The man who would be king

By David Hatcher

The collapse of Scotland's biggest banks has put plans for the country's independence on the backburner. David Hatcher talks to first minister Alex Salmond

Alex Salmond is a frustrated man. As the leader of a party whose raison d'etre is Scottish independence, he finds being first minister of a devolved government stifling.

Last Friday, at the Scottish Labour conference, Gordon Brown slammed Salmond and the Scottish National Party for being 'fixated on separating Scotland from the UK at any cost', and said the global economic crisis has put paid to the argument for independence. The day before, the Scottish parliament voted against the SNP's proposed bill for a referendum on independence.

His arguments for independence have also been undermined by the virtual collapse of the two jewels in the Scottish banking crown: HBOS and the Royal Bank of Scotland. Brown pointed out that had Scotland not been part of the UK, it would now be facing the same financial meltdown as Iceland, a country that Salmond once said could serve as a role model for Scotland.

Downturn from Downing street

In a response to Brown's Iceland jibe, Salmond lays much of the blame for the recession on Downing Street. While Salmond's critics say the union provided Scotland with a safety net, he argues it would not have needed one if Westminster had acted sooner.

In Salmond's view, Scotland's lack of independence makes his job of improving the Scottish economy more difficult. He is using devolved powers to reform the planning system, and believes an independent Scotland could better serve the property industry, as its government would have more power to pump money into infrastructure and greater control over the country's banking sector.

Scotland's planning system is renowned for being painfully slow, and Salmond realises there is no room for such inefficiency in today's distressed market. 'You must make sure that any investment opportunity is grabbed with both hands, hence the changes we are making,' he says.

Last October, Scotland's finance secretary, John Swinney, unveiled measures to simplify planning and aid sustainable economic growth, by enabling quicker decision-making by councils on 'high-quality' applications.

Ken Ross, chairman and chief executive of Elphinstone and chairman of the Scottish Property Federation – a body with which Salmond is eager to engage, as 'any government benefits from a bit of practical advice' – is pleased with the announcements on the planning regime. However, he wants to see a change in planning authorities' attitudes.

'The first minister and the Scottish government have always promoted sustainable economic growth, but the big concern is ensuring that this desire is taken on by all areas of the local authorities,' says Ross.

It will be harder for developers in Scotland to benefit from any improvements to the planning system following the virtual collapse of HBOS and RBS last October, as these native stalwarts can no longer be relied upon for funding.

Salmond says an independent Scotland could borrow independently of the UK Treasury and pump more money into infrastructure. In January, the Treasury turned down his request to fund the new Forth Bridge, Scotland's biggest-ever infrastructure project, with a £2bn Treasury loan payable over 30 years.

The Scottish government is setting up the Scottish Futures Trust, a not-for-profit organisation replacing public-private partnerships (PPPs) and private finance initiatives (PFIs). However, the Forth Bridge is considered too big a project for it, and the trust has come under scrutiny.

Phil Miller, executive director of the Edinburgh-based Miller Group, is concerned that the trust's funding model will not be an adequate substitute for PPP or PFI. 'Funding is a major problem in delivering projects at the moment and there needs to be a desire to find a solution,' he says. 'It is a common cause for the public and private sectors.'

Miller is not alone in his concern. David Hunter, managing director of Hunter Advisors and chairman of TAL CPT Land's Maxim, the 756,000 sq ft speculative Glasgow office scheme, also doubts the government's ability to fund large infrastructure projects. 'Salmond needs to do his bit and make sure Scotland is a highly attractive place for business,' he says.

'We need a very positive planning system, instead of taking years to deliver the infrastructure that is needed.'

(Abridged)