Ed May 07 FC:Edinburgh Issue 2 p3 - The Edinburgh Chamber of ...

NEW
Think about it.
Blair’s message
to Edinburgh
Pages 6-8
£2.00 | April/May ’07

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Edinburgh Chamber of Commerce business comment April/May ’07 3

KEY CHAMBER
contacts
President Richard Jeffrey
Edinburgh Chamber of Commerce
Capital House, 2 Festival Square, Edinburgh, EH3 9SU
Tel: 0131 221 2999 Fax: 0131 221 2998
Website: www.edinburghchamber.co.uk
DEPUTY
CHIEF EXECUTIVE
Graham Birse
DIRECTOR BUSINESS
DEVELOPMENT &
ENTERPRISE
Alasdair Kerr
CHIEF EXECUTIVE
Ron Hewitt
Partners in Enterprise
DIRECTOR EVENTS
Ann Baird
DIRECTOR
INTERNATIONAL
BUSINESS
Murdo Beaton
The best value membership
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www.edinburghchamber.co.uk
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Through the best networking events in town, up to five per month,
including the exclusive President’s Forum
By playing some of Scotland’s finest courses with our Chamber
Golf Club
Big Savings
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member’ offers with savings of 20% or more
Discount schemes including:
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We gratefully acknowledge the support of the firms whose advertisements appear within this publication, however,
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the advertisers even when making specific offers to Chamber members. tdr (April ’07)

CONTENT ● COMMENT
NEW
Speaking for business in
the corridors of power
£2.00 | April/May ’07
6-8 COVER STORY – THINK
ABOUT IT
Blair’s message to Edinburgh
9 IT’S MAKE YOUR
MIND UP TIME
Think about it.
Blair’s message
to Edinburgh
Pages 6-8
The ‘Great
Debate’ between
Wendy and
Nicola
16-17 WHY SCOTLAND’S CITIES
NEED TO SELL
Why Edinburgh
needs to
promote itself
22-23 INFORMATION
TECHNOLOGY
How to equip your teams for change
by Ron Hewitt
CHIEF EXECUTIVE
At the heart of your
Chamber’s
commitment to its
members is a
willingness to engage
in debate, to influence
and to seek positive
outcomes for business. That’s why
we spend so much effort through
our policy groups, our
conversations with individual
members and our questionnaires
trying to be sure about what you
think.
The other side of this coin is that
we are constantly connecting with
politicians. Our ability to convince
them at every level from Edinburgh
City Chambers through Holyrood to
Westminster and on to Brussels
that we are honest brokers with no
party political axe to grind, and that
we ‘just want the best for business’
is crucial to encouraging them to
listen to what we have to say. An
important part of that process is
having your views to share with
them.
Over recent months we have had
some fantastic experiences in this
regard and my thanks go to those
of you who have shared in the
experience with us.
We started with a transport
meeting in the Members’ Hub with
City Council spokespeople from
every party on their policies. Then
we did the same at a Balmoral
breakfast with the Holyrood
representatives. As with every
event since we were able to attract
the party speakers from each party
on the issue. Not only did our
members enjoy the chance to hear
what each party’s line
would be postelection,
they also
got the chance to
inform the speakers
of the views of
business – and
potentially influence
their manifestos.
Environment or
Economy, you have
views and questions
which we are happy to facilitate.
Apart from responses to individual
concerns we can be sure that the
more we speak out as a Chamber
the higher up the agenda are our
views regarded. Provided they are
sensible, which can only be the
case if our membership participate.
And participate you have. Our first
Spring event at this level was the
Great Debate on March 1st when
Wendy Alexander and Nicola
Sturgeon locked swords to talk
about the relative merits of Labour
vs. SNP economic policy. Three
hundred people filled the Edinburgh
International Conference Centre to
engage in that debate, and the
questions were penetrating and
revealing from our members.
If you thought that couldn’t be
beat a fortnight later we hosted the
Prime Minister at a business
breakfast where the majority of the
session was given over to a
genuine engagement with our
members who were as agile with
their understanding of business
needs as Tony Blair was with his
responses.
The next day after booking this
event, Geoff Hoon, Minister of State
for Europe asked for a small
audience with key movers and
shakers in the Chamber…
Does this suggest we are doing
something right?
EDINBURGH CHAMBER OF COMMERCE
– representing over 1,600 businesses with a combined turnover in excess of
£4 billion and employing more than 100,000 people
Edinburgh Chamber of Commerce business comment April/May ’07 5

COVER ● STORY
Think about
By Graham Birse
Tony Blair brought a simple message
to the city of his birth last month –
think about it.
The Prime Minister breezed into Edinburgh and sat down
to breakfast with the Chamber of Commerce on the same
day that former RBS Chairman Sir George Mathewson
had declared for the SNP, adding a certain spice to bacon,
eggs and sausage at The Sheraton.
Mathewson was the latest, and most significant, captain
of industry to be paraded by the SNP in advance of May’s
Election as proof positive that Independence is a viable
option. Supporters of devolution within the Union,
including Sir David Murray, beg to differ.
As for Tony Blair. Well, he took it all in his stride- as you
would expect from a three time Election winner and Prime
Minister for a decade. After reminding Scottish Chambers
of Commerce members of the low inflation, high growth
economy that had sustained business prosperity for much
of that time, the PM advised us of the opportunities and
challenges of globalisation, particularly from China and
India.
On recent visits to India and Pakistan, he said, he had
been impressed – not just at the flexibility and skill of the
workforce in undertaking component assembly tasks- but
their increasing competence in bioscience and advanced
R&D. The result, he said, would be intense competition in
these sectors, currently considered beyond the reach of
developing Asian economies.
Every ounce of resourcefulness, energy and skill- for
which the Scots are renowned, would have to be utilised,
he said, to ensure the UK stayed ahead of the game. In
such circumstances, he argued, why would you choose to
break away from the rest of the UK and Europe?
Ultimately, he conceded, the choices facing the Scots
would be for the Scots themselves to determine. But, he
warned, do not imagine that this is a simple emotional
choice based on a sense of patriotism. “These are serious
matters,” he said, “with serious implications that will last for
a very long time. So I would say to you, to Scotland, think
about it.”
And after fielding questions from Chamber members, he
was off- leaving events to run their course.
To hear Tony Blair’s speech in full please visit our
website at www.edinburghchamber.co.uk/
news/news_archive/prime_minister_breakfast.cfm
Blair’s message to
6
April/May ’07 business comment Edinburgh Chamber of Commerce

COVER ● STORY
it
Edinburgh
Edinburgh Chamber of Commerce businessComment April/May ’07
7

COVER ● STORY
A word
with
the PM
8
April/May ’07 business comment Edinburgh Chamber of Commerce

GREAT ● DEBATE
Seconds out…
It’s make your mind up time
‘Great Debate’ between Wendy and Nicola kicks off election campaign.
By Graham Birse
It’s a measure of their status as two of the brightest
and best politicians of their generation that you
don’t need to know their second names to register
who Wendy and Nicola are.
The leader of the current opposition in the
Scottish Parliament – and the former Enterprise
Minister and Chair of the Parliament’s Finance
Committee – are key players in a Holyrood drama
that will reach its conclusion on May 3. Who will
emerge as the leading party? That is a matter for
you, the voters, to decide, but you would be hard
pressed to obtain the information you need, should
you decide to vote from a business perspective.
What would the fiscal and economic
consequences be of independence? How would
the Scottish economy behave? What would the
response be in the business community? And what
would the impact be on jobs- and growth?
It was out of a sense of frustration that these
questions were not being addressed by the
politicians that we organised ‘The Great Debate’,
with the support of The Scotsman and Scottish
Chamber of Commerce, at the EICC in March. The
stage was set for a keynote event in front of an
audience of business people, lecturers and
students- and our political combatants did not
disappoint.
Like a wily old boxer turned referee, the
Scotsman’s Executive Editor, Bill Jamieson, Chaired
the contest, probing, prompting and crossexamining
the protagonists. And while no knockout
blows were landed, the overwhelming majority of
the audience responded in the affirmative when Bill
asked the question: “Has your knowledge of the
economic issues surrounding this election been
improved as a consequence of this debate?”
Gesture politics: (l-r) Wendy, Bill and Nicola
Local schools joined business people in the audience at The
Great Debate
To help you make your own mind up, we’ve
reproduced Wendy and Nicola’s opening
statements on our website in full at
www.edinburghchamber.co.uk/news/news_archive/
may_elections.cfm
ECC Chief Executive Ron Hewitt greets
Wendy Alexander
Nicola Sturgeon
Edinburgh Chamber of Commerce businessComment April/May ’07
9

SCOTTISH ● ELECTION
Which way will business
Ross Laird
HEAD OF
CITIGATE PUBLIC
AFFAIRS IN
SCOTLAND AND
CHAIRMAN OF
EDINBURGH
CHAMBER OF
COMMERCE
POLICY GROUP
There is a feeling that the Scottish
Parliament is starting to mature and
have a greater confidence about its
aspirations and limitations. The
Parliament has now been in operation
for eight years and, for such a young
institution, has been relatively
successful. There are few gripes
about ‘bad legislation’ and the
Committees appear to have worked
as a successful means of scrutinising
legislation and public policy. There
are now demands from many
quarters for the powers of the
Scottish Parliament to be enhanced
(tax, energy, transport etc) and this
may become a key theme in the
coming years. But 2007 may be the
time when voters decide that the
current partnership is not their choice
of government, ushering in a new
coalition. What then for Scottish
public policy?
Firstly, most of Scotland’s political
parties agree on the direction of
travel for Scotland – sustained
investment in the economy, education
and health. Increased focus on young
people and dealing with anti-social
behaviour are all key elements in the
forthcoming election manifestos.
Secondly, the SNP clearly differ
because they wish to see a
referendum on independence. That
will bring a degree of uncertainty,
which may dampen business
confidence, but the SNP will want to
be perceived to be as businessfriendly
in the interim. So even under
a new partnership with the SNP, we
can expect to see a continuation of
current public policies on the whole
and a strong focus on the economy –
why, after all, would they wish to
upset the apple-cart prior to such an
important vote?
Meanwhile, if the Lib Dems and
Labour form the Scottish Executive,
there will be an element of business
as usual. The two of the major parties
have a track record of working
together and sensibly negotiating
deals. The Conservatives and Greens
have said they wish to stay out of
Government, but could become
important deal breakers if the
electoral margins are tight.
So, regardless of which parties
form the next Scottish Executive, it
will be back down to business.
Edinburgh Chamber of Commerce
asked all of the political parties to
respond to the following question:
What are the three most important
policy measures you intend to take, if
elected, to improve the Scottish
economy and conditions for
business?
Here are the replies:
SCOTTISH LABOUR
PARTY
1. Making Scotland’s education
system once again the best in the
world whilst radically improving skills
training to make it easier for business
to upskill in a way that does not disrupt
the running of their business.
2. Improving Scotland’s infrastructure
including rail improvements, completing
vital missing road links, building EARL
and Edinburgh trams and extending
direct air links.
3. Reducing the regulatory burden
on business whilst resisting all plans
for a local income tax which would
place uncessesary administrative
burden on business.
SCOTTISH NATIONAL
PARTY
1. Take 120,000 small businesses out
of Business Rates through our Small
Business Bonus and reduce the rates
burden on a further 30,000 small
businesses. Businesses with a rateable
value of less than £8k would be exempt,
those with a value of £8-£10k would
receive a 50% reduction and those
between £10-£15k a 25% reduction.
2. Direct the focus of the Enterprise
agencies towards the fostering of
indigenous businesses through their
support of innovation, access to capital,
exports and the knowledge economy.
We will also focus all local and national
agencies on increasing the number of
working age people in rewarding and
compelling work.
3. We want these policies to usher in
a new era of efficiency, co-operation
and international competitiveness as a
signal of what the SNP and the people
of Scotland can do, so that we can
reduce Corporation Tax and form the
virtuous circle that will allow us to attract
more people, more investment and
achieve higher revenues.
SCOTTISH CONSERVATIVE
PARTY
1. No more business rates for smaller
firms. Those with a rateable value of
£7k or less - exempt. Those with a RV
of £7-£8k - 75% discount. Rateable
value- £8-11.5k- 50% discount. All
others up to £15k RV - 10% discount.
This policy is fully costed from our plans
to slim down Scottish Enterprise.
2. A new Forth Crossing. The Scottish
Conservatives have consistently
pressed the Executive on the need for a
new crossing and have no hesitation on
making this our top transport policy at
this election.
We will also commission a review into
the development of high speed rail
between Edinburgh and Glasgow to
create a genuine economic
powerhouse in the central belt.
10
April/May ’07 business comment Edinburgh Chamber of Commerce

vote?
3. Re-balancing the private and
public sectors. A fundamental problem
facing the Scottish economy is the
unhealthy proportion of GDP absorbed
by the public sector, which is at least
51% and may be higher. Too much
spending is absorbed by this vast
public bureaucracy which undermines
the ability of businesses to create the
wealth which pays for these services in
the first place.
LIBERAL DEMOCRATS
1. Over 95% of businesses in
Scotland are small businesses. They
are the cornerstone of Scottish
communities. The local corner shop,
post office, butcher, baker and chemist
were once a feature of every town and
village across the country. But today
they are battling to survive. If Nicol
Stephen is elected First Minister after
the elections he has given a
commitment to lead a government that
gives our local authorities the powers to
exempt essential local shops from
paying business rates where there
would be a real benefit to the
community. This could make a huge
difference to the overheads of these
businesses and give them the chance
to invest in improvements they might
otherwise be unable to afford.
2. In government we have already
made progress in reducing business
rates. We would like to go further still.
The second point in this plan will see
our business rates become lower than
that of England. Liberal Democrats want
to give Scottish business a competitive
advantage and to give a clear signal
that Scotland is a great place to do
business.
3. Thirdly we want to bring forward
changes to the system of business rate
valuations to make sure that businesses
are not penalised with an increase in
their rateable value for taking the farsighted
decision to install
microrenewables to reduce their fuel
bills.
Who will form the next administration in Holyrood?
Pic-Adam Elder (C)2004 Scotish Parliamentary Corporate Body
INDEPENDENT MSP -
MARGO MACDONALD
1. “I’ve been banging the drum for
Capital City Status including a
recognised and unique stream of
funding for some time now. I suspect
that the fairness and common sense
inherent in this approach is winning
support to ensuring as it recognises
that Edinburgh continues to be possibly
the main driver of the Scottish economy
and certainly the foremost marketing
tool. This is my first priority.
2. My second is to help facilitate a
meeting of minds amongst Scottish
business educationalists and Scottish
Enterprise on what constitutes a
reasonable standard of literacy and
numeracy for young people and
returners.
3. I also fancy the idea in general of
cutting red tape, but confess I would
need to learn more from businesses at
the pointy end off things as to the
difference between reasonable
regulation and daft processes.
SCOTTISH SOCIALIST
PARTY
1. Free Public Transport - The SSP
policy to address climate change
would additionally unlock the
gridlock that costs business £1bn
per year as trade and workforce
such as traffic jams.
2. Scrap council Tax and free up
spending of the poorer and thus
stimulate the economy and
especially those who spend a higher
proportion of their income.
3. Build 100,000 new houses in
the social rented sector and
consider the economic boost that
would give Scotland’s construction
industry.
The full responses from each party
can also be viewed at
www.edinburghchamber.co.uk/new
s/news_archive/prime_minister_bre
akfast.cfm
Edinburgh Chamber of Commerce business comment April/May ’07 11

NETWORKING ● NETWORKING
Inspiring connections at
Supper with the Editor of The Times
February
2007
The
President’s
Table
Speaker: Robert Thomson, Editor of
the Times (centre) with Melanie Reid,
The Herald & John McLellan, Editor of
The Evening News
Jane Richardson, Oracle & Alison
Robb, Weber Shandwick
Stuart Tait, Lochroe & Graham
Sharrock, Forum Interactive Ltd
Sir Jack Stewart-Clark & Lucy Scillitoe,
Dundas Castle
John Ritchie, Barstow & Millar &
Robert Menzies, Menzies Business
Solutions Limited
Meet the MSP’s!
–Women in
Business Lunch
Ulf Brethauer, Edinburgh Marriott & Jayne
Clark, Roxburghe Hotel & Golf Course
Ian Bell, RBS & David Reid, Principal
and Prosper
February 2007
Members enjoyed the chance to engage with MSPs at a lunch held at the
Scottish Parliament
12
April/May ’07 business comment Edinburgh Chamber of Commerce

NETWORKING ● NETWORKING
Edinburgh Chamber
The ‘Great Debate’ – Wendy vs Nicola
March 2007
Caption Competition...Caption Competition...
Nicola Sturgeon MSP & Ron Hewitt,
ECC pictured with students from
George Heriot’s School
Neil Cuthbert, ASC; Howard
McKenzie, Jewel & Esk Valley College
& Maidie Cahill, The Scottish
Qualifications Authority
Sir Tom Farmer & Ron Hewitt pictured
with George Heriot’s students
(l-r) Peter de Vink, EFGH Corporate
Finance; Sir Tom Farmer, Ron Hewitt,
ECC & Hans Rissman, EICC
Nicola Sturgeon MSP, David Ross,
President of Scottish Chambers of
Commerce and Mark Strudwick,
Princes Scottish Youth Business Trust
Ellen & Archie Gibson
Win
A BOTTLE OF
WHISKY IN OUR
CAPTION
COMPETITION
Just what is Ron Hewitt, ECC Chief
Executive saying to the Prime
Minister?
To enter, email your name,
company name and caption to
fiona.duffy@edinburghchamber.co
.uk by the 10th May 2007. The
winner will be announced in the
June/July issue of Business
Comment. Good luck!
Caption Competition...Caption Competition...
Geff Hoon visits
The Chamber
Geoff Hoon was in listening mode when he
dropped into the Member’s Hub at ECC on
Monday 19th March. A group of businesses with
European connections spoke to him about issues
such as the single market, the EU response to
globalisation, better regulations and energy.
Edinburgh Chamber of Commerce business comment April/May ’07 13

PERSON ● PROFILE
The Secrets of success
Who? Nora Farrell
What? Managing Director,
Weber Shandwick,
PR Consultants
Questions answered on:
5 March 2007
What were you doing between 10 and
12 this morning?
I completed a meeting with a property
client, forward planning to develop their
marketing and comms priorities for the
rest of the year. I then went to a press
photocall to announce a public
consultation, answered several media
calls relating to a number of client
accounts; arranged a number of internal
meetings and started to look at drafting
an article on Whisky for Women
What do you see as your job’s biggest
challenge?
Two main ones – bringing on teams to
deliver consistent, high quality work and
developing products and services which
enable us to deliver innovative ways of
communicating to different people (new
media; blogs, podcasts for instance)
What are you most proud of?
Becoming youngest MD of a UK plc at
28 and turning around a loss making
business in under a year; being
nominated Scottish Businesswoman of
the Year in 2003; Weber Shandwick
being recognised by the United Nations
with an award for our Save the North Sea
environmental campaign – PR can make
a difference!
If given a second chance, what would
you do differently?
Well they say that everything happens for
a reason so probably not much as I
count myself very fortunate both
professionally and personally
What do you believe are the 3 key
stages on your career ladder?
Finding the right career for a start!
Thereafter The Rookie: learning the
groundwork; The Entrepreneur: doing it
your way; The Teacher: passing on your
skills
Where do you stand on work/life
balance?
Great supporter – don’t like people not
taking holidays and staying in the office
late too often. Think that is a reflection of
bad management. People have to feel
fulfilled on a number of different levels in
their lives – all work, no play is pretty
boring!
How do you wind down from a busy
work schedule?
Coming home to a three year old is a
pretty good leveller – brilliant fun and
talks more sense than some! Running;
ski-ing; reading and of course a glass of
wine with friends is always a winner
(come to think of it I am always on call
for media so do I ever ‘wind
down’?)
What qualities do you need
to see in your employees?
Integrity; intelligence;
collaboration; enthusiasm;
eager to learn; good listener;
innovative; good sense of
humour
In business, is it more
important to be liked than be
successful?
Why can’t you be both? If you
are not successful you
probably won’t be liked as
there would be no business,
no work, no money.
What is the one piece of
advice you would give to
others trying to reach
the top?
Don’t try and be liked,
be successful! OK –
Think of things that others can’t. Look at
things form a different perspective and
do not be afraid to sound out ideas.
Who do you most admire and why?
Actually, my husband, Stuart Senior,
Managing Partner of Gleeds. He left
school at 16 and now runs the firm he
went to work for. He comes at business
problems and challenges head on, is
extremely astute and never gets phased
by anything. Great mentor and adviser.
What is your top motivational tip?
Be self aware and believe you can do it!
What is your dream job?
I’m doing it!
Are you an early bird or a night owl?
Early bird for work, night owl for play
Outside of business, what is the most
important thing in your life?
Family, without a doubt. Husband Stuart,
son Ryan and daughter, Caolan
14
April/May ’07 business comment Edinburgh Chamber of Commerce

NEWS ● NEWS
Opportunities through fresh
talent initiative
The Executive’s Fresh Talent initiative encourages people from non-EU countries to
consider coming to live and work in Scotland. Scotland is actively seeking a flow of Fresh
Talent to flourish alongside native-born Scots and secure its place as an essential part of
the global economy. Edinburgh Chamber of Commerce has been working with
Edinburgh’s Telford College to promote this initiative.
By Roger Horam
More than 1,500 foreign students were
given permission to remain in Scotland
in the first seven months of the visa
extension scheme.
The Working In Scotland initiative
allows international students to stay in
the country for two years after
completing their studies without
requiring a work permit.
Employing workers and students
from overseas can offer businesses in
Scotland many benefits, including –
● new skills
● routes into international markets
● increased ability to compete in the
global marketplace
● a diverse and culturally-rich work
environment
In Edinburgh there are hundreds of
international students, many of whom
are keen to stay in and eventually
settle here. They are taking a wide
range of courses from Hospitality
Management, to Design, to Dental
Technology. Many work part-time while
they are studying and some also do
work experience as part of their
course.
At Edinburgh’s Telford College,
Scottish businesses need fresh talent
students can also take a Higher
National Diploma course with
internship in some subjects for
example Hospitality Management.
Students study for one year at College,
then do a year of work experience with
an employer, then return to College for
another year to complete their
qualification. In this way the students
learn about working in Edinburgh and
To find out more about Fresh Talent and how it can
benefit you, why not come to Edinburgh’s Telford
College on Wednesday 23 May.
the employers can see how they fit into
the organisation with a view to taking
them on when they complete their
course.
To find out more about Fresh Talent
and how it can benefit you, why not
come to Edinburgh’s Telford College
on Wednesday 23 May where there will
be an opportunity to network with
others and talk to college staff over
drinks and nibbles from 5.45pm, then
a short presentation at 6.30pm.
For further details please contact
Carole Redpath, Assistant Head of
School carole.redpath@ed-coll.ac.uk
or Roger Horam roger.horam@
edinburghchamber.co.uk
Edinburgh Chamber of Commerce business comment April/May ’07 15

NEWS ● NEWS
Why Scotland’s cities
The painful closure of NCR’s Dundee plant- brought to its
employees live by video from the United Statesrepresents
something of a ‘final written warning’ for the
Scottish economy.
By Graham Birse
Traditional drivers of inward investmenta
skilled labour force, rent free
accommodation and other financial
sweeteners- are insufficient to compete
with the low costs and developing skills
of markets in Eastern Europe, Asia or
South America. Clearly, the formula
which sustained Scotland’s new towns
and cities in the 70’s and 80’s is no
longer fit for purpose.
To be fair, economists, academics,
development agencies and Ministers
have long recognised that Smart
Successful Scotland is not going to be
built on the back of inward investment
from global corporations. Instead, we
must focus on indigenous business
growth, creativity, leading edge
research and our attractiveness as a
location to live, work and invest. There
are plenty of examples around
Scotland- including Dundee- of
companies whose skill and ingenuity
“...the future of the Scottish
economy depends upon
metropolitan regions in
which R&D investment is
focussed on innovation in
key industry sectors.”
will help create and sustain the ‘high
value added’ jobs of the future.
Moreover, reports of the death of
manufacturing in Scotland have been
grossly exaggerated. Of course, the
decline of our traditional industries and
the re-location of component assembly
tasks to other parts of the world is
bound to show in the statistics. But
there are plenty of manufacturers- in
food, drink and agribusiness, in
technology and creative design who are
growing in confidence and have plenty
of ambition for further expansion.
Take Edinburgh, for example, where
financial services is king. After all, it’s a
sector which contributes a massive £5
billion and 6% of Scotland’s GDP, in
which the average annual salary now
tops £50k.
However, scenario planners have also
highlighted the risk associated with
exposure to one or two sectors alone.
In short, a mixed economy is a much
better insurance policy against future
downturns in financial services or
tourism.
Let me give you two examples.
Employing 2,000 people at their Crew
Toll site, Selex SAS (Sensors and
Airborne Systems) are not exactly new
kids on the block in Edinburgh. Their
heritage dates back to 1944 when the
old Ferranti Company began making
gun sites for the legendary Spitfire
aircraft. Today they are part of the
Finmeccanica Group and are proud to
have produced the radar systems for
every front line British aircraft since the
1950s.
Selex SAS’ latest breakthrough is
AESA (Active Electronically Scanned
Array), which revolutionises the quality
and reliability of radar systems, securing
the company more than $30m worth of
contracts worldwide. The implications of
further growth for a company with an
annual wage bill of £80m, spending
£15m annually with Scottish suppliers
and supporting a further 350 jobs locally
are therefore obvious.
With the average salary at Selex SAS
of more than £30k, 1300 of its 2,000
employees are degree level qualified,
therefore exactly the quality of
opportunity we are seeking to create in
Smart, Successful Scotland.
Meanwhile, across the city, the
Wolfson story has unfolded over the
past 20 years. Spun out from Edinburgh
University in 1985, founders David Milne
and Jim Reid originally established the
company as a design house for silicon
chip manufacturers. After several
incarnations, a business model
emerged which has proved both
durable and successful, involving the
design of a semiconductors with
particular qualities and demonstrating
these features in a working model to
potential manufacturers.
In this way, Wolfson was selected by
Microsoft to supply an audio product for
its original X Box games platform and,
later, by Apple for its first generation
iPod, establishing a worldwide
reputation for quality and innovation as a
designer of leading edge semiconductor
technologies. Wolfson are now
represented in 11 countries and employ
16
April/May ’07 business comment Edinburgh Chamber of Commerce

NEWS ● NEWS
need to sell
Edinburgh needs to promote itself
Cities like Barcelona (pictured above) are investing millions in marketing
themselves
330 people, 250 of them in Edinburgh.
What do these two companies have
in common? Well, apart from success,
they have both experienced difficulty
recruiting the experienced specialist
staff from other locations in the UK and
Europe. Essentially, they say,
Edinburgh needs stronger marketing to
present its manifest appeal as an
attractive location to live, work and
invest.
Meanwhile, Scottish Enterprise has
concluded that the future of the Scottish
economy depends upon metropolitan
regions in which R&D investment is
focussed on innovation in key industry
sectors. It is in this way, they argue,
that we shall create the high value
added jobs that are necessary to
support growth in the Scottish
economy.
No one in Scotland argues with this
economic home truth. For the Scottish
economy to prosper, its cities have to
prosper; and nowhere is this more
significant than in the capital city. Yet
when it comes to the application of
economic development strategy and
business support, we persist with the
notion that they way forward is to hand
out equal dollops of public money to
the maximum number of geographical
and political constituencies.
Take non domestic rates, for
example. In the last 10 years,
Edinburgh has contributed £800 million
in non domestic rates income to
projects elsewhere in Scotland, £111
million of it in the last year alone. This
‘leakage’ of what is, in effect, a local tax
on business, isn’t just damaging the
capital city, but its potential to grow as a
metropolitan region, supporting the high
value added jobs that draw young
professionals into the city from far and
wide.
Cities like Manchester, Dublin,
Barcelona and Amsterdam suffer from
no such constraints. They are currently
investing millions in marketing
themselves and, in Manchester’s case,
buying up our talent to replicate what
Edinburgh has to offer.
The definition of marketing, according
to the Chartered Institute of Marketing,
is: “The management process of
anticipating, identifying and satisfying
customer requirements profitably.” I
prefer the simpler explanation from Al
Ries and Jack Trout. Marketing, they
say, is “war between competitors.” And
in a global economy shaped by
metropolitan regions, this is as true of
cities as it is of products and services.
So why is there no marketing agency
for Edinburgh, Scotland’s economic
gateway and capital city? As global
competition for inward investors,
students, professionals, visitors and
businesses intensifies, should we not
be shouting long and loud about the
unique qualities and attributes of a great
city?
The 2006 European Cities Monitor
from Cushman and Wakefield ranks 36
cities in order of ‘doing the most to
actually improve themselves’.
Barcelona is number one, Tallin is 36th
and Edinburgh doesn’t register. At the
UK level, Manchester is ranked number
one, Birmingham second, Glasgow
sixth and Edinburgh 11th, just ahead of
Nottingham, Reading and Belfast.
Companies of the calibre of Wolfson
and Selex are entitled to expect more
as they compete in global markets to
attract talent. The case for a marketing
organisation for Edinburgh which unifies
its inward investment, tourism, festivals,
events, conferencing and education
promotion under the stylish ‘Inspiring
Capital’ brand is compelling; and its
arrival long overdue.
Edinburgh Chamber of Commerce business comment April/May ’07 17

NEWS ● NEWS
SECONDS
Name:
Brendan Johnstone
Website:
www.fourthcraw.com
Q What is your company name?
A The Fourth Craw.
Q In five words or less, what do
you do?
A Print and web design consultant.
Q How long have you been a
Chamber member?
A 18 months.
Q Why did you join?
A The chamber offers a valuable
source of business support, which
is crucial to new business. And it
seemed like there would be plenty
of networking opportunities –
which has proven to be true!
Q What services do you use?
A I attend a lot of networking events,
and use the member’s hub for the
occasional meeting. Many of my
suppliers are sourced through
Chamber Connect.
Q What’s the best business/benefit
you have won through the
Chamber?
A We secured a £10,000 a year
design and print contract with a
Financial Services company.
Q If you were telling another business
person about the Chamber, what’s
the first thing you would say?
A Join up!
Q Where do you read your copy of
Business Comment?
A At my desk during my lunch break.
Want to do more business
with the Council?
Companies, large and small, national and local, can now sell
goods and services to the City of Edinburgh Council, more
easily, thanks to a new website launched in February 2007.
Businesses who wish to
sell to the City of
Edinburgh Council can
search the website to
find what goods and
services the Council is
currently tendering for.
Suppliers can then
register their interest by
email. Once this is
done, they can use the
Council’s internal
financial systems and
submit all the contract
information electronically instead of
sending bulky paper documents
through the post. It will save time and
money for suppliers as well as the
Council.
Councillor Maureen Child, Executive
Member for Finance and
Sustainability:
“Unlocking the potential of
procurement is one of the most effective
ways we can drive efficiency savings
and meet government targets. The site
is a modern and practical step to
providing timely information and costeffective
services.
“However, it is not just about streamlining
procedures. It is also about
making our contract procedures fair and
transparent so it is easier for local and
Europe-wide companies, as well as
social enterprises, to become involved in
selling to the Council.
There is also a section to help
suppliers find information and answers
to questions on procurement. It explains
legislative and internal procedures on
selling to the Council in a clear, friendly
manner.”
The initiative has also been endorsed
by the Edinburgh Chamber of
Commerce.
Graham Birse, Deputy Chief Executive
of Edinburgh Chamber of Commerce,
said:
“Public sector contracts are a vital
element of the Edinburgh economy. Too
often, small local businesses can be
deterred by the processes and imagine
that contracts will go to larger
companies outside Edinburgh, or even
Scotland.
“In fact, 51% of contracts let go to
local firms- and the Council have set a
target to increase this still further.
Therefore, we welcome the new
procurement website as a step in the
right direction, simplifying the process
and encouraging more local businesses
to submit bids for contracts. This is
good news for SMEs and good news for
the local economy.”
For additional information about
selling to the Council and the Supplier
Exchange, visit the website:
www.supplierexchange.org.uk
Do you want to learn how to do more
business with the council? If so, keep
your eyes out for further information on
a procurement event being held in
conjunction with the City of Edinburgh
Council. Details will be posted on our
website www.edinburghchamber.co.uk
in April.
18
April/May ’07 business comment Edinburgh Chamber of Commerce

CHAMBER ● BENEFITS
Have you used your Connect Card yet?
Little card, huge savings…
Members will have recently
received their new 2007
Chamber Connect Card – a
fantastic tool for business
which opens up a wide range
of discounts both locally and
nationally.
Launched in August 2005, Chamber Connect
prompted a tremendous response from member
companies keen to provide fellow members with
access to their products and services, and the
network of offers has continued to grow, now
reaching over 80 suppliers.
The important feature to remember is that the
Connect card is not only for named Chamber
contacts but for all employees of member companies, making
the potential for savings of real significance.
Our local discounts directory at
www.edinburghchamber.co.uk makes it easy to access
discounted offers of over 20% or more and our offers range
from discounted hotel accommodation to graphic design
services.
On a national level the Connect offering is being continually
enhanced so remember to register your card at
www.chamberconnect.info and keep your eye out for new
promotions. Later this year, a range of lifestyle benefits for
employees will be introduced where employees will benefit
from discounted rates on a large range of leading supplies
including Lifestyle, Sport & Fitness, Home & Garden etc.
So we’re certain you’ll find an offer that is valuable to both
your business and personal needs!
Alan Gorrie, Chamber member and Director of Peni Deli Ltd
in Penicuik regularly uses his Connect Card:
“I find the Connect Card of great benefit. All of my 11 staff
use their cards on a regular basis to get discounted goods
and services. It’s also a good incentive to retain staff as it’s an
excellent business perk and of real practical benefit to my
employees. We use the card for a range of business and
personal benefits, from purchasing IT Services to going out for
a great meal in Edinburgh.”
No matter where your business takes you, your Chamber
Connect Membership Card will make life easier! So if you
haven’t already taken advantage of the savings available, why
not start now?
To offer a Chamber Connect discount or to request a card
please contact Lynn Mackay on 0131 221 2976.
Capscan (Scotland) Ltd
Formed in 1985, we are an
independent family-owned printing
company based in Midlothian. Since
our beginnings as a pre-press
company, we have evolved into a
respected print house capable of
handling a variety of work. We can
take your job from design to delivery,
be it for litho or digital print. We also
offer scanning and image retouching
services so that all work can be
carried out under one roof.
Our attention to detail, personal
service and being at the forefront of
new technology enable us to deliver
the high level of service and quality
required for print production in today’s
markets. At Capscan all jobs are
treated with a personal touch, we feel
that customer service is a priority and
that is why you will always be assured
a quick response to any queries you
may have.
We would be delighted to offer
Chamber members a 10% discount.
For more information please call
0131 440 9727 or visit www.capitalscanning.co.uk
Edinburgh Chamber of Commerce business comment April/May’07 19

INFORMATION ● TECHNOLOGY
Is your business software ready
for the changes in?
Changes in legislation and standards that are being enforced during 2007 will be the main
challenges facing organisations that rely on their business software in the coming year.
Some of the legislation being introduced is vertical, or tax
related to specific types of goods, while another introduction
is a BSI Kite mark for VAT software that can mean less
frequent HMRC inspections. Added to more online filing
opportunities, there is a lot to consider for organisations in
2007 in terms of accounts and financials processing that
can be handled by the right accounting and business
software.
It may be that many organisations will need to upgrade or
even change their business software to meet with the
demands of new legislation or to take advantage of new
initiatives to save time and money in the production of, or
submission of, their financial activities. Some of the changes
in 2007 should not be underestimated in their impact – the
new Reverse Charge VAT rules for example are arguably
the most significant changes in 14 years, while the new
Construction Industry Scheme requirements are not just
relevant to the Construction industry but for any organisation
employing sub-contractors on projects of more than £1m.
So what exactly is happening in 2007 – and what is the
impact?
VAT The introduction of Reverse Charge
HMRC’s current proposal for Reverse Charge relates to a
specific range of goods including mobile phones, computer
chips, memory sticks and MP3 players i.e. high value / low
weight & size items. When these are sold between
businesses then VAT will be subject to Reverse Charge.
In the short term manual work-arounds are being allowed
by HMRC but in the long term business software providers
will be incorporating the requirement so that users will be
able to manage Reverse Charge automatically. If your
organisation deals with any of the goods that Reverse
Charge applies to it would make sense to upgrade your
business software accordingly or switch to a supplier that
includes the functionality.
CIS (Construction Industry Scheme)
The new HMRC ‘Construction Industry Scheme’ (CIS)
actually applies not only to Contractors in the construction
industry but any other organisation that employs subcontractors
- for example Local Councils, Corporations etc
that have contracts for more than £1m.
The reform of CIS commences in April 2007. Historically
CIS has been associated with Payroll systems, but the new
requirements are more related to an Accounts Payable than
Payroll and so any organisation that deals with
subcontractors must ensure their business software can
handle the new CIS.
ONLINE FILING
VAT, PAYE, and Companies House all now offer online
filing, some are mandatory and others optional (but with
incentives). Not only does online filing typically offer a
simplified, and more secure way to submit necessary
financial information but it is increasingly becoming the only
way certain information can be supplied to authorities. This
trend is going to continue, so make sure your business
software can handle these requirements for online filing to
save time now, and comply later.
PAS 76 Accounting Software VAT ‘kite mark’
The PAS 76 ‘Kite Mark’ was officially launched in July
2006. HMRC now plans to extend the current PAS 76 to
include Reverse Charge and eVAT filing. With these
additions PAS 76 will have real value for end users in the
form of benefits such as fewer HMRC inspections.
Even if just one of these legislations or standards affects
your organisation (and it’s likely that at least one of them will
impact or could benefit every organisation) then you need to
consider whether your current business software can handle
them, needs to be upgraded, or replaced.
And looking beyond 2007 you need to make sure your
business software is future proof. HMRC, as an example, is
looking to make ongoing changes that will need to be
accommodated in business software – so its important to
consider the upgrade paths and agreements you have (and
how easily these are implemented) with your current
provider as remaining on the same version or system may
become increasingly less sensible or possible.
CONTINUED ON PAGE 22
20
April/May ’07 business comment Edinburgh Chamber of Commerce

INFORMATION ● TECHNOLOGY
Equipping your teams
for change
Change is an inevitable part of business and getting it right means the difference
between a successful business and an unhappy one. Changes normally happen as part
of a project, and successful projects are normally led by project managers. Successful
project managers are people who are experts in leading an initiative from the start,
through the awkward bit in the middle and wrapping it up nicely at the end.
Elizabeth Harrin
SENIOR PROJECT MANAGER
Even if you don’t have full time project
managers, you probably have
someone in your organisation who
you turn to when you need to deliver
or change something. Research has
shown that the better equipped that person is, the better the
outcome for your project. That goes for the rest of the
organisation too – a company with a mature approach to
project management will have better results than one just
starting out.
However, if you are just starting out, you probably don’t
want to wait while your company builds up expertise by trial
and error. So what are the skills a successful project
manager needs and how do you get them?
There is no mystery to being a good project manager. It’s
just a blend of good technical ability and great interpersonal
skills, and those can be developed both through training
and practical experience.
Project management, like any profession, has its own
jargon, processes and methods. There are organisations
like the Association for Project Management that accredit
project managers in these technical aspects but there are
lots of short courses that offer a good starting point. A
training provider can even tailor their courses to your
specific needs and focus on the areas where your project
managers really need support. At the end of the course the
delegates should have an idea about how to set up a
project and manage it professionally. There are also lots of
books available on the subject that can be used as support
materials during and after a course.
Some providers also run training courses for the other
people involved as project managers don’t do all the work
themselves. They co-ordinate a team, usually a group of
experts in their individual subjects. The project manager’s
role is to ensure that they all work together to deliver
whatever it is the project is supposed to do, within the
FROM PAGE 20
If you currently run industry specific, vertical or bespoke
business software you need to make sure that it can
accommodate all the legislation and regulation changes.
It will be more important than ever to have modern,
flexible business software in 2007 and beyond and if your
current system doesn’t fit this description then now is the
time to upgrade or change it.
For more information about any of the legislation and
standards mentioned please visit the BASDA website where
there are articles, news, white papers and reports available
to read and download. BASDA also publishes an
independent guide to ‘Selecting a Business System –
Selecting a Reseller’ available to download from the
website. www.basda.org
22
April/May ’07 business comment Edinburgh Chamber of Commerce

INFORMATION ● TECHNOLOGY
parameters set by senior management: typically a specific
budget and timeframe.
Technical training on how to run a project is only half the
story. Project managers have to be able to work with people
of all levels, from the Sales Director who sets out the
strategic direction to the IT developer who builds the thing or
the Customer Service agent who has to use it. Project
managers should be individuals with attention to detail,
good people skills and the drive to get things done. They
should be able to negotiate, unblock sticky situations and
be confident enough to present progress reports to the
Board. These skills are harder to learn in the classroom, but
you can help your project managers develop by pairing
them up with someone more experienced in a mentoring
programme or offering tailored practical training in soft skills.
Investing time in supporting the development of your
project managers will pay dividends. You’ll find the changes
your company implements will happen more easily and with
fewer headaches for everyone concerned. Check out the
box for some more tips for success!
Make your project a success
● Firstly, is it really a project? Projects have a beginning,
middle and end. If it’s operational or ongoing it’s not a
project.
● Make sure the project is supported at the highest level. If
there is no senior sponsorship, people will be dragged off
to work on other, more important, things. And if the senior
team isn’t convinced by it, why are you doing it?
● Communicate, communicate, communicate. At the
beginning everyone will be really positive and interested
but it’s hard work to keep that level of energy and
commitment all the way through. Relevant, timely
communication is essential.
● Think carefully about who to involve. You can’t consult
everyone who will be affected by the change but you can
ask each area to nominate a representative to be part of
the project team. It’s better to find out sooner rather than
later what impact your project will have on each
department.
● When the project is over, organise a launch event or party
to thank everyone involved for their hard work and
celebrate the successful implementation!
PROFILE
Elizabeth Harrin is a senior project manager in the
financial services sector and author of Project
Management in the Real World from the BCS. A
member of the British Computer Society, she lives
and works in Paris, France.
Edinburgh Chamber of Commerce business comment April/May ’07 23

PROPERTY ● PROPERTY
Guide to buying
commercial property
By Charles Smailes
CHAIRMAN OF THE INSTITUTION OF
COMMERCIAL BUSINESS AGENTS
Commercial property in the
UK has for a long time been
considered a shrewd
investment choice, particularly
when included as part of a
wider portfolio. The market has
been booming over the last
year as awareness of the
benefits of commercial
property investment has
increased. The launch of the government’s new Real Estate
Investment Trusts (REITS) initiative in particular has helped
raise the profile of the sector. While aspects of the
commercial buying process are similar to that of residential,
there are many technical aspects to consider. This makes
commercial property purchasing a very different prospect.
When it comes to ascertaining a fair price, the valuation
process for commercial property varies greatly from its
residential counterpart. All of the elements taken into
consideration in the residential market, such as the average
regional prices and the market value of similar houses in the
area, do not apply in the commercial market. Calculating
commercial property value is, in fact, far more scientific.
While considerably more factors need to be taken into
account, the information used is far more robust. This is
good news when it comes to getting an accurate picture of
a potential investment opportunity.
Most surveyors and agents will value a business premises
by rental values, which fluctuate a great deal less than
residential property prices and therefore are slightly easier
and more accurate to work with. By using these rental
values, the rate per square foot can be easily established
from the agent’s own records. For example, to establish the
value of a factory unit for sale as vacant possession you
would calculate the annual rental value per square foot of
the unit and then multiply that
value by the area of the factory.
This leaves you with the total
rental value per annum. You
then capitalise that pure rental
value on a year’s purchase
basis to establish its actual
market value.
If the property has a tenant in
situ and is subject to lease there
is far more to take into account.
The return you could potentially make if you purchase
subject to lease will need to be considered. To establish a
value, the first thing to assess is the quality of the tenant. If
the tenant is a large multinational company, for example –
which will be likely to fall under a Grade A covenant – they
are unlikely to suffer financial problems that would hinder
them from paying their rent on time and in full. It is also
expected that a large, reputable company will maintain all of
their obligations under the lease. If the tenant is deemed to
be less than a Grade A, then evidence will be required as to
their conduct whilst occupying the premises. Have they
been timely in paying their rent? Have they maintained the
property to a satisfactory standard?
Once the quality of the tenant has been established, the
length of the lease needs to be considered. If there is a
considerable amount of time left on a Grade A covenant
tenant, and regular rent reviews in the lease – which will
provide opportunity to increase the rent – the premises
could be a fantastic investment opportunity in the long term.
Once you have chosen your property and the sale has
been agreed the process is largely the same as in the
residential market. The deal will be subject to contract and a
conveyancer is required to take care of the legalities.
With so many calculations and factors to take into
account when purchasing commercial property, it is
imperative that as a business owner or investor you seek
expert advice. Choosing an agent and/or surveyor who is a
member of a body such as the Institution of Commercial
Business Agents will ensure that you are dealing with an
experienced professional.
24
April/May ’07 business comment Edinburgh Chamber of Commerce

PROPERTY ● PROPERTY
The Evolving Office Products Industry
Marisa Monreale
MARKETING COMMUNICATIONS
MANAGER, BOSS FEDERATION
Looking back at the past twenty years there
have been some significant changes to the
office products industry. One of the major impacts has
been the evolution, availability and affordability of computers
and other electronic systems. From the advancement of
computers to the introduction and uptake of the internet, this
has made it easier for people to communicate.
Over the years, there has been a vast increase in the use
and purchase of Electronic Office Supplies (EOS). With the
advancement of technology, this has forced manufacturers
to modify and extend their product lines accordingly.
In additional to the “basics”, manufacturers have also
introduced numerous accessories i.e. mouse mats, rewriteable
CDs, memory sticks etc. Their product lines are
constantly being reviewed and modified to help develop a
better and safer working environment.
Suppliers are now also making their clients aware of the
problems caused by continualy using certain electrical
equiptment on an ongoing basis. There are numerous
injuries which slowly develop over a longer period of time
caused by the continual use of a keyboard, mouse and
Visual Display Unit on a daily basis. These injuries include
cramps in your hands, headaches and backaches.
There is now a greater awareness of how to prevent these
injuries. Most organisations will have health and safety
information available to employees detailing how to position
a workstation to ensure that whilst you are working your
seat is at the right level to eliminate additional pull on your
neck and back. Computer screens should be set to the right
brightness and font size, helping to protect your eyes from
straining and keyboards need to be at the right reachable
distance to avoid stretching for long periods of time.
A few of the most common injuries are Repetitive Strain
Injury (RSI), Carpal Tunnel Syndrome (CTS), Tendonitis, De
Quervain's tenosynovitis
Over the years, manufacturers have produced innovative
desk accessories that serve the additional purpose of taking
the strain from certain joints and muscles, for example Gel
filled mouse mats and wrist rests, A footrest and Screen
Filters.
For further information visit: www.bossfederation.co.uk
Edinburgh Chamber of Commerce business comment April/May ’07 25

FINANCE ● FINANCE
Inertia and Simplification
Mark Hale
ICA DIRECTOR
In his final Budget Gordon
Brown was at his obfuscating
best by announcing headline
grabbing reductions in income
tax and corporation tax, whilst,
as always for the Chancellor
the devil was in the detail
contained in the Red Book.
Here at the Institute of Chartered Accountants (ICA) we
believe the Chancellor has ignored the requests of business
and of professionals. A 2% cut in corporation tax is a step
forward, but it should be implemented now not in 12
months.
Also, by failing to do something about our overcomplicated
tax system and with the other changes
particularly for smaller businesses, the Chancellor has
missed an opportunity to ease the regulatory burden.
In its budget submission to HM Treasury, the ICA called
for a reduction in corporation tax and a formal commitment
to tax simplification that will help improve the UK’s
competitiveness within the global economy. The budget
submission also urged Government to improve the tax
credits for small business research & development.
Whilst we welcome many of the specific measures that
the chancellor has announced it’s still a piecemeal budget
which tinkers with the system rather than starting the
comprehensive reform which is so overdue. The challenge
“...whilst we broadly welcome many of the
measures in his budget, such as the
corporation tax cut we remain cautious
over the overall effect on businesses...”
for his successor will be to reform as much as to be
prudent.
So what about the detail? With regard to the changes for
capital allowances we feel that Businesses will pay for the
cut in corporation tax by changes to the capital allowance
CONTINUED ON PAGE 28
ADVERTISEMENT FEATURE
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CONTINUED ON FACING PAGE
26
April/May ’07 business comment Edinburgh Chamber of Commerce

FINANCE ● FINANCE
ADVERTISEMENT FEATURE
Small or medium sized business continued
of their property (100% with additional security).
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Edinburgh Chamber of Commerce business comment April/May ’07 27

FINANCE ● FINANCE
Inertia and Simplification
CONTINUED FROM PAGE 26
rules. Whilst we welcome the proposals to simplify the
capital allowance systems, the overall effect will be to raise
costs for businesses rather than reduce them.
Further to that in the case of the alignment of NI and
Income tax we believe that the objective of any alignment
needs to be to reduce administration costs for businesses.
This can be best achieved by alignment of rules for national
insurance with PAYE rather than with income tax thresholds.
At best, this is a ‘half-way house’ measure for business as it
looks as if other differences between the two will still
continue. Simplification of the system should not be revenue
raising by the back door.
Further to that, in terms of tax simplification the ICA is still
concerned that the volume of UK tax legislation has doubled
in the last ten years and has added considerable complexity
to the system. We believe that reducing complexity will
lead to increased competitiveness and therefore this is a
missed opportunity for government to help businesses of all
sizes.
There is of course the good news concerning R&D credits
and as we believe that innovation is critical to the future
“The criteria for identifying expenditure that
qualifies as R&D needs to be simplified,
particularly for those seeking lower levels
of tax credit. .”
success of UK business and productivity growth, then the
announcement that the Chancellor is extending R&D tax
credits to companies with fewer than 500 employees and
“We are pleased to see that the
Government has listened to some of the
concerns we have raised, in particular the
raising of the de minimis threshold...”
Gordon Brown
increasing the level of credit are both to be welcomed.
Yet, as our own research shows, the scheme as it is
implemented is not incentivising companies to invest in R&D
and needs reforming. Boosting R&D tax credits will give
more firms the opportunity to invest in R&D but companies
need to know if government will help before they invest. The
criteria for identifying expenditure that qualifies as R&D
needs to be simplified, particularly for those seeking lower
levels of tax credit. We believe that an optional pre-approval
process should be developed with the ability for companies
to receive the funds in advance.
Finally, in relation to MTIC fraud, or as it is better known
Carousel fraud, the ICA has consistently emphasised the
need for concerted action in this area. We are pleased to
see that the Government has listened to some of the
concerns we have raised, in particular the raising of the de
minimis threshold from £1,000 per month to £5,000 per
transaction, which will go most of the way towards keeping
business costs in check. However, there remains the ever
present threat that the fraud will merely move to other
goods. We are convinced that the long-term solution is for
concerted action at the EU to amend the current VAT rules
so as to minimise the opportunities for this type of fraud.
So overall, whilst we broadly welcome many of the
measures in his budget, such as the corporation tax cut we
remain cautious over the overall effect on businesses and
we feel that there still could be more that can be done to
make Britain a more competitive economy for business
success.
28
April/May ’07 business comment Edinburgh Chamber of Commerce

LEGAL ● LEGAL
Radical reform
Joyce Cullen
CONVENER, EMPLOYMENT LAW COMMITTEE
THE LAW SOCIETY OF SCOTLAND
The government has signalled its
commitment to family friendly working with
a range of new measures since 1997.
Businesses and employees are still learning
to adapt to those changes. But the process
of reform is far from over – a reality that will no doubt
provoke a mixed reaction from parents and employers.
The first raft of changes had been well publicised in the
Labour Party’s pre-election manifesto and were brought in
during the Government’s first term of office. They included:
extending paid maternity leave to 26 weeks; increasing rates
of maternity pay; a new right to two weeks paid paternity
leave; and, the right to request flexible working for parents of
children under six, or with a disability.
Then, on October 1, 2006, the first regulations under the
Work and Families Act 2006 came into force. The headline
provision was to extend from six to nine months, for all
women regardless of length of service, the eligibility period
for statutory maternity pay, maternity allowance and statutory
adoption pay. It applies to women with babies due on or
after 1 April 2007, or adoption placements after that date.
The Government estimates that around 400,000 mothers a
year will benefit. Up to 10 “Keeping in Touch” days were also
introduced to allow mothers to go into work or training to
keep in touch with developments without ending their
maternity leave or impacting on their maternity pay. The
hope was this would assist both employees and employers
by encouraging a smooth return to work at the end of a
lengthy period.
The Government said business had been consulted and
pointed out that a number of measures were intended to
benefit employers – helping them “plan ahead and manage
maternity leave with greater certainty” – as well as
employees. That rationale applied to doubling the notice
required for women to change their return to work dates and
simplifying the administration of maternity and paternity
payments.
But Ministers made it clear at the time that more was to
follow, and the aim during the parliamentary term was to
introduce a 12-month paid maternity leave period. There
would be further increases in the rights of fathers too, with
up to 26 weeks paid paternity leave, where the mother
returns to work before the end of her maternity period. In
other words, a father may soon be entitled to take up the
unused part of his partner’s maternity leave.
This radical reform, taken along with existing and new
flexible working provisions, will undoubtedly be welcomed by
families. It may also encourage both men and women to
spend more time with their children in the early months.
However, the rapid rate and extent of change has caused
concern among some employers and the proposed
extension of paid maternity and paternity leave is likely to be
a source of real consternation. A recent survey by
CIPD/KPMG found that 64% of employers think the
proposed paternity provisions will cause “some” or
“significant” problems.
The most enlightened employers may recognise the
potential benefits of having a fulfilled and happy workforce,
in terms of both recruitment and retention of the best talent
from the widest pool, and embrace the changes. In addition,
the benefits of a flexible workforce may come to be
recognised – as they are at my own Edinburgh and
Glasgow-based law firm, Brodies – as an opportunity to
grow the talent pool incrementally. This can happen when an
additional full-time member of staff is taken on during a
period of maternity leave and retained when the existing
employee returns to work, possibly part-time.
But others are only now coming to terms with the impact
of the increase in paid maternity leave and will be worried
about the implications of employees – both male and female
– being out of the workplace for lengthy periods.
Notwithstanding the Government’s assurances about the
benefits of a simplified payments system, the administration
and cost involved in potentially having mothers and fathers
on paid leave for up to a year and six months respectively
are feared by many employers to be considerable. The
proposal that, within a family, the father will be able to take
up the unused portion of the mother’s maternity leave
creates a further headache. It is not clear how this would be
administered and what obligations might be placed on
employers to ensure the system was not abused. Would
they, for example, be expected to liaise with the employer of
their employee’s partner to arrange the sharing of paid
maternity/paternity leave? This and many other questions
remain unanswered and careful thought will have to be given
to the next raft of regulations under the Act.
The Society’s Employment Law Committee regularly
responds to consultations on proposed legislative changes,
taking into account the legal practicalities and the
implications for employers and employees. Likewise,
employment solicitors are continually monitoring changes in
the law to provide advice. It could hardly be a more
important matter to handle carefully and appropriately –
balancing the needs of the employer concerned at the cost
and inconvenience of losing a valuable member of staff for a
lengthy period with those of parents adapting to the
demands of juggling childcare and their careers.
Edinburgh Chamber of Commerce business comment April/May ’07 29

CORPORATE ● HOSPITALITY
Are you getting the best deal from
your corporate hospitality provider?
Before asking if we are getting the best deal from our corporate hospitality, there is a
more fundamental question to consider. Have we identified the right format of corporate
hospitality to deliver a positive impact to our business?
Whether our spend is in the hundreds or the thousands, we
should treat corporate hospitality like any other marketing
activity, and apply a strategic approach to its planning.
Whereas the traditional starting point for planning
corporate hospitality used to be to enquire the company
chairman’s favourite sporting event; serious marketers
nowadays start with a blank page and ask the three big
questions: What are my precise objectives from this
activity? Who are my audience? And what will maximise my
chances of achieving a successful outcome?
Why do these questions matter? Because you will
increase the number of ‘Yes’ responses to your invitation if
you have offered an event that is likely to delight your
guests. And you will improve the chances of achieving your
business objectives if you build into your planning some
opportunities to communicate key messages to your
invitees.
“Sporting hospitality presents a bumper
selection for 2007, with the new
grandstand at Ascot, the major rebuild of
the South Stand at Twickenham and the
long-awaited opening of the new Wembley
Stadium.“
Izania Downie (left), Executive Director
of Eventia – the representative body for
companies providing business solutions
through events – says: “Tastes vary
enormously even amongst the same
group of invitees. One person will be
wowed by a night at the opera, another
would be thrilled to ride in a hot air balloon. While some
cherish a lifelong dream to go to the World Cup, there are
others whose work-life balance is so stretched, that the offer
of a weekend family fun-day with their kids would be the
single invitation that made it into their diary.”
Since it is clearly impossible to please all of your client
Artist’s impression of the new Wembley Stadium
contacts with one and the same event, why not consider a
range of hospitality opportunities on different dates and
match them to your range of guest profiles? Here are just a
few ideas:
Sporting hospitality presents a bumper selection for 2007,
with the new grandstand at Ascot, the major rebuild of the
South Stand at Twickenham and the long-awaited opening
of the new Wembley Stadium. On the international scene,
the Rugby World Cup in France and the Cricket World Cup
in the West Indies, provide plenty of choice.
Musical entertainment options also abound. From the
Rolling Stones to Glyndebourne the selection ranges from
rock concerts to Opera, classical and jazz, indoor and
outdoor.
Participatory events are growing in popularity, with a wide
range of options, from driving days at a speedway circuit, to
attending a cooking academy with a celebrity chef. Winetasting,
chocolate making, learning to play polo - the choice
is endless.
Whatever the event, bear in mind those vital opportunities
to communicate your own key messages effectively and
memorably. To what extent can you stamp your own brand
on the experience? To really resonate with guests, the style
of the event should be consistent with the host
organisation’s business plan, vision and mission.
30
April/May ’07 business comment Edinburgh Chamber of Commerce

CORPORATE ● HOSPITALITY
“Since it is clearly impossible to please all
of your client contacts with one and the
same event, why not consider a range of
hospitality opportunities on different dates
and match them to your range of guest
profiles?”
This last factor has prompted some companies to
consider customised corporate entertainment. If you want
to immerse your guests in a total brand experience, there
are creative agencies that will find locations, transform
venues, source props, décor and entertainment, to produce
stunning themed activities that will leave guests in no doubt
as to who had invited them – and why.
So having decided on the hospitality event that you’d like
to host, how do you find a reputable and trustworthy
supplier? The Hollis Business Entertainment guide to
corporate hospitality is a useful annual directory containing
lists of suppliers. You should also check that any provider
you use is a member of trade body Eventia. The
Association’s website carries a list of approved providers -
Eventia vets all companies applying for membership to
determine their track record, seeking references from
previous clients.
Simon Gillespie, Managing Director of Cavendish
Hospitality, offers one final word of caution - be very wary of
cheap sporting hospitality packages from unknown
providers. Many unlucky hosts have discovered to their
great embarrassment that their tickets didn’t exist and their
ticket provider had disappeared overnight. If you have any
doubts, contact the venue or event organisers and ask them
to give you the name of their official hospitality supplier
Corporate hospitality and entertainment are a great way to
achieve face-to-face communication – when they are
undertaken carefully and thoughtfully. So don’t just look for
the ‘best deal’; focus on an event experience that will
genuinely assist in developing your business, and deliver a
positive impact to the bottom line.
FACT BOX:
Eventia – the association representing
companies that provide business solutions
through the use of events:
www.eventia.org.uk
Hollis Business Entertainment Guide 2007
www.businessentertainment.co.uk
Cavendish Hospitality: www.cavendishhospitality.co.uk
Corporate entertainment – there’s a type to suit all
Wonderful hats on race day
Great team building!
Edinburgh Chamber of Commerce business comment April/May ’07 31