Nicola Sturgeon’s resignation is a mixed blessing for business. It’s good news for British business investment but may be much less so for business in Scotland.
There are two reasons for each of those statements. Let’s take each in turn. British business and international investors may look at the UK with greater confidence, PS (Post-Sturgeon). In a world where investors have a choice about where to take their capital and job creation, Trussonomics had already damaged global confidence in the UK as a stable investment destination.
Having stepped back from that self-inflicted gouge, Sturgeon’s resignation suggests that the UK may have escaped from a medium-term threat to the territorial integrity of the UK and its single market.
While the nationalist cause is bigger than any one individual, and however substantial the first minister’s presence has been, the scales will not rebalance in favour of the Union overnight.
But the immediate collision with the UK government of Sturgeon’s plan of leveraging the general election as a de facto referendum may have passed with her leadership. Conflating a general election with a high-risk constitutional vote was always at odds with her strategy, which has seen them win elections but not a referendum.
Whoever follows her will now go in search of their own process wheeze to satisfy their party. But UK business and investors who believe in the utility of a single market on this island can breathe more comfortably today.
Sturgeon’s less well-known potential successors may struggle to build a sustained majority for Scottish independence that asserts: Brexit bad, Scexit good. Scotland’s next leader may find it difficult not to be eclipsed by her long shadow. Sturgeon was the SNP’s most gifted communicator. She offered the things people liked about Alex Salmond’s politics without his unreconstructed chauvinistic machismo.
But let’s remember, even a communicator as skilled as Sturgeon has failed to move the independence polls since 2014. There are probably few good options open to Scotland’s next first minister.
There is also a second relief to the UK’s economic wellbeing. Demonstrably, a majority Labour government is now even more likely. Sir Keir Starmer, fresh from his visit to Ukraine, will know that his chances of becoming PM in less than a hundred weeks from now have been meaningfully enhanced. And while that’s naturally welcomed by those of us who believe that the Conservatives are entitled to a prolonged period in opposition, it’s also a net positive for British business.
Starmer and Rachel Reeves, with greater support in parliament, can offer longer-term stability around their economic policies than a government with a wafer-thin majority ever could. Nor will Labour be pulled leftwards by the de minimus hard-left MPs who are instinctively more antipathetic about wealth creation.
But if the picture is brighter for British business and for those who want to invest in the UK, there is an emerging worry about the consequences for Scotland-based businesses. I hope that these fears are misplaced but worry that they may not be; after all, there are six million reasons to invest in Scotland.
But Scotland is about to watch a new first minister being elected by less than 1 per cent of her population. Every contender knows that the party membership is deeply dissatisfied. In recent years we’ve seen how, in the election for the leadership of any party in the UK, candidates often appeal to the disappointed instincts of the selectorate rather than to the best hopes of the wider electorate.
At its clearest, Salmond and Sturgeon’s SNP sought to balance economic continuity with social change. Scotland may be about to experience the end of that orthodoxy. If tax cuts were catnip to the Conservatives in their leadership campaign, a less cautious approach to business may do the trick for some in this contest.
All of this may cause a dialling down of the volume in the conversation about economic growth, skills and education, each of which is likely to be marginal in this contest. Instead, prepare for talk about guerrilla tactics of non-cooperation with Westminster.
The SNP’s coalition with the Scottish Greens is likely to change after Sturgeon’s departure, and therein lies the second challenge to Scotland-based businesses.
As Scotland is wryly witnessing, everything the Scottish Greens touch turns to expensive dust. They are a quixotic lot when compared to Greens in other countries, especially in Germany where their soulmates offer genuine leadership. By contrast, the Scottish variant have an illusory belief that jobs can be grown without economic growth. And in a government shorn of Sturgeon, they will feel emboldened to demand greater control over the government’s strategic direction. Business and workers can only hope that they bring their customary unique set of skills to that endeavour too.
There will be time to reflect on Nicola Sturgeon’s wider legacy. But her leaving may be British businesses’ profit and Scottish businesses’ loss.