AS I SEE IT: TERRY MURDEN on the departure of SNIB’s CEO and the need for energy security
The resignation of Eilidh Mactaggart as CEO of the Scottish National Investment Bank was accompanied by the usual thanks for her service but without a word of explanation about her abrupt departure. Ms Mactaggart, who was paid an eye-watering £235,000 a year, does not appear to have another job lined up. If she has, it would surely have been mentioned in the terse statement issued mid-morning on Friday.
This has led to speculation that includes the usual range of reasons: a failure to live up to expectations, or her own dissatisfaction with the job and / or the set up.
There has been little public debate about the new bank’s progress apart from the bank’s chairman Willie Watt calling for access to third party funding to boost its annual budget. Some argue that £200m a year is not enough to invest meaningfully in the economy.
On the evidence of its investments so far, the bank’s efforts have hardly been adventurous let alone game-changing, amounting mainly to a handful of projects that are mainly loans. In one case £4.45m for a group of hotels in the north of Scotland that could have been provided by a local bank manager (if such individuals still exist).
One potential source of conflict either for Ms Mactaggart or for her replacement could be the ‘sustainability’ remit that pervades every aspect of Scottish government thinking. It essentially rules out investment in businesses that do not tick the right boxes (see oil and gas below) or growth firms that may struggle to prove they are helping the planet while trying to get their ideas to market. These are the same limitations that potentially smother the development agencies such as Scottish Enterprise, and will do the same to the green freeports.
In fairness, SE has a fairly impressive track record of investments in SMEs, though the fact that we needed a new investment bank to replace the one under SE’s authority suggests that too often it had its hands tied.
Investment is about risk and there will be losses as well as gains. But in the political world there is no room for risks that do not pay off. It means risk is limited, and opportunities lost.
Whoever replaces Ms Mactaggart has to be given the freedom to operate on similar terms to private sector investors such as Scottish Equity Partners and Par Equity who do not have to play these political games and are free to invest where they can get maximum return and support projects that are free to thrive in the market.
Sanctions prove the need to keep the oil and gas taps flowing
In the space of a week the world has turned full circle. The global unity created to fight the pandemic and climate change has been shattered by the sound of gunfire and missiles raining over Ukraine and by a new silent war involving sanctions and cyber technology. Short of all-out military conflict between east and west it is likely to signal an an uneasy ceasefire over our green ambitions and the war on oil and gas.
As the tanks and troops roll into the disputed territories, the west is seeking a non-military response to Russian aggression. An economic war is under way in an attempt to persuade President Vladimir Putin to see the error of his ways.
Dependency on Russia for oil and gas was already a major concern. The country is the world’s third largest oil producer and as a member of OPEC+ it has a say over supply and price.
Energy supplies are now a key bargaining chip in the tit-for-tat tactics being played out as an alternative to sending in the tanks and troops.
While clean energy is a shared goal, realists have argued that the transition needs to be achieved without undermining the UK’s economy and security.
The Ukraine conflict and the economic war should be enough to persuade even hardline green lobbyists that capping the North Sea oil and gas wells prematurely would be the height of folly. Not only that, but it should spur the UK government into granting more licences for the region.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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