Programme for Government 2023 to 2024

Cabinet Secretary for Wellbeing Economy, Fair Work and Energy

Neil Gray MSP

Our vision is for a wellbeing economy – an economy which meets the needs and aspirations of people and provides opportunities for all. We want our businesses to thrive and for their success to benefit all of society. This is critical to our three key missions. A genuine wellbeing economy will reduce poverty and support high quality public services. We will ensure this happens, backed by public and private investment, and informed by our Wellbeing Economy Expert Group and through our international engagement with the Wellbeing Economy Governments network.

We must ensure that our economy is fair, green, and growing, and benefits all of Scotland’s communities and people. While we are rightly proud of the progress we have made, we know there is more to do. Scotland has the people, skills and resources to transform our economy and secure the economic opportunities and benefits of a just transition to net zero. This is how we will protect the planet, improve living standards, create good and sustainable jobs, increase wages, and attract investment. Creating good jobs and increasing wages is one of the best ways to support our anti-poverty agenda. A vibrant economy will boost the tax revenues that sustain high quality public services.

The New Deal for Business is about creating a trusting and meaningful partnership with business, focused on common priorities. It has fairness and wellbeing at its heart. We need our businesses and the communities they are part of to thrive. And we need our businesses to invest and innovate to drive the transition to the green economy. Working closely with business through the New Deal for Business Group, we have jointly prioritised ten key recommendations that will make the most immediate difference to how we work with business to deliver an innovative, successful, growing economy that increases wellbeing.

The current economic environment is putting pressure on business and there are major challenges ahead too, not least in the transition to net zero. That is why we are committed to reviewing the cumulative impact of devolved regulations and to acting where needed. We will push forward a programme of regulatory reform, including putting in place a process for business to propose devolved regulations they feel are no longer required for removal if a good case can be made. We will also consider proactive regulatory changes which support businesses in Scotland, especially our small businesses and social enterprises.

Entrepreneurship is at the heart of our National Strategy for Economic Transformation, with Scotland having the potential to become a leading European start-up nation. We continue to build world class infrastructure that will create and scale more successful businesses. Higher and further education are at the very heart of our entrepreneurial ecosystem and our Entrepreneurial Campuses Blueprint details how we will work together to create internationally

competitive clusters of start-ups and scale-ups. There is a moral and economic duty to support greater diversity amongst our entrepreneurs and we have therefore committed to taking forward the recommendations of the recent Pathways Review of Women in Entrepreneurship.

Innovation is crucial for a thriving wellbeing economy and our National Innovation Strategy sets out how we will deliver on our ambition to make Scotland one of the most innovative nations in the world. This will improve access to investment, increase the commercialisation of research and build clusters of businesses in sectors where Scotland can compete on the world stage. It will also ensure that successful industries such as tourism and financial services remain competitive and continue to be supported.

Our enterprise agencies and Local Government have a long history of supporting businesses and economic development and we will work in partnership on a programme of reform that will ensure a clear focus on our shared priorities, make best use of Artificial Intelligence, digital and data, and make it easier for businesses of all sizes to get the support they need.

Our reform of the education and skills system will continue to ensure that we have the skilled workforce and talent pool to attract investment and meet Scotland’s economic needs. Our focus on securing quality inward investment is already reaping rewards as Scotland continues to be the most attractive location outside London for inward investment, with more than 8,500 jobs created last year.

Recognising the impact of the UK Government’s post-Brexit immigration policies on our labour market, we will continue to work with our Talent Attraction Industry Advisory Group to attract workers, including entrepreneurs, from across the rest of the UK, as well as internationally, and to promote Scotland as a career destination. As set out by the Cabinet Secretary for Social Justice, we will also launch a Talent Attraction and Migration Service.

Scotland is at the forefront of the clean energy transition and our green jobs revolution is underway. Earlier this year we consulted on our draft Energy Strategy and Just Transition Plan, which sets out the importance of the development of Scotland’s future energy system for our economy. We are backing this up with almost £5 billion of investment in the net zero energy economy in Scotland over this parliamentary term.

We are ensuring that economic prosperity and investment is shared across our communities and regions. This includes establishing Green Freeports in the Firth of Forth and in Inverness and Cromarty Firth, promoting regeneration and high quality job creation and fostering an innovative environment. Regional Economic Partnerships in both Glasgow City Region and the North East are working with the Scottish and UK Governments to deliver two Scottish Investment Zones. These partnerships will build on local strengths, boosting investment, innovation and productivity, while promoting Fair Work and wellbeing in each region.

Delivering in the year ahead

In the coming year, I will take forward the following critical activity as we continue to transform and grow Scotland’s economy.

Working with business

• Reset the relationship with business through implementing recommendations made by the New Deal for Business Group, including on the development and implementation of regulation.
• Work with business to develop a process for identifying, considering and if appropriate removing regulations no longer required, and to propose new regulations to support businesses in Scotland, especially our small businesses.
• Bring business representatives and other stakeholders together to advise on the successful implementation of new regulations through the Regulatory Review Group and ensure the consistent and effective use of the Business and Regulatory Impact Assessment, with businesses engaged from the earliest stage of policy development.
• Work with business to address Scotland’s labour market participation challenges, starting with a focus on health and the needs of parents, particularly those in the six priority groups, so that this helps to reduce child poverty – recognising that women are more likely to take on caring responsibilities, this will include continuing to support and promote flexible working from day one of employment.

Supporting small businesses

• Build on the work of the New Deal for Business Group in relation to Non-Domestic Rates and invite the views of members on priorities, alongside the considerations of the Tax Advisory Group, to inform decisions in the Budget.
• Establish a new Small Business Unit in the Scottish Government to work more closely with small businesses and ensure they are heard during policy development, building good practice in participation and engagement.
• Work with Local Government and our agencies to transform the way we support small businesses, improving the way we collect and hold data about businesses across the public sector so we can target support better and make it easier for businesses across Scotland to access the support available to them.
• Work with the Scottish Council for Development and Industry (SCDI) and other representatives of small business to deliver a three-year programme to raise productivity and deliver cost savings for small businesses.
• Work with business to maintain and improve prompt payment in public supply chains.
• Seek action from the UK Government to ease the current pressures on Scottish businesses, including through expansion of shortage occupation lists and a VAT reduction on Small and Medium-sized Enterprise energy bills.

Delivering Fair Work for all

• Boost wages by increasing the number of employers who pay at least the Real Living Wage including through Fair Work conditionality for grants, introducing sectoral Fair Work agreements, and improving outcomes by delivering the Fair Work Action Plan.
• Work alongside business, Local Government
• and the third sector to deliver person-centred employability support, helping those who face barriers to labour market participation into work, with a particular focus on parents, helping to meet our child poverty targets.

Supporting entrepreneurship and innovation

• Increase support for Scotland’s entrepreneurs and the programmes that help them succeed, including greater backing for proven initiatives such as Scottish Edge and the Scottish Ecosystem Fund and focus our enterprise agencies on creating the conditions in which businesses start and scale successfully.
• Make it easier for everyone to start and scale a business in Scotland by delivering the vision of the Pathways Report by Ana Stewart and Mark Logan, with the launch of new pre-start centres and pop-ups designed to encourage women and other under-represented groups to become entrepreneurs and get the support they need to access funding and advice.
• Support the development of globally competitive clusters of businesses in high-value sectors such as energy transition, health and life sciences, advanced manufacturing, and the application of data and digital technologies through our Cluster Development Programme, as well as simplifying access to innovation funding and ring-fencing a significant proportion of public sector innovation funding for key sectors.
• Increase our backing for the development of Scotland’s universities as entrepreneurial campuses and ensure that the new Techscaler network offers high quality education programmes to entrepreneurs.
• Undertake an independent review of how we maximise the potential of employee-owned cooperatives and social enterprises and ensure that social entrepreneurs play a key part in the growth of Scotland as a Start-Up Nation.
• Continue to invest over £600 million in the broadband networks of the future, through the Reaching 100% (R100) broadband programme, and support the Scotland 5G Centre to launch the seventh 5G Innovation Hub – a 5G test network that will support Scotland’s businesses to develop and adopt new cutting edge digital technologies and applications.
• Provide additional targeted investment to enhance the capacity of our renewables supply chain to trade internationally and identify critical markets to export to, consolidating the strength of our supply chains through targeted inward investment.

Green growth and energy

• Develop a Green Industrial Strategy, setting out how we will help businesses and investors to realise the enormous economic opportunities of the global transition to net zero and create good, well-paid jobs across Scotland in sectors such as offshore wind and hydrogen, and support the development of sectoral Just Transition Plans.
• Publish and start implementing a new Energy Strategy and Just Transition Plan, providing policy certainty for consumers, workers, businesses and investors by setting a clear direction for the future of Scotland’s energy sector and the actions that we will take to maximise the economic and social benefits from our transition to a future energy system and to ensure our energy security.
• Establish a sector deal with the onshore wind industry to help deliver our onshore wind ambition, maximising the benefits for Scotland’s economy and communities and accelerating our consenting processes – underpinned by an ambition to halve the average determination time for section 36 applications to 12 months where there is no public inquiry.
• Continue to enhance Scotland’s place as a world-leading destination for offshore wind investment, including updating guidance to further streamline offshore wind consenting processes and ensure the most efficient management of both pre-application and post-consent processes to shorten timeframes where possible.
• Publish a Solar Vision for Scotland, setting out our ambition for solar and how we will facilitate its growth.
• Continue to implement the Hydrogen Action Plan and use the Hydrogen Innovation Scheme and the Hydrogen Investment Programme, via the upcoming launch of the Green Hydrogen Fund, to develop Scotland’s potential to become a leading nation in the production of reliable, competitive and sustainable hydrogen.
• Work with industry to accelerate decarbonisation and create energy transition opportunities at major industrial sites with the support of the Scottish Industry Energy Transformation Fund, the Energy Transition Fund and the Emerging Energy Technologies Fund.

Attracting investment and boosting exports

• Establish a dedicated Investment Unit in the Scottish Government to act on the forthcoming recommendations of the First Minister’s Investor Panel and to provide a clear route for investor engagement.
• Learn from other jurisdictions that are attractive to investors, change the way the Scottish Government and its agencies work to attract investment at scale, raise our capacity and capability, and work closely with the Scottish National Investment Bank, the Scottish Futures Trust and our enterprise agencies to crowd in private investment and accelerate innovative investment in infrastructure.
• Drive forward a programme of targeted export support and promotion, including supporting the Scottish Chambers of Commerce International Trade Programme, implement our Sector Export Plans for life sciences, technology and renewables for developing and delivering a sector export plan for hydrogen, and improve the trade deals and arrangements within which Scottish importers and exporters operate.
• Work with Scottish Development International to attract even more high quality inward investment to Scotland, reinforcing Scotland’s position as the best place for inward investment in the UK outside London and deliver investment in the technologies required to achieve our ambitions in areas such as energy transition, offshore wind, hydrogen and space.
• Encourage the UK Government to work with the Scottish Government to undertake a meaningful review of how we can jointly support growth across Scotland’s businesses, with a particular focus on how tax and economic policy can stimulate investment in key sectors such as renewables, life sciences, big data and Artificial Intelligence – as set out by the First Minister in a recent letter to the Prime Minister.

Thriving local and regional economies

• Support regional empowerment and growth by acting on the recommendations of the Regional Economic Policy Review and working with Local Government and other partners to develop Scotland’s network of Regional Economic Partnerships, supporting our rural and island businesses, including tourism, and communities in particular.
• Transfer lead responsibility and new investment for a comprehensive masterplan for the Clyde Mission to Glasgow City Region and Argyll and Bute.
• Continue to empower all of Scotland’s regions, and further develop this by considering Glasgow City Region’s ambitions to create a metropolitan region and Edinburgh’s Regional Economic Prosperity Framework, as a precursor to similar discussions with all regional economic partnerships across the country.