Magazine article The Spectator

No Longer Proud to Wear the Tartan?

Magazine article The Spectator

No Longer Proud to Wear the Tartan?

Article excerpt

Bill Jamieson wonders how badly 'Brand Scotland', with its associations of canniness and caution, has been damaged by the financial crisis and a dismal Scottish Prime Minister

Scotland's fortitude has certainly been tested these past 12 months.

Its proud claim to have a special excellence in finance - an innate canniness and caution - has been shattered by the demise of its two banks headquartered in Edinburgh, Royal Bank of Scotland and HBOS. It didn't matter that New York, London, Dublin and Frankfurt also suffered blows to their banking systems. These were blows that Scots took personally, a wound to our very definition. Scotland was whisky, lochs, glens, tartan - and banks. There were also, of course, other stains on the brand, at least as far as England was concerned: a surfeit of Scottish Labour Cabinet members, chippy Scottish nationalists constantly whingeing over money, a Scottish First Minister, Alex Salmond, relishing the prospect of a Westminster parliament 'hung by a Scottish rope', and a cheerless, luckless, moody Scottish Prime Minister.

Scotland's brand of politics - one that defines the nation by the size of its government budget and public sector - has plunged from favour. But it has been the blow to the banks that has caused the greatest soul-searching. In Edinburgh, from the elegant Georgian squares of the New Town to the Hanseatic alleyways off the Royal Mile, it seemed less like a banking crisis than another Darien - that ill-fated 17th-century attempt to create a utopian colony in Panama that did for our dreams, our wealth and our hopes of Scottish independence. Might the shattering of RBS and Bank of Scotland do the same for the SNP's ambitions? Scotland's share of UK public debt is reckoned at 9 per cent. With the UK figure rising to £1.4 trillion by 2013-14 this would suggest a liability of £126 billion, well over 100 per cent of Scottish GDP. That leaves no scope for playing Mary Queen of Bountiful with stricken banks and a style of politics dominated by an ever-expanding public sector. Other financial centres are wrestling in more practical terms with the 'can do' of recovery. The nagging worry among Scots is whether Scottish finance - and indeed Scottishness as a brand - may be mortally damaged.

That these questions persist one year on testifies to a self-doubt that has crept in like a haar over the Forth. For others, however, it has brought moments of truth about a continuing change within and without that the banking crisis has accelerated. The shift away from a once-deep attachment to tartan and shortbread-tin branding has been underway for some time.

Scotland and Scottishness will become even less relevant to the 'unique selling point' of any Scottish-based financial services company. The threat to Scotland's position in finance had been building long before the global financial crisis - in particular the hegemonic shift of global finance and power from Western economies to those in the Asia-Pacific region. Some firms have already chosen to rebrand themselves and remove the word 'Scottish' from their title, partly to de-emphasise their Scottishness.

Others are more sanguine.

Says Sir Donald MacKay, chairman of the £1.5 billion Edinburgh-based Scottish Mortgage Trust, 'We have discussed a name change within the company for several years.

But the Scottish name still works for us in America and Canada, and also in Japan.

And many investors might be put off by a change. They have been investors for a long time and they are very comfortable with it.

In any case, if there's any concern about words in the title, it's probably more over "Mortgage" than "Scottish".'

Standard Life, the giant among Edinburgh's investment institutions, has had a 'good' crisis with a net inflow of funds, and other asset management companies see little sign of 'brand contamination'. In fact, a recent report on global financial centres found Edinburgh maintaining its position as an asset management centre in the world top 20. …

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