18 . Glasgow Business July/August 2013
The latest Glasgow Talks events showcase insight from leading business figures and respected commentators on the economy
WALKING THE TALK AROUND THE GLOBE
I
n the latest of the series of Glasgow Talks in our Engineering Season, Keith Cochrane, Chief Executive of
Te Weir Group, highlighted what it is like to be at the heart of a Glasgow-based global business. Running a true market leader
in oil and gas, minerals and power which employs 14,000 people in 200 manufacturing and servicing centres means that the chief executive is constantly travelling overseas, where 90 per cent of his company’s business is generated. Pumps are one of Weir’s core
products and the group is a market leader in supplying
equipment to the shale gas markets with its fracking pumps. Mr Cochrane stressed how quickly this market is growing. Mr Cochrane said that about
60 per cent of Weir’s business is in the aſter-market, highlighting the group’s skills in designing, developing and then servicing equipment that has to cope effectively with heavy weather and tough conditions and very high and low temperatures in some of the world’s most extreme climates. Drawing on the best
engineering skills, both in Scotland and around the globe, allows Weir to continue to
Tough choices: the economics of independence
In a Glasgow Talk on the economics of independence, Martin Wolf, Assistant Editor and Chief Economics Commentator of the Financial Times, said that well-governed and well-disciplined small economies have done well economically. He said this was true of Denmark, Finland, Norway, Sweden, Singapore and Switzerland. On the other hand, “ill-governed and ill-disciplined small economies can perform poorly or be devastated by crises”. He said that Greece, Iceland and Ireland’s recent experience, Portugal and the Baltic States came to mind. “Which would Scotland be? That
is not yet known. Maybe it never will be. That depends on its choices.” Mr Wolf argued that a number
of key decisions, particularly what currency it adopted, would determine many other ones. “My conclusion is that the rest of the UK must not lose control of its central bank, in any circumstances. It is a vital insurance mechanism.” He argued that independence
would have a major effect on Scotland’s finance sector. “The present financial sector of Scotland would be unsustainable if Scotland became independent,” he argued. “It would not have credible fiscal backing.”
Because Scotland’s finance sector
would do a substantial amount of its business in the rest of the UK (rUK), the government of rUK would also probably want substantial regulatory control over Scottish institutions. “For both reasons, the biggest
ones would probably have to shift to London,” he said. He said that an independent
Scotland would have a less diversified economy heavily dependent on North Sea oil, an unstable source of revenue, and that its credit rating “would probably come down a notch or two”. He concluded: “The purely
economic aspects of independence
raise a number of very difficult questions. Indeed, they raise the question of how independent Scotland would really be, particularly if it remained within the UK monetary area.” Anton Muscatelli, Principal and
Vice Chancellor of the University of Glasgow, said that expansionary monetary policy through quantitative easing in some G8 countries was a necessary but not sufficient tool to sustain a global recovery. He said that a short-term impulse
of capital spending calibrated across a number of G20 countries would be important and possibly necessary in ensuring economic recovery.
Keith Cochrane
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