Murray demands action to help Scotland's businesses

SCOTLAND'S economy urgently requires significant interest rate cuts if it is to survive the coming recession, tycoon Sir David Murray has warned.

Murray demanded more help for Scotland's indigenous private businesses which he said would remain in the country in hard times, unlike multinational corporations which had the option of leaving.

The intervention of the entrepreneur – Scotland's sixth-richest man – came as he admitted that even he has been hit by the credit crunch, predicting an end to five years of profit growth for his Murray International Holdings (MIH) group.

Speaking as he unveiled his company's latest results, Murray said he believed business in Scotland would not be back "to normal" until 2011.

But in a message to the government and the Bank of England, he added: "We have to stop talking about interest cuts and get them into the economy.

"Unless we help private business there won't be a Scottish economy left. Multinationals can just go."

Murray maintained that family business like his and others were "here for the duration".

He continued: "We've tried to continue a legacy and unless more support is given to private business, we're not helping ourselves as an economy. "We don't go to shareholders with a rights issue – we need support. We need to get interest rates down and help business quickly."

His plea came as he revealed that pre-tax profits for MIH had more than doubled to £20.5 million in the year to the end of January, boosted by a strong performance at Murray Metals.

But the tycoon – who has an estimated personal fortune of £720m and whose business interests range from Rangers Football Club to metals – admitted that MIH was likely to report flat profit in the current financial year.

And he warned that will be combined with only a slight rise in turnover as the group suffers from a downturn in the commercial property market and invests cash in acquisitions in its metals business.

While 65 per cent of MIH's turnover comes from his lucrative metals business, commercial property firm PPG has been badly hit by the property downturn. Rangers Football Club this year increased its net debt by £5m to £21.5m.

In the latest set of accounts to be filed with Companies House, Murray said operating profits at MIH, the parent firm of his five divisions, had grown by 46 per cent to £42m.

He added that group turnover– 60 per cent generated from outside Scotland – had grown by a fifth to £542.4m.

He told The Scotsman: "We've obviously got notoriety through the football and the steel business, but our great strength is our diversification – that we're not reliant on one sector.

"We sell copper cable, make buses, have call centres, which is an advantage as we're clearly in a very difficult economic time."

He added that he was still on the acquisition trail at Murray Metals. He said: "Although we're going into a period of uncertainty, I see the buying price of these businesses falling."

Murray said MIH, which employs around 4,000 people, had a strong asset base and had its lending facilities in place with HBOS for the foreseeable future.