Osborne challenged to admit he is wrong on uncertainty claims

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  By a Newsnet reporter

The Convener of the Scottish Parliament’s influential Finance Committee, Kenneth Gibson MSP, has challenged floundering Westminster Chancellor George Osborne to admit he was wrong when he made claims last November that economic uncertainly was being caused by the independence debate.

The Chancellor repeated the assertion when interviewed by STV’s Bernard Ponsonby on the Scotland Tonight programme on Thursday of this week.  Mr Ponsonby put it to the Chancellor that such claims were scare-mongering.  Despite repeated questioning by Mr Ponsonby, the Chancellor failed to back up his claim and could not cite a single company which had cancelled plans to invest in Scotland due to the independence debate.

The Chancellor also floundered when questioned by Mr Ponsonby about an independent Scotland retaining Sterling as its currency.  Mr Ponsonby put it to Mr Osborne that the only way Scotland could not keep Sterling would be if Westminster actively sought to obstruct it.  He asked the Chancellor whether Westminster planned to do this.  The Chancellor was unable, or unwilling, to answer.

Mr Osborne chairs the Westminster Coalition committee which is overseeing the UK Government’s campaign against Scottish independence.  Prime Minister David Cameron appointed Mr Osborne to the position despite the fact that the Chancellor already has two jobs which are normally considered full-time and despite Mr Osborne having no particular expertise or experience in Scottish affairs.  As well as the vital post of Chancellor, Mr Osborne also occupies the position of chair of the Conservative party.

The Chancellor’s poor understanding of Scotland and his lack of awareness of developments north of the Border have been exposed on numerous occasions.  Since the Chancellor first made his assertion that Scotland’s economy was being damaged by the independence debate, a report by Ernst and Young has spectacularly blown his claim out of the water when it was shown that Scotland was the top performing location in the UK for Foreign Direct Investment for the second year running.  The Ernst and Young survey compared jobs created across the 12 nations and regions of the UK.

The report showed that over 6000 jobs were created in Scotland in 2011 as a result of Foreign Direct Investment, a 50% increase over the previous year, the greatest increase shown by any part of the UK.  The figures produced in the report clearly demonstrate that Scotland is the most attractive part of the UK for foreign investors.  The pace of foreign investment in Scotland has not declined since the independence referendum became a certainty after the SNP won an absolute majority in the Scottish elections of May 2011.  

To add to the pressure on the Westminster Chancellor a litany of companies and businesses have also debunked his claims by saying that independence will not affect their future investment plans. Prominent companies like Dell, Diageo, Stagecoach, and global business services giant Ceridan, amongst others, have made comments that undermine the Mr Osborne’s position.  Senior executive in all these companies have gone on the record to state that Scottish independence would not have any significant impact on their investment plans.

In March this year, Douglas Sawers, managing director of Ceridan UK said:

“…in the event that the country chooses independence we have faith in the Scottish Government’s approach to making Scotland more, not less, competitive.  If it happens, the Scottish people will have made a balanced decision and I believe that business will be supported because they are key to Scotland’s success.”

The executive director of the politically impartial business organisation The Institute of Directors also contradicted the Chancellor’s claims in June this year.  

David Watt, executive director of the Institute of Directors said he “would argue very strongly that Scotland can be independent”, and noted that even former chancellor and figurehead of the No campaign Alistair Darling had admitted that Scotland could survive as an independent country.  

Mr Watt said:

“Business will respond whatever way the voters decide. Business will cope, survive and ultimately thrive whatever the constitutional format is, but we have to decide which is the best one.”

He added:

“I personally believe that Scotland is a place to invest in both now and for the future. It’s a great place, it’s got great people, it’s got a great future whatever the constitutional format.”

Just one day after Mr Osborne repeated his claim during his interview with STV, his credibility took a further blow when the prominent and successful businessman and job creator Jim McColl came out in support of independence for Scotland.  Mr McColl said he now believed that the constraints placed upon the creation of growth by UK economic policies can only be overcome with independence.

Commenting Kenneth Gibson said:

“George Osborne’s disastrous interview on STV’s Scotland Tonight left him unable to name one chief executive who has said they will withdraw investment in Scotland due independence will have had Tories squirming. His spurious claims of last November have as much credibility left as his competence as Chancellor.

“Scotland is, for the second year in a row, the most attractive place anywhere in the UK for inward investment with international firms locating here in full knowledge of the Scottish Government’s referendum plans. And a list of high profile companies have debunked his claims.

“Then on Friday morning job-destroyer Osborne’s negative outlook was discredited further as news was circulated about Jim McColl, job-creator and one of Scotland’s most successful entrepreneurs, backing for a Yes vote at the independence referendum in 2014.

“This shows George Osborne’s claim was wrong and he should now admit it.

“Scotland is rich in resources but urgently needs responsibility for the key economic levers required to boost economic recovery and create jobs, and many of the leading job-creators in Scotland agree with us on that.

“In 2014, the people of Scotland will have the chance to seize the biggest opportunity in 300 years and ensure that decisions about Scotland’s future are in Scotland’s hands and not left to failing Westminster politicians like George Osborne.

“It is only this path which can make the country we live in a more prosperous and equal nation.”