investment firm Altium Securities rubbished the research behind Citigroup’s claims.  The organisation, which has offices in eight different countries and experience in business deals worth billions, said that Scotland was the best placed nation in Europe to capitalise on the green-energy revolution.

The report’s author, David Cunningham, savaged Citigroup claims that an independence referendum meant that investors risked being ‘stranded’ should they invest in the Scottish green-energy sector.

Mr Cunningham said: “The energy market is resolutely agnostic towards politics.  Companies may take notice if they are operating in a country where there’s a volatile situation, but otherwise it’s immaterial if a country like Scotland is independent of the rest of the UK.”

Green Energy body Scottish Renewables released figures showing investment in Scotland’s green energy sector stood at £750m.

But the Citigroup report prevailed and the myth of uncertainty was allowed to germinate like a poisonous weed and so began the misinformation which would define the investment side of the so called ‘Great Debate’.

A report by one lone analyst received massive media coverage despite counter claims from several industry experts, some who provided proof that Atherton’s claims were groundless.

An example of just how compliant the media had become was evidenced a mere three months later when a matter of fact statement by Scottish and Southern Electricity was submitted to the Scottish government’s referendum consultation.

Cast your mind back to February 24th 2012 when an excited Douglas Fraser appeared on Reporting Scotland.  Douglas was summarising the ‘big story’ of that day, which was a statement from Scottish and Southern Electricity that apparently warned that the independence referendum could harm inward investment.

According to Mr Fraser here at last was the “clear evidence” that backed claims by pro-Union politicians that referendum uncertainty was harming investment in Scotland.

On his blog ‘Turbulent times for wind investment’ the BBC man wrote:

SSE’s warning matters to the Scottish economy and to the renewables industry.  It will likely be a signal to others.

It also matters to the political debate.  Pro-union politicians have claimed businesses will hold back on investment because of the wait for a referendum until autumn 2014, and because of uncertainties that could follow from independence negotiations.  But until now, they’ve struggled to find evidence.

…Now, the pro-union side has clear evidence of a real increase in investment risk and costs.

And it’s all the more problematic for the Scottish government to find this comes from such a large, Scottish-based company which shares ministers’ huge enthusiasm for the renewable power industry.

At the time, Newsnet Scotland ridiculed the claim, that a solitary vague statement from a single company constituted evidence of anything.  But we were a lone voice as every other news outlet echoed the views of the BBC man.

It looked like Citigroup Mark II.

But was the statement from SSE the “clear evidence” Mr Fraser and others were claiming?

One day after the shrill headlines forecasting doom appeared, renewable industry specialists Scottish Renewables posted the following on their website:

A serious blow for renewables & independence hopes – or not?

Several articles have appeared in the press regarding a statement by SSE on the possible effect of ongoing constitutional uncertainty on future investment by the company.  This is in danger of being weaponised by the Unionist side of the debate.

The SSE statement is moderate, rational and a matter of simple common sense.

The statement had been submitted to the Scotland Office, the Scottish Government and the Economy, Energy and Tourism Committee of the Scottish Parliament as part of a consultation process.

The key paragraph of the SSE submission was:

The forthcoming referendum, however, increases the risk of regulatory change and legislative change with regard to the electricity and gas industry in Scotland because it means there is additional uncertainty about the future.  This additional risk will apply up to the date of the referendum and, should the result be a vote in favour of a change in Scotland’s status, will continue until there is a binding agreement on all of the issues that could affect the electricity and gas industry in Scotland.

Scottish Renewables questioned just how much of a threat the statement represented to Scottish independence or the nation’s energy ambitions.  Not surprisingly the statement from Scottish Renewables didn’t quite command the same level of coverage as that enjoyed by the interpretation of the SSE statement.

But when Newsnet Scotland looked into the SSE statement we discovered it was not the quite the revelation it had been portrayed as by elements of the Scottish media, including Mr Fraser.

Three months earlier in November 2011, SSE’s CEO Ian Marchant had already made it clear that Scotland’s future constitutional arrangements would be taken into account in any investment decisions.

Mr Marchant had actually been responding to a little reported criticism of SSE contained in the Citigroup report when he stated that he was “very comfortable” with SSE’s asset base and that independence was “a matter for voters and SSE is not a voter”.

According to the Herald newspaper, the Chief of SSE said: “The regulatory and political picture constantly moves at EU and UK level.

“We have always had to deal with that movement and we will have to deal with that in the future and issues around constitutional arrangements will become part of that assessment at some point.

“But we have got no opinion on constitutional matters.”

So, SSE’s chief had already made it clear that constitutional arrangements would be taken into account – in other words, risk would be factored into business decisions and that regulatory changes were constantly moving.

Indeed SSE’s statement was picked up by Douglas Fraser himself who noted it in his blog ‘Tripping the Holyrood power switch’ dated 9th November 2011 [fully three months before the company would make a submission to the referendum consultation].  The BBC Scotland man also noted the intervention of Altium Securities and the IOD, albeit belatedly since Newsnet Scotland had covered the Altium story fully three days earlier and the IOD story five days earlier.

In a touch of irony, Fraser called SSE’s November 2011 intervention: “…a warning to those who would wish to draw the renewables energy industry into the political battle that’s gathering pace rapidly.”

Notwithstanding the blog, the coverage afforded Altium, IOD and the initial SSE statement by BBC Scotland was almost zero which was bizarre given the massive coverage enjoyed by Citigroup.


But what was the criticism Citigroup had made of SSE?

Back to the report from Peter Atherton which advised firms against investing in Scotland’s renewable industry claiming that the prospect of independence might adversely affect investment return.

As we have already pointed out, Atherton’s conclusions were derided by industry experts as nonsense.  One report from respected investment firm Atrium Securities described Atherton’s claims as “alarmist”.

BBC Scotland were less than eager to highlight the report from Altium Securities, probably because they didn’t fit into the narrative being cultivated.  Altium were simply repeating what the majority of firms were saying – Scotland was a good place to invest and independence would make little or no difference.

But what of SSE and the admission in the same month by their CEO that constitutional arrangements would be taken into account when making business decisions? 

“We have always had to deal with that movement and we will have to deal with that in the future and issues around constitutional arrangements will become part of that assessment at some point.”

Why not highlight it at the same time as the Citigroup report, why wait three months and then act as if the submission to the referendum consultation, which said more or less the same thing regarding risk assessment, is a surprise?

It’s here that we see a the link between Citigroup and SSE and why SSE had felt compelled to respone three months earlier.  You see as well as warning firms against investing in Scotland’s renewable industry, Citigroup also warned that SSE was overexposed to the renewables market north of the Border – hence SSE’s response to the Citigroup report.

This little known part of the Citigroup report was a nuclear bomb for Unionists claims – it was also missing from Mr Fraser’s blog.

SSE had announced two months earlier that it was pulling out of a consortium to build a new nuclear power plant at Sellafield in Cumbria to focus on … conventional and renewable generation.

In late September 2011, Alistair Phillips-Davies, generation and supply director of SSE, said: “We have made it clear from the start of our involvement in NuGen that for SSE our core investment in generation should be in renewable energy.”

Scotland’s second largest company was moving out of the Unionist favoured energy market of nuclear to invest in renewables.  A shrewd move considering yesterday’s news that taxpayers have been left with a £2.2bn bill caused by a failed nuclear plant in Sellafield.

So, weeks prior to the Citigroup report appearing, Scotland’s second biggest form had pulled out of nuclear to invest in renewables.  The referendum wasn’t harming green energy investment in Scotland, if anything the area suffering was nuclear in England and that was more to do with Fukushima than anything else.

Had the BBC flagged up SSE’s statement in November, at the time of the Citigroup report, then it risked undermining the main thrust of Atherton’s argument that Scottish renewables was a bad risk and referendum uncertainty was harming investment.  Remember also that the Citigroup report didn’t just claim uncertainty, it actively tried to discourage investment in Scottish renewables.

Over the next few months Atrium Securities and others who challenged the Citigroup report, as well as SSE’s move from nuclear to renewables, was eventually forgotten about.

When the SSE made its submission to the referendum consultation three months later, there was no mention of its abandonment of nuclear power.  Thus the ‘additional risk’ and ‘regulatory change’ statement, essentially made three months earlier in the Herald, was treated as a new.

It brought the same cross spectrum media coverage from the BBC and the predictable bogus claims from the same Unionist politicians all over again.

Michael Moore said SSE’s submission highlighted the uncertainty caused by the referendum:

“This is a crucial point from one of Scotland’s biggest businesses.  SSE’s submission adds considerable weight to the case for having the referendum sooner rather than later.”

Scottish Labour leader Johann Lamont said: “This significant intervention demonstrates the growing uncertainty the delay over the referendum is creating.”

Scottish Liberal Democrat leader Willie Rennie said: “I am sure the SNP will hysterically dismiss this intervention but that would be a mistake as SSE is a substantial company with thousands of employees.

“The message is clear, delaying the referendum could cost jobs.”

The uncertainty myth prevailed until last week when it was finally shown for what it was, a malicious lie promoted by Unionist politicians and their allies in the Scottish media.  Douglas Fraser’s claim that the submission from SSE was “clear evidence” that businesses would hold back on investment, lies in tatters.

Fraser would pop up again in April 2012 after it emerged Doosan had shelved plans for a £170 investment in Scotland’s offshore wind sector due to the economic situation in Europe.

The news allowed the ‘uncertainty’ claim to be wheeled out again by Mr Fraser who painted a less than optimistic picture of Scotland’s renewable sector – as the clip below shows.

In Feb 2011, SSE Chief Executive Ian Marchant said: “Increasing interconnection between networks is likely to be an important feature of the electricity industry in Europe as the drive to maximise supplies of secure, low carbon sources of energy increases over the next two decades.

“Scotland and Norway have rich and diverse natural resources from which to produce large amounts of electricity, and an interconnector could allow the potential of those complementary resources to be fulfilled by meeting the needs of customers across north west Europe.”

In Nov 2010 Mr Marchant, said: “Harnessing Scotland’s offshore wind resource is a once in a generation opportunity.  We can take a lead in Europe, we can build on the skills base and know-how that we already have in marine engineering and we can deliver jobs and low carbon economic investment for the long term betterment of everyone.  That is the prize and by working together across sectors we can make it happen.”

In November 2011, Ian Marchant said of carbon-capture technology: “However, if we are to be successful in reaching our carbon-reduction targets, we also need it on gas, which is why SSE is seeking to develop a larger, commercial-scale demonstration at our Peterhead gas-fired station.”

Peterhead – sadly that project died after one body refused to invest, despite promising to do just that.

The body concerned was of course the UK government.

The uncertainty myth is now dead.  However the contortions that allowed it to take hold are bewildering and, sadly, probably still being employed by elements of our media which continues to headline similar baseless scares and will do so right up until the day of the referendum.

That’s a certainty.