:00:15. > :00:19.Business hates uncertainty and constitutional upheaval. Right?
:00:19. > :00:23.Wrong. Look at this lot - just some of the foreign companies which have
:00:23. > :00:29.invested in Scotland in recent years. They don't seem to care
:00:29. > :00:32.whether we'll be independent or not. And I'll be speaking to the woman
:00:32. > :00:39.who leads the organisation that's brought them here. What's the secret
:00:39. > :00:42.of her success? Good evening. This wasn't supposed to happen, was it?
:00:42. > :00:45.But Scotland is proving to be an extremely attractive destination for
:00:45. > :00:48.foreign investors, even though we could be independent in a few years'
:00:48. > :00:51.time. Today's report from Ernst & Young says that prospect isn't
:00:51. > :00:53.deterring investors. If anything, the reverse appears to be true. On
:00:54. > :01:02.the other hand, maybe it's proof that devolution is working? Andrew
:01:02. > :01:07.Black reports. For the last 30 years, this global engineering
:01:07. > :01:12.company has been making equipment for the off shore industry from this
:01:12. > :01:16.base in Aberdeen. Half of what it makes is sold to foreign countries.
:01:16. > :01:22.It reckons having an operation in Scotland gives is a competitive
:01:22. > :01:28.edge. We now have nearly 3,000 people in the Aberdeen area alone
:01:28. > :01:32.and that scope and that breadth allows us to tap into a pool of
:01:32. > :01:38.engineering talent. That talent is resourceful and knowledgeable and
:01:38. > :01:43.has all the experience of 30 years of working in this industry. When it
:01:44. > :01:50.comes to Scotland attracting investment, a new report said the
:01:50. > :01:57.nation is punching above its weight. The number of projects involving
:01:57. > :02:01.direct foreign investment rose by almost half. And it compared to a 3%
:02:02. > :02:06.rise in projects coming into the UK as a whole. So what is behind it?
:02:06. > :02:12.The international competition for that investment is increasing
:02:12. > :02:18.significantly, even as we speak. Therefore, it is important that
:02:18. > :02:24.Scotland maintains its readiness and its energy around attracting that
:02:24. > :02:32.investment. Amazon, Del and glabgs are all -- GlaxoSmithKline are all
:02:32. > :02:39.companies that have committed to Scotland. Proof say the SNP that
:02:39. > :02:46.firms would be put off is scaremongering. It highlights the
:02:46. > :02:52.number of projects is at a 15-year high. That shows investor confidence
:02:52. > :02:54.and that some of the scare er we heard about the independence debate
:02:54. > :03:00.undermining investment is not the case and the reverse is true. So
:03:00. > :03:04.what this report indicates is that Scotland remains a very strong and
:03:04. > :03:09.positive destination for investment and the evidence speaks for itself.
:03:09. > :03:14.What we are seeing is a big vote of confidence for Scotland within the
:03:14. > :03:18.United Kingdom. A commitment to the UK's regulatory environment, support
:03:18. > :03:22.for the UK's low tax environment and a determination that we will
:03:22. > :03:25.continue to use all the international offices we have to
:03:25. > :03:33.promote Scottish business. That is good news for everyone. But both men
:03:33. > :03:39.will be aware of the challenges which the report points to. For
:03:39. > :03:44.every �100 invested in Scotland, 42 comes from America. For the UK it is
:03:44. > :03:50.39. But look at who we aren't attracting. Indian companies account
:03:50. > :03:57.for less than 3% of investment, but for the UK as a whole it is more
:03:57. > :04:03.than 5%. China accounts for about 3% of inward investment, but Chinese
:04:03. > :04:12.investment in Scotland so Is low it -- is so low it didn't register in
:04:12. > :04:18.the survey. These are high quality jobs. We are not getting the low
:04:18. > :04:25.grade call centre investment. Peopled that complaints about that.
:04:25. > :04:32.The a lot of the investment is hi-tech and FMC technology and a lot
:04:32. > :04:37.of the investment in the North East of Scotland that is the oil related.
:04:38. > :04:44.So perhaps it is a more sophisticated, more skilled form of
:04:44. > :04:48.investment. And of course these inward investments create indirectly
:04:48. > :04:52.jobs for companies who service the new companies coming in one way or
:04:52. > :04:56.the other. This report measures attractiveness and there is no doubt
:04:57. > :05:02.that foreign companies do see Scotland as an attractive place to
:05:02. > :05:05.come, regardless of the debate raging over Scotland's future.
:05:05. > :05:09.Andrew Black reporting there. We'll get to the heated political debate
:05:09. > :05:15.in a moment. But first I'm now joined here in the studio by Anne
:05:15. > :05:19.MacColl, the Chief Executive of Scottish Development International.
:05:19. > :05:25.So what is the secret of Scotland's success, you have been working hard
:05:25. > :05:30.to get these figures up to a 15-year high? Yes we have. There is a couple
:05:30. > :05:34.of thins that stand out as being the things that are the most important
:05:34. > :05:39.things for Scotland being successful. The first is the quality
:05:39. > :05:45.and the nature of the integrated support that the public services
:05:45. > :05:51.wrap around inward investors. If I give you some figures. 76 projects
:05:51. > :05:55.that we attracted into Scotland last year, almost half of them came from
:05:55. > :06:00.inward investors who already have a base in Scotland. That Thames us
:06:00. > :06:03.something about the support we have. They're coming to Scotland and
:06:04. > :06:08.developing their operations here and the third thing that stands out is
:06:08. > :06:11.the quality of the workforce in Scotland. We have world class
:06:11. > :06:16.universities and research institutions and many of our skilled
:06:16. > :06:22.workforce come from those universities. And quality of life
:06:22. > :06:30.has been cited as part of that? so if you look at companies from the
:06:30. > :06:34.US who is set up a new operation in Inverness, 126 high quality new jobs
:06:34. > :06:38.and are attracting fantastic high skilled people into that part of
:06:38. > :06:42.Scotland. That is great news for the Highlands and Islands as well.
:06:42. > :06:46.figures for Scotland are in contrast to the English regions which have
:06:46. > :06:53.done badly. Wales and Northern Ireland also compare well with us
:06:53. > :06:59.too and is that the devolution dividend do you think? They can
:06:59. > :07:03.attract foreign investors? It is about the quality of what it is we
:07:03. > :07:09.provide in terms of support. I think the joined up nature of what we
:07:09. > :07:19.provide as well is important. So if I look at Highlands and Islands
:07:19. > :07:23.enterprise, Scottish Enterprise, it is an integral part of it. But we
:07:23. > :07:27.have 30 overseas offices with people out there who are close to global
:07:27. > :07:31.investors and to corporate HQs, so we are getting the different
:07:31. > :07:35.business angles that these investors need and they need us to understand
:07:35. > :07:41.where their business is going and I think we can do that by looking at
:07:41. > :07:44.it from Scotland and the overseas angle. As you work to attract
:07:44. > :07:49.investors, you're having to compete with London and the south-east of
:07:49. > :07:54.England, as the English regions have to do. One Sunday newspaper had a
:07:54. > :08:02.stark headline how London is bleeding Scotland dry. How can you
:08:02. > :08:05.compete with London and on those terms? I think we are clear where
:08:05. > :08:12.our competitive propositions are on a sector by sector basis. We know
:08:12. > :08:15.that we are strong in energy. Both renewable energy and oil and gas. We
:08:15. > :08:20.know that we are strong in life sciences. We know that we are strong
:08:20. > :08:24.in business services. What I see is that projects who come to Scotland
:08:24. > :08:33.rather than London look at Scotland as having fantastic quality
:08:33. > :08:37.workforce, very low attrition rates, good quality of life and that makes
:08:37. > :08:42.for an interesting financial and stable business package for these
:08:42. > :08:46.companies. You mentioned the overseas offices, as you speak to
:08:46. > :08:52.investors, does the independence referendum come in in these
:08:53. > :08:58.discussion and do you get asked about it and have to reassure people
:08:58. > :09:05.about it? What happens is our people out there, many of whom are locally
:09:05. > :09:08.hired in areas such as India, such China, they are there to know and
:09:08. > :09:13.understand what the global headquarters of our offices are
:09:13. > :09:17.looking for in Scotland. And what we see is the interest in those inward
:09:17. > :09:23.investors into the business environment that Scotland has to
:09:23. > :09:27.offer. It is, it is beyond... You know anything other than referendum
:09:27. > :09:32.questions. What we are looking at is the economic benefits of investing
:09:32. > :09:38.in Scotland. So they see a stable business environment, they see a
:09:38. > :09:42.clear strategy for developing inward investment and we see, they see
:09:42. > :09:46.Scotland, a small country, but with some attractive propositions that
:09:47. > :09:51.can and does compete in a confident way on the world stage. That is
:09:51. > :09:58.important, that confident message is important. For them, politics
:09:58. > :10:01.doesn't come into it? Well we see that the Ernst & Young survey
:10:01. > :10:05.demonstrated why companies continue to come to Scotland and that is
:10:06. > :10:09.about the quality of the support that we provide and the skilled
:10:09. > :10:13.workforce and the follow on investment that comes from the
:10:13. > :10:18.number of investors who continue to invest and to develop their
:10:18. > :10:22.operations in Scotland. It speaks for itself. Where can we do better,
:10:22. > :10:27.perhaps a lack of investment in China, India, Russia and interesting
:10:27. > :10:32.that China doesn't invest, when you think of the links that have been
:10:32. > :10:37.going between Scotland and China in the past couple of years? The limps
:10:37. > :10:42.go -- links go from strength to strength. We are strengthening our
:10:42. > :10:48.team there and we have opened a new office in southern China and we have
:10:48. > :10:52.across Asia a 25% increase in the number of people working for
:10:52. > :10:56.Scottish development international and the agencies here. With the
:10:56. > :11:01.other side of investment is trade and we have seen the number of
:11:01. > :11:06.Scottish companies trading out to China growing and those, that
:11:06. > :11:10.increase in exports has been to almost 9% by the end of last year.
:11:10. > :11:13.So the trade and the investment, we are continuing to reinforce our
:11:13. > :11:23.efforts into China and I think we will see some good results over the
:11:23. > :11:28.
:11:28. > :11:31.next few years. Thank you. In a moment we'll be joined here in
:11:31. > :11:34.the studio by Scottish Labour's finance spokesman, Ken Macintosh.
:11:34. > :11:38.In our Edinburgh studio is the convener of the Finance Committee at
:11:38. > :11:42.Holyrood, SNP MSP Kenneth Gibson. Good evening. It's very positive
:11:42. > :11:45.news for Scotland, the referendum may not hinder investment, but
:11:45. > :11:49.perhaps being part of the UK is actually helping investment too?
:11:49. > :11:54.Well, I think it's an absolutely outstanding report. What it talks
:11:54. > :11:57.about is Scotland's sparkling performance, it's robust
:11:57. > :12:02.performance. It talks about the fact that Scotland is doing well right
:12:02. > :12:05.across the board. In many sectors, manufacturing, investment, we are
:12:05. > :12:09.attracting twice the proportion the rest of the UK is. We are doing
:12:09. > :12:14.exceptionally well. The document points out the fact that the
:12:14. > :12:18.scaremongering campaign of the Better Together, the "no" campaign
:12:18. > :12:22.is having no effect. The report makes clear, if anything, the
:12:22. > :12:26.independence referendum is actually helping to focus people on Scotland
:12:26. > :12:30.and, therefore, make it more likely to be a place were people want to
:12:31. > :12:35.think about investing. Do you think you are out of the woods yet though?
:12:35. > :12:40.Jim Bishop from Ernst & Young says the referendum hasn't acted as a
:12:40. > :12:46.barrier to investment so far, that may change as the discussion
:12:46. > :12:49.intensifies? The Government is called No Room For Placent Sid,
:12:49. > :12:54.no-one is placent. We see no evidence what so ever so far that
:12:54. > :12:59.the referendum will have any adverse effect on inward investment in
:12:59. > :13:07.Scotland. The document says quite the reverse. If we think about what
:13:07. > :13:14.the Prime Minister and Alastair Darling and what the Labour Party in
:13:14. > :13:17.Holyrood have been saying. Macintosh you are with me in the
:13:17. > :13:23.studio. Thank you for joining us. Looking at the report, unusual words
:13:23. > :13:27.for accountants it talks about a "sparkling performance" for
:13:27. > :13:32.Scotland. It says the possibility of independence seems to have little
:13:32. > :13:37.effect on decisions. If anything, the reverse appears to be true. So,
:13:37. > :13:42.Labour's warnings are not justified? It's great news, isn't it? Great
:13:42. > :13:47.news for Scotland the economy is doing well we are attracting inward
:13:47. > :13:52.investment. Scotland has always had a pretty good record. It would
:13:52. > :13:56.appear under devolution our record is getting better. It's a great
:13:56. > :14:00.testimony to devolution. Great news that uncertainty of the referendum
:14:00. > :14:05.is not putting people off. That is good news. We don't want people to
:14:05. > :14:09.be put off. Consistently you have said that constitutional change and
:14:09. > :14:13.uncertainty caused by that would put people off investing in Scotland. An
:14:13. > :14:18.argument that turns out to be completely untrue when you look at
:14:18. > :14:22.the figures in this document. very... There is no doubt there is a
:14:22. > :14:25.question mark over Scotland's future. We don't know, it has an
:14:25. > :14:28.uncertain future until the referendum is out of the way. What
:14:28. > :14:33.we don't know is, for example, would the figures have been even better
:14:33. > :14:40.without the referendum? The second conclusion the report makes is that
:14:40. > :14:44.it points to the fact that all the devolve devolved region, all those
:14:44. > :14:49.parts of Britain with devolved parliament's have done well, not
:14:49. > :14:54.just Scotland, Northern Ireland and Wales. That speaks a world for the
:14:54. > :14:58.powers of devolution. Don't admit to scaremongering then? Absolutely not.
:14:58. > :15:01.I want... I have always wanted Scotland to do well under any
:15:01. > :15:05.circumstances. Kenny Gibson always thinks, like the Scottish
:15:05. > :15:08.Government, to fall flat on it is face. Far from it, I want it to be
:15:08. > :15:12.successful as possible. I want devolution to be a success. I want
:15:12. > :15:18.this country to be a success. I don't think the referendum would be
:15:18. > :15:23.beneficial to us. I point out to Kenny what has happened is that
:15:23. > :15:28.Scotland have prosper prospered as being part of the UK. People come
:15:28. > :15:32.here because we are part of the UK, part of this huge market and part of
:15:32. > :15:38.Europe. Do you make of his point, it could have been even better if
:15:38. > :15:42.wasn't for the referendum? The UK offers one currency, regulatory
:15:42. > :15:46.framework and so on, lots of stability. Could things be even
:15:46. > :15:53.better, do you think? I mean Ken is talking nonsense there, he knows it.
:15:53. > :15:55.The UK had a 3% increase increase inward investment, we had 49%
:15:55. > :15:59.increase in Scotland. That will be difficult to beat. What is important
:16:00. > :16:04.is that the report make it is clear whether Scotland is or isn't
:16:04. > :16:09.independent there are strong foundations to build on. We think a
:16:09. > :16:15.Scottish economy, Tynely tuned would do better on the world stage. If we
:16:15. > :16:20.can do well with devolution we could do well with decisions made in
:16:20. > :16:22.Scotland than decisions made in London. Why? There is not
:16:22. > :16:25.uncertainty because of the referendum. If there is
:16:25. > :16:30.independence, that we wouldn't, perhaps, know about the currency, we
:16:30. > :16:35.wouldn't perhaps have this single market, we wouldn't have embassies
:16:35. > :16:40.abroad perhaps it would be worse under independence? Clearly we will
:16:40. > :16:44.embassies abroad and we will have a currency which will be sterling. I
:16:44. > :16:48.don't think anyone investing in Scotland who make long term
:16:48. > :16:51.decisions are taken in by these stories from the "no" campaign. They
:16:51. > :16:55.make decisions that will last for many years. If they thought
:16:55. > :16:58.independence would be the disaster that the "no" campaign keeps trying
:16:58. > :17:02.to frighten people about they wouldn't invest so much money at
:17:02. > :17:07.this time. One thing I would say, the Finance Committee, which took
:17:07. > :17:10.evidence on this, and Lloyds Bank, Scottish Enterprise, say the
:17:10. > :17:16.independence referendum made more people talk about Scotland more
:17:16. > :17:19.people focus on Scotland. It is giving us a boost and helping
:17:19. > :17:25.contribute to the result we see at the moment. You see London's
:17:26. > :17:30.dominance. I mentioned the Sunday Herald, is London bleeding Scotland
:17:30. > :17:34.dry? How can Scotland continue to compete against London? If we had
:17:34. > :17:38.independence we could compete more successfully against London? I don't
:17:38. > :17:41.follow the latter point. I don't think there is logic there. The
:17:41. > :17:46.report shows that Scotland can compete. This is the point, Scotland
:17:46. > :17:49.is doing well despite the huge attractions of London as an inward
:17:49. > :17:54.investment place vehicle. Investing in Scotland gives you access to that
:17:54. > :17:58.market. Kenny says the success of Scotland as a devolved nation means
:17:58. > :18:02.we will be more successful as an independent nation. There is no
:18:02. > :18:04.logic to that what so ever. I can't see anybody this report, who is
:18:04. > :18:09.investing in Scotland, thinking it is because we will become
:18:09. > :18:12.independent. They come here, look at the opinion polls and see that...
:18:12. > :18:16.will have to leave it there. Thank you very much. Kenny Gibson in
:18:16. > :18:20.Edinburgh thank you very much for joining us. A quick look at
:18:20. > :18:28.joining us. A quick look at tomorrow's front pages: donor's gift
:18:28. > :18:32.to Labour avoided a tax bill of �1. 5 million. In the Independent, news
:18:32. > :18:34.flash, ex-Murdoch chief pleads not flash, ex-Murdoch chief pleads not