Scotland positioned to provide post-brexit ‘safe harbour’ for finance firms, says Virgin director

Holyrood’s European and External Relations Committee– taking the highly-unusual step of meeting during Holyrood’s summer recess – has been told by Hugh Chater, director of banking at Edinburgh-based challenger bank Virgin Money, that Scotland could provide a “safe harbour” for financial institutions should it be able to retain access to the single market after the UK leaves the EU.

Such a scenario would mean the maintaining of passporting – the process which allows institutions to use their UK financial licences to trade in the EU.

The committee has heard from a range of industry representatives on the impact of Brexit since the referendum, and Mr Chater told the MSPs: “Where I think there may be an opportunity is a thriving financial services sector that employs close to 100,000 people.

“Depending on where Scotland’s relationship with the EU lands, there may well be an opportunity to offer that as a kind of relocation safe harbour for some institutions that are worried about the removal of passporting from maybe the the UK.”

Committee convener Joan McAlpine asked: “So, what you’re saying is that if Scotland was able to maintain its access to the single market, then that would give us an advantage? I do think that is a very credible view,” Mr Chater said.

First Minister Nicola Sturgeon is currently exploring options to protect Scotland’s place in Europe, including the prospect of a second independence referendum.

She said key interests that must be protected include free movement of labour, access to the single market and a say in its rules.

Industry leaders pointed out the need to address the uncertainty caused by the Brexit vote and the lack of clarity on the UK’s negotiating position.

Edinburgh Airport chief executive, Gordon Dewar, described the uncertainty as “a huge barrier” while James Withers, Scotland Food and Drink chief executive, said he could see no end to it in the near future.

Mr Withers told the committee that 30 per cent of the sector’s workforce is from eastern Europe, stating there was “an urgent need to get reassurance that those workers who are currently in Scotland in the food-and-drinks sector and other industries will have their rights maintained”.

Others highlighted the potential opportunities presented by Brexit.

Bertie Armstrong, Scottish Fishermen’s Federation chief executive, said it offered a “gigantic prize” for coastal communities.

“There is a systemic change on Brexit which is the restoration of our exclusive economic zone with regard to fisheries, it is half the northern continental shelf,” he said.

“It is a really, really big patch of prime maritime real estate and our challenge is to enact that and not trade it away again.”