Salmond scales up foreign loan application

Doha Image copyright Getty Images
Image caption The first minister is in Qatar to promote investment, business and education

It's not a great time for Qantas to ground its flights when so many Europeans are heading east to borrow money.

The favourite destination for those in need of a loan is Beijing. The European Financial Stability Facility is looking to China, along with sovereign wealth funds, to help expand its firepower from the 250 billion euros still in its kitty to somewhere around one trillion euros.

As the Chinese are the ones with the savings surplus, they're the obvious first airport of call for a European bailout. But as Beijing reckons much of Europe to be feckless and feather-bedded with welfare and pensions, it may attach a few strings.

Banging the drum

Apparently, it's hard for these sovereign investors and wealth funds to get out of bed for anything less than half a billion pounds worth of investment.

And that's one reason why Alex Salmond is heading to Qatar this weekend, and China in early December, with a new proposition to boost the Scottish economy.

The Persian Gulf visit by the First Minister is also to bang the drum for Scottish business and education, with McGrigors law firm opening an office, Heriot-Watt University opening a campus, Weir Group expected to announce new developments and exports of renewable energy technology to be promoted.

But the big new investment idea being taken to the sovereign wealth funds is for Scots to bundle up packages of investment proposals that could look attractive to those who think in billions.

With capital funding exceptionally tight, and the Scottish government looking to sources other than the Treasury, that's how to plug the significant gaps between funding, capital project aspirations and the reluctance of Scottish ministers to sign private finance deals with British investment partners.

According to a Scottish government official talking to property specialists this week, these large-scale investment packages could be backed with government support to reduce risk. It's become part of the City Strategy, with more to be announced before the end of the year.

Tax breaks

The other leg of the strategy is in enterprise areas - an election pledge, backed by a modest amount of Whitehall funding, and so far very little detail.

Don't confuse an area with a zone, however, because that would smack of the disappointment for the zones of the 1980s. Back then, focussing government effort and tax breaks on areas of deprivation did little to create new jobs, but merely shifted them from elsewhere.

The detail on the new plan for four Scottish enterprise areas is also awaiting publication by the end of this year. Local authorities have been lobbying for inclusion. And the indications given to the property professionals are that the enterprise plan won't create single sites, but the tying together of various sites into a single enterprise "area".

The intention is to ensure this it is attractive to different types and sizes of company, and it's aimed at areas that are ready to be developed quickly.

The controversial bit may be the priority being given to the areas with the best prospects of growth, rather than the areas with greatest unemployment and deprivation.

Giving tax breaks for the creation of jobs in the energy corridor being developed along the Aberdeenshire and Aberdeen coast, for instance, may not go down all that well with those in rather more need, if it leaves out, say, East Ayrshire, West Dunbartonshire, Inverclyde or Moray.