Would a Lib-Lab coalition be good news for Scotland's financial sector?

The Scottish National Party suddenly has the chance to gain more clout in Westminster by getting involved in the new 'progressive coalition' mooted by Gordon Brown yesterday. Would this be beneficial for the financial sector north of the border?

The SNP's six MPs are being vociferously courted in the potential tie-up between the LibDems and Labour (along with other minority parties) in a bid to swing the coalition into a clear majority.

When it comes to the UK financial sector, one thing is for sure - the SNP isn't looking after the interests of the City. In its 2010 manifesto, it says that it supports plans for an international bank tax and "will support steps to limit bonus payments as part of wider regulatory reform that encourages a return to prudent banking".

Job retention and creation in Scotland is a key theme in the SNP's plans. However, within the banking sector - aside from its ongoing (and not very successful) campaign to save jobs in Bank of Scotland, and nods to the hundreds of jobs created at Tesco Bank and esure in Scotland - little is mentioned.

Anyway, despite the 84% governmental stake, political influence has done little to stem the flow of redundancies at Royal Bank of Scotland both north and south of the border.

Still, both SNP leader Alex Salmond finance minister John Swinney have a background in the Scottish financial sector, which will at least give them a good understanding of the issues affecting it.

The SNP also continues to make the case for the much-stalled Scottish Investment Bank, which could provide employment opportunities, possibly for private equity professionals, once it eventually gets going.

More interesting for the financial sector in Scotland is SNP's ongoing campaign for fiscal autonomy from the rest of the UK. Central to this is the ability to lower corporation tax, which it says will result in "higher levels of economic growth, more high-paid jobs and higher tax revenues".

Certainly, the lower corporation tax rate has been something of a shop window for attracting swathes of financial sector jobs to places like Ireland and Luxembourg, which have carved a niche for themselves as low-cost centres for fund administration and asset servicing.

Scotland is developing a reputation for back office expertise anyway, and is home to big international firms like State Street, Citi, JPMorgan and Morgan Stanley which have all been voluminous employers north of the border for some years now.

Aberdeen Asset Management's chief executive, Martin Gilbert, thinks Edinburgh is missing a trick here.

In an interview with The Times, he said: "At present, all European funds are based in either Dublin or Luxembourg for tax reasons. I think you could make it attractive for funds to be located in Edinburgh. Suddenly, you'd have a massive business there."