"ONE of the world's biggest and richest banks, which made a UK record profit of £10 billion last year, has been given £1 million in taxpayers' money to help it create jobs in Scotland, it emerged yesterday.
The Executive announced it was giving regional selective assistance (RSA) to HSBC to help it create 257 new fund management jobs in Edinburgh. That equates to nearly £4,000 a job. The award of such a large amount in government grants to a company with a net income of £28 billion - greater than the entire Scottish budget - sparked fierce criticism from opposition politicians.
Alex Neil, for the SNP, questioned the wisdom of giving that amount of money to a company that may well have brought the jobs to Scotland anyway.
And Colin Fox, the leader of the Scottish Socialist Party, said Scots would find it incomprehensible" that so much taxpayers' money was being given to such a big, wealthy business. "
The jobs are to be located in Edinburgh Park and will be concerned with fund administration (rather than direct asset management). Leaving aside the legitimate question of whether HSBC would have set up in Edinburgh regardless of grant, my concern would be to wonder exactly what the Executive's grant will achieve. After all, Edinburgh and its hinterland already enjoy full employment (or as near as possible); and fund administration is a highly technical business, already well represented in Edinburgh. It seems inevitable, therefore, that the 257 jobs will mainly be filled by recruits switching from already existing jobs, making recruitment more difficult for all the companies involved in the business. It seems unlikely that there will be much if any actual job creation. In these circumstances, does the grant amount to more than a recruitment subsidy for HSBC, at the expense of other companies involved in the same business?
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