Claims that Scotland’s economy is less robust than England’s may have prompted some legal talent to head south of the border – but today’s figures tell a different story
Over the past five years there has been a view among some that, as far as commercial law is concerned, Scotland is not the real deal. The reasoning goes along the lines that there is not sufficient indigenous business here, and that the economy is not as healthy as south of the border, so Scottish law firms should look to England. As a byproduct, the logic is that all the top talent is being sucked towards London.
For the purposes of this article I am not attracted to the Braveheart sentimentalist view of Scotland. Interesting though the constitutional backdrop is (see below), it is the economics and the demographics that make me question the view that in the longer term England is a better place for Scottish firms to develop.
So, let’s look at some of the facts. First of all there is the economic backdrop. From 1995 to 2005 Glasgow and Edinburgh’s GDP per capita was 50 per cent above the UK average. In a Newsweek article entitled ‘The New Megalopolis’, Richard Florida argued that nations do not spur growth so much as dynamic regions.
The “New Megas” comprise multiple cities and suburbs. The Glasgow and Edinburgh combined region was identified as one of the world’s top 30 New Megas
– that is, a region identified as a “real economic organising unit of the world, producing the bulk of its work wealth, attracting a large share of its talent and generating the lion’s share of innovation”.
The population of these two cities, taken with their surroundings, is 3.2 million and growing. Glasgow is the fourth-largest city in the UK and Edinburgh the seventh. Edinburgh is the UK’s second-largest and Europe’s sixth-largest financial centre. And then there are the changes that have taken place in Aberdeen. Where once it was dependent on North Sea oil, it has now become a global centre of excellence for the energy industry.
Among them, the three principal Scottish cities provide a knowledge-driven economy. Think Dolly the sheep. So we have three cities with the potential to punch above their weight in the longer term.
On 24 June the BBC reported on research produced by the Scottish parliament’s economy, energy and tourism committee. This indicated that, despite downturns in industry, economic growth is likely to speed up in 2010 and employment is at an all-time high. It is also thought that Scotland will be more resilient to house price falls. The Scottish Retail Consortium indicated that total sales in March and April 2008 were actually up by 6 per cent on the previous year compared with 1 per cent in 2007.
While growth in Scotland will drop from 1.7 per cent to 1.6 per cent in 2009, it is predicted to rise to 2.5 per cent in 2010 – faster than UK growth for the first time since 2001. Scotland, then, has an economy that might well outpower the rest of the UK’s.
In Glasgow some major regeneration projects are coming on stream, such as the Pacific Quay digital media campus, the Clyde Gateway and, of course, the Commonwealth Games in 2014. In Edinburgh projects include the Waterfront and the BioQuarter.
Against this economic background, the constitutional dynamic is interesting. Putting aside the possibility of independence, even those with a more conservative view would acknowledge that, in the medium term, the likelihood is that there will be more, rather than less, devolution.
If a ‘devolution plus’ model is followed, this is likely to create more opportunities for commercial lawyers as economic and legal differentiators are created between Scotland and the rest of the UK.
While it has to be conceded that there has been a steady trickle of talent down to London, there are signs that it is returning to Scotland. Why?
Aside from its cities being rated great places to live and a less intense work-life balance, there is a belief that over the next 10 years it will be an exciting place to practise commercial law.
Philip Rodney is chairman of Burness