Ian Swanson: Sky’s the limit for independent Capital

IF Alex Salmond’s dream comes true, Edinburgh will find itself the capital of an independent country in just a few years. The Scottish Parliament at the foot of the Royal Mile would take full control of all Scotland’s affairs, including tax, welfare, defence and foreign relations, and London would hold no more sway than Paris or Berlin.

Advocates of independence argue Edinburgh’s new status as a “real” capital would mean more jobs and investment, and inject a new confidence.

But the city has been Scotland’s capital for hundreds of years. It is recognised as a major world financial centre and is regularly ranked among the most popular cities to visit and to live in. So how much difference would independence really make to the city?

The most immediate effect, according to Richard Kerley, professor of management at Queen Margaret University, would be a major expansion of government employment.

“I cannot see that a country that assumes a much wider range of responsibilities can do it with the current level of central government staff,” he says. “You’re going to create more ministries with new responsibilities. There might be a gesture towards distributing staff elsewhere in Scotland but, realistically, they are going to want to be close to where the power is.”

He expects more overseas diplomats, with consulates being upgraded to embassies, though he warns some countries might opt to share representation.

The Scottish Government has pointed out Ireland hosts 56 embassies with about 660 staff, compared with the 150 people working in consular offices in Scotland, and has estimated the economic benefit of the extra jobs would run into tens of millions of pounds.

The increased overseas representation in the city could mean opportunities for fee-paying schools, and perhaps the possibility of a new international school. Prof Kerley forecasts an upturn in demand for specifically Scottish professional expertise, especially lawyers, as incoming firms seek advice, but thinks there would be little impact on “commodity” professionals such as accountants, consultancies and construction advice.

He sees an increased demand for higher-end property, increasing pressure all the way down the property price chain and squeezing low-income families out of the city to Midlothian, West Lothian and Fife.

Upmarket hotels and restaurants would flourish, and Edinburgh would generally be a whole lot busier. “It would be like the constant pressure of the Festival and Hogmanay stretched throughout the year,” he says.

Tom Buchanan, SNP convener of economic development on the city council, says: “Independence would mean a massive boost to the economic and cultural offering Edinburgh would be able to make on the world stage. It would have the added status in the world because it would be seen as the capital of a country rather than a region within a larger entity.

“Companies would be looking to have headquarters in Scotland, hopefully using Edinburgh as their Scottish base. And if, as we expect, there is a reduction in corporation tax, that would be another incentive.”

Independent Lothians MSP Margo MacDonald agrees Edinburgh would become a magnet for businesses and a wide range of other organisations, saying: “Every other capital city attracts all sorts of business headquarters in every sector.”

She says broadcasting would expand, in Edinburgh as well as in Glasgow.

Edinburgh would also be the likely headquarters for Scotland’s new independent defence force.

“With the Castle and the association with the monarchy, it would be natural to have it here,” she says.

Ms MacDonald also argues independence would give a different feel to the place.

“Even now, Dublin has a confidence and a swagger despite all their troubles. People mustn’t imagine it’s just going to be a cut-down Britain, a smaller version of what we have now. It will be a country, a community, a culture with a different perspective.

“We would start doing things we have not had the money to do, like looking after the buildings in Edinburgh and big capital investment projects like a new sewage and water system to make sure we don’t have the sort of flooding we’ve had in the past.”

Of course, some things would not change. First Minister Alex Salmond has made it clear the Queen would continue as head of state, so the royal family would still come and stay at the Palace of Holyroodhouse.

Despite scare stories about UK Government designs on the Chinese attractions at Edinburgh Zoo, Mr Salmond says the pandas are staying, too.

What Edinburgh can expect?

CIVIL SERVICE: More government jobs as functions transfer from Whitehall

DIPLOMATS: Consulates becoming embassies and more countries arriving

BUSINESS: More companies wanting to set up in the Capital, creating jobs

ARMY: Scotland’s new defence force headquartered in the city

HOUSING: Rising prices forcing lower-income families to move out

ECONOMY: Extra employment boosting the city’s wealth

EDUCATION: Increased diplomatic presence a boon for private schools