Scottish Independence: Would Edinburgh get boost?

Edinburgh is already popular with tourists from all over the world 'and members of the business community hold different opinions over whether independence would see an increase or decrease in visitors. Picture: Julie Howden
Edinburgh is already popular with tourists from all over the world 'and members of the business community hold different opinions over whether independence would see an increase or decrease in visitors. Picture: Julie Howden
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EDINBURGH has been Scotland’s capital for hundreds of years, it’s the home of the Scottish Parliament and it draws millions of tourists annually – but independence supporters say a Yes vote would lift the city to a new level.

As the capital of a newly-independent state, they claim Edinburgh would instantly gain a higher profile.

They predict a boom in diplomatic activity, new government offices opening, other businesses and organisations moving in and an increase in tourism.

There are currently 33 consulates in Edinburgh, but in the event of independence the diplomatic corps would be expected to increase dramatically.

Dublin has 56 embassies with about 660 staff, compared with the 150 people working in consular offices here.

Edinburgh Central SNP MSP Marco Biagi says: “Being the capital of an independent nation will give Edinburgh the chance to be a truly global city.

“If you look at Dublin, it has a far bigger ambassadorial presence than Edinburgh. Every one of these embassies employs local staff and that feeds into the local economy.

“Consulates are usually just a consul and one member of staff – and sometimes just an honorary consul, representing the country in his spare time. An embassy would be far more important and far larger.”

He believes the higher profile could also allow Edinburgh to carve out a distinct international role for itself.

He says: “Copenhagen has become known as a centre for international development working with the UN, European agencies and international charities.

“That particular niche has obviously been taken, but Edinburgh would be well placed to develop an international role perhaps in green energy or peace-making and international arbitration – especially given that we can expect one of the first acts of an independent Scotland to be to remove Trident.”

An independent Scotland would have to establish a raft of new government departments and agencies, from a Foreign Office to a new Scottish Motor Services Agency, replacing the DVLA.

In some cases, staff would probably simply switch over from existing UK departments to the Scottish ones, but in others posts could be moved from south of the Border to Scotland or new jobs would be created.

Mr Biagi says: “Scottish taxpayers are already contributing to many senior civil service jobs currently situated in London. These roles are going to have to be brought back to Scotland to run the taxation and social security systems, for instance, and instead of contributing to the south-east of England economy they will contribute to the Scottish economy.

“I don’t know that Edinburgh will get all of them. Other cities will have a claim to key functions, but Edinburgh is the Capital and can expect its fair share.”

There will be pressure to spread new jobs around to different parts of the country, but as the seat of government, Edinburgh will be where many departments want to be, reinforcing its role as the centre of power.

Mr Biagi says: “Edinburgh faces a choice of being the capital of a country which in international terms is no more than a self-governing province or a genuine capital city. That’s a major step up and would offer material benefits to the city as well as a greater sense of internationalism, cosmopolitanism and connection.”

But Edinburgh-based Labour peer and former MSP George Foulkes is sceptical about all the claims of increased status and the supposed benefits of becoming the capital of an independent Scotland.

“We already have consulates from all the major countries,” he says. “We don’t need independence to get representation from around the world here in Edinburgh.

“It will make no difference to tourism. Everyone thought devolution, which I support, would make a huge difference and I don’t think it has.

“Edinburgh has all the attractions and has had many of them for hundreds of years. Independence would make no difference to that.”
Indeed, Lord Foulkes argues independence could even harm tourism.

“The vast majority of tourists coming to Scotland and Edinburgh are from England,” he says. “Independence could deter tourists coming from England.

“Any advantages from independence would be countered by so many disadvantages in terms of the loss of employment especially in financial services, that’s the problem.”

Edinburgh’s tourism sector has mixed views on whether independence would be good for business.

One leading figure says some tourism firms see big opportunities if there is a Yes vote, while others are worried about the effect on their company.

But he says 2014 is proving a great year for tourism and they expect that to continue into next year, whatever the referendum result.

“The Commonwealth Games, the Ryder Cup and the referendum – it’s all happening,” he says. “It’s a great opportunity for selling why Scotland is an interesting place, and the social and cultural differences from England.”

Any increase in interest from tourists and the presence of more diplomats could mean yet more direct flights from Edinburgh Airport to other countries, rather than people having to travel via Heathrow.

There could be a knock-on benefit to businesses across the city. Gordon Henderson of the Federation of Small Businesses – which includes many shops, cafes and restaurants, which might be expected to benefit from a boom in tourism or a growth in jobs – says a survey of members found them just as split on independence as the rest of the population.

“A lot of members think it’s brilliant and brings great opportunities, but an equally large proportion think there may be a few problems.”

ANALYSIS

By Graham Birse, Director of the Edinburgh Institute at Edinburgh Napier University

In the event of a ‘Yes’ vote, Edinburgh would obviously acquire a new status as the capital city of an independent Scotland.

Beyond the symbolism, many consulates would upgrade to Embassies and there would be much more political activity with visiting delegations commensurate with a capital city – albeit the capital of a relatively small country.

There is an international premium that goes with that status.

Would that premium compensate for the downside risks we have heard about from the financial services sector and others? Discuss.

It is not a given that there would be many more government jobs as a result of independence. The Scottish Government would have to redeploy its resources to make the best use of available money and consider how it would pay down its share of UK Government debt. That is why the details will really only begin to become clear in the period after the Referendum result is known, during negotiations. Regardless of the referendum result, public sector austerity is likely to continue for the foreseeable future. Therefore, any government, in an independence scenario or a Scottish Government within the UK, would have to think carefully before spending large sums of money on elaborate new structures and services.

Whether there would be a surge of private sector companies into the capital of a newly independent Scotland would depend on a number of variables, including corporation tax and economic development policy. Businesses would take a hard-nosed approach. There is very little sentiment involved in business location decision-making.

No international organisation would say ‘Let’s invest in an independent Scotland’ because they liked us. They would be asking ‘What is the rate of corporation tax? How would we service the EU from there, can we access a skilled workforce. What are the costs of re-location and much more?’

There are no easy answers. Inevitably, there are lots of ifs, buts and maybes. The people of Scotland will decide!