Business in Parliament Conference: First Minister's speech - 3 February 2023

Thank you very much, Presiding Officer, and let me add my welcome to the Presiding Officer’s to all of you for being here and joining us today for these really important discussions.

This is a very different perspective on at the Scottish Parliament chamber than the one I am used to, from my seat over there. It's a much nicer perspective I have to tell you, but I mean no disrespect to my colleagues, when I say that.

Thank you, Andy, for setting the scene for us so well, today and for being here with us. Please wish your Mum a happy birthday from all of us when you see her tomorrow.

When you spoke about Arnotts and Goldbergs and William Low’s, I felt as if you were taking me on a trip through my teenage years. What you had to say about retail, I thought was profoundly interesting. But also made me reflect, not just on the challenges for retail, but the way in which the challenges that retail is facing right now are reflected across the economy.

When I think back to my younger years and listening to Andy it crystallised in my mind just how important retail was, not as a means to an end, but actually in our lives more generally.

For me, the Rivergate Mall in Irvine was not just a place where we went to do essential shopping, not just a source of employment, but a meeting place. A social hub, a place of human interaction, and the challenges that the internet poses for retail that, as you say, must be faced up to, in a way that allows the value of retail to be preserved, and I don't just mean monetary value, those challenges but also opportunities are replicated elsewhere.

So I think your comments today, were extremely instructive and give us lots to think about over the course of these discussions this morning. So thank you for your contribution.

I'll maybe touch on all of the questions that were posed to Andy, as I go through my remarks this morning. I hope you will hear over the course of our discussions this morning, a real commitment to the private sector and a recognition that the country can’t succeed, Andy made this point very powerfully – the country can’t succeed and won't succeed without a thriving, growing, prosperous private sector.

And the relationship and the engagement, the collaboration, the joint working between the private and the public sector is essential to that and I hope you hear lots this morning that will reassure you.

Thank you for a one man applause – you might not want to applaud this next bit, but whether you like it or not, I'm about to invite myself to visit your business so that I can see for myself what you do and thank you in-person for the work you're doing.

An apprenticeship, trust me, as long as it’s a colour that suits I'm happy to wear a boiler suit. Anyway, I think I'm going to move on because this could become just a conversation between the two of us and I'm not sure I would prevail in that conversation.

The final point I would make for somebody who claims that – I'm stressing that word claims, to have no experience of public speaking, I think you could teach politicians a thing or two from what we heard earlier on. I'm going to move on now if it is okay.

But I think the interaction that we've already had this morning, I do think underlines just how important events like this are.

It's now almost 20 years since this Business in Parliament event was first established and it has lasted so long and I think thrived over the course of these years because it meets an enduring need, and we've already heard that expressed here this morning.

And that is for businesses to contribute perspectives, and insight, and at times challenge and criticism to legislators and policymakers.

Now, obviously, this isn't the only event that enables that to happen, but I think it is an extremely important one. And it's welcome that we've got MSPs from across all parties, I think here today, as well as me, I think we have six other government ministers here today to listen to the discussions and the challenge that will be posed, and obviously we've got representatives from a broad and very diverse array of businesses here too, and as Claire said in her opening remarks, it's really good to be back in person after an interval of three years, albeit joined online by others today.

And I think this event and the discussions that it enables is particularly important, right now. The theme of today's discussion, of course, is maximising opportunities for the next 10 years and it's important, particularly at times like this, and I'll come back to that in a second, but we do have opportunities to lift our eyes beyond the immediate day-to-day pressures and think about what kind of economy, and therefore what kind of country are we seeking to create in the years to come?

And the reason I say that is because I think it is important to address and to acknowledge first of all that for many businesses, if not for all businesses, across our economy right now, this is an exceptionally difficult time.

Costs are rising and they’re rising at a time when, because of the wider inflationary crisis, consumer confidence is also low, and of course we are still in a process of recovery from the biggest shock that most of us have experienced in our lifetimes in a global pandemic.

And earlier in the week, of course in a projection that was very much echoed yesterday by the Bank of England, the IMF forecast that, uniquely amongst developed countries, the UK economy is likely to shrink in 2023.

Now, there's many factors at play in that but of course, the situation has been exacerbated by impacts of Brexit, which include an issue that's already been touched on this morning, the constraints on the supply of labour, which is affecting virtually every sector, across our economy right now.

So that's the context in which we meet today. But I think it's really important that as we recognise and acknowledge that, that we do, lift our sights and lift our eyes, and that we are ambitious for the future, for taking advantage of the many opportunities we have.

It's incumbent on the Scottish Government to do everything we can to support businesses during this difficult period and to listen today to suggestions about what more we can do to support business.

Our budget for the coming financial year, went through the first stage of its legislative process yesterday led by the Deputy First Minister, and just as one example of the way in which we are seeking to support the private sector, in that budget is a commitment to freeze the poundage for business rates, which was the key request made by business organisations ahead of our budget.

That freeze will ensure that Scotland continues to have the lowest poundage rates in the UK and it's part of a package of business rates release that is worth almost three quarters of a billion pounds every year.

So that's just one of many examples of how we are seeking to support the private sector. But of course it is important that we continue to engage and listen and that together, we consider and work out the best ways in which to provide that support.

Of course, and I'm not particularly seeking to make a political point here, it's a statement of fact, we don't have in this Parliament access to the whole suite of fiscal levers that we would need to provide much fuller support.

So we also need to see action from the UK Government across a whole range of issues relevant to helping business now cope with the short term pressures, but also to help lay the foundation for the future.

But let me repeat because this is the focus of my remarks today. The job of my government is to use all of the powers we do have at our disposal to support businesses now and to maximise opportunities, going back to the theme of our discussion for the longer term.

It's almost a year now since we published the National Strategy for Economic Transformation. I don't have time, I'm sure it will relieve all of you to hear this, this morning, to talk about every aspect of that strategy, but I want to highlight three particular points in that strategy.

The first is that, and we heard Andy refer to this in his remarks already this morning – that wellbeing and fairness alongside productivity and economic dynamism is really important and that is very much at the heart of that strategy.

I think it is now widely and indeed increasingly acknowledged that these two things fairness, wellbeing and economic dynamism, productivity are not aims that are in contradiction to each other. In fact, they reinforce each other.

And in fact, that's not new thinking. Particularly in Scotland, we should reflect that was very much at the heart of much of the work of Adam Smith back in the mid-18th century. But it's thinking that is being reinvigorated now.

And that is why there is in our strategy for economic transformation, a strong emphasis on fair work, because we recognise that, as many businesses already do, that workers that are empowered and valued are more likely to contribute to the success and the productivity of the businesses that they work in.

So the strategy is intended to be a blueprint for stronger economy, but by creating a stronger economy, also a blueprint for a better society. And the second point I want to make is linked to that and that is about the importance of entrepreneurialism.

This chamber right now is full of entrepreneurs and innovators, and of course, that's something that Scotland's reputation down the ages has been very much founded on.

Entrepreneurialism, enterprise, innovation. Again, something that we need to reinvigorate and make the driver of our future success.

That commitment to entrepreneurialism is why we have appointed Mark Logan, formerly of Skyscanner, as the Scottish Government's chief entrepreneurial officer.

And that's about putting expertise and experience at the heart of government. I've spent more time than I ever would have wanted to dealing with chief medical officers over the past couple of years.

But what that has told me is the vital importance of having expertise at the heart of government. I know the enterprise and fair work committee took evidence three weeks ago from Mark and he said this, which I think is really important, it goes to the point the gentleman has just made.

If we're to have a thriving population of individuals who have fulfilling lives, we need to be starting things more often than we have been doing. And that basic ambition of being a nation where people start new businesses more frequently, is I think, central to our prospects for growth over the next decade. Whether those businesses are tech firms with global ambitions or social enterprises that are finding new ways of benefiting local communities.

And it's to help support that that Mark has been appointed. It's why we're investing in the new tech scalers network providing tech entrepreneurs with some of the best support anywhere in Europe, and reasonably soon that support network will become available to entrepreneurs in other sectors as well.

And of course, we need to encourage more people to think about being entrepreneurs, to think about setting up their businesses and Ana Stewart’s review of Women in Enterprise, going to the question that was posed a moment ago, is going to be published soon and as important in that regard.

And why is that important? Right now, only a fifth of new enterprises are founded by women.

So if we can change that, if we can encourage a situation where the rate of businesses being started up by women is even broadly equivalent to the rate that men start up businesses, then we're going to have a significant impact on the bottom line of our economy.

So encouraging more enterprise and entrepreneurialism will also help us seize new market opportunities, which is the final point I want to touch on this morning.

Just a couple of days ago, I visited Spire Global in Glasgow. Spire designs and manufactures satellites and it's one of the companies that is right now putting Glasgow and Scotland absolutely at the forefront of the space sector.  

Glasgow currently makes more small satellites than any other city in Europe. So it's an outstanding example of our strengths in space and advanced manufacturing and in the linkages to other sectors that that opens up.

And the national strategy highlights, and this is where I think we do need to lift our eyes and be optimistic, it highlights many other sectors in which we are already a global leader – food and drink, tourism, life sciences, financial services, and it sets out some of the key ways in which we need to support these sectors to grow.

Particularly to internationalise and to acquire the skills that they need. Possibly the biggest opportunity ahead of us right now, one that I know the enterprise committee has taken a strong interest in, is the transition to net zero.

If I talk just about the Scot Wind project of offshore wind opportunity alone, if we play our cards right and that's a big caveat, because we've got to take the decisions that make sure we realise this potential, but if we do that, that has the potential to deliver, not just green renewable energy for the future, but £28 billion of supply chain work in the years ahead.

So that incredible offshore wind potential we have, as that comes to fruition, will enable economic activity, the creation of jobs, it will also enable the creation of a new green hydrogen energy sector, perhaps the biggest industrial opportunity we've had in Scotland since the discovery of North Sea oil and gas.

And we know decarbonisation can create many jobs in other sectors as well. It's often seen as a big challenge and burden and it is difficult, but the opportunities are potentially limitless.

Just before Christmas, I opened DSM’s new factory in Ayrshire, that is providing a food additive for livestock, which will reduce methane emissions in agriculture, really important to us meeting a net zero ambitions but that additive will be exported across the world.

And of course, at a time of high energy costs, the importance of helping and supporting all businesses to reduce the carbon emissions is clearer than ever.

So fundamentally that move to net zero – yes, it's an environmental and moral imperative. But it is also possibly the biggest economic opportunity of our lifetime.

So government has a responsibility to support business, to support the private sector, in seizing those opportunities.

And as we do that, and this is the point I will conclude on, we know that we do need to work closely with business, with the private sector, generally, and we know that's not just a matter of holding meetings and discussions or even events like this one.

Engagement must have real impact and it must be two ways – it goes in both directions.

We're seeking to improve that engagement. We've appointed private sector leaders onto the delivery board for the national strategy. Perhaps governments everywhere give too much emphasis to devising strategies and too little emphasis to delivering those strategies – we're seeking to address that in how we take forward the economic transformation strategy.

As I've already alluded to, we've brought business perspective into the heart of government through the appointment of individuals like Mark and we set up a new Liaison Group for key economic sectors.

The chairs’ group of the industry leadership groups that Andy has already spoken about, I met with members of that group in Bute House last night, we had some good discussions there and to go to the question that was posed about skills as Andy said, that was one of the key discussions, the shortage of skills, the need to upskill, re-skill our population is a pressing one.

That involves discussion and engagement between business and government, but it also involves businesses in different sectors being more collaborative and working together to solve that challenge.

We also set up, and this I think is important, and it goes to business being involved in the design of policy, a new regulatory task force at the end of last year to ensure that when new regulations are needed, as unfortunately sometimes they are, we work with business to understand the impact and where we can to mitigate that impact, I know that taskforce also met yesterday.

So that engagement and collaboration, that genuine joint working is so important and it is what makes this gathering so important. It's not the only one but it is a crucial one and all these years after the Business in Parliament event was established, I think it is today more important than it has ever been.

As I said at the outset, these are tough times and there is no point in trying to overlook that. But we can and should still look to the future with optimism. This country has many hugely successful businesses. We have a strong international reputation and that is obvious to me every time I travel overseas to promote the country. We have important world-leading strengths in key sectors.

So by working together in the way that we are talking about here today, we can build on those strengths, we can certainly address current challenges, but I believe we can with real optimism, set ourselves the challenge and deliver on that challenge of maximising the opportunities of the next decade.

So thank you very much for listening, I'm very happy now to take a few questions.