Wellbeing Economy Secretary speech to business leaders

Good morning everybody. I’m delighted to be with you this morning and to have this early opportunity to speak to you about my new role as Scotland’s newly appointed Economy Secretary and my vision for what I’m hoping to achieve.

I should like to start by thanking Sara and the team at Prosper for so speedily and so well organising this event.

My thanks also go to Christine and Brodies for hosting us today.

Before being elected, I was a commercial lawyer and I was specialising at the time in energy and natural resources. So, walking back through the door of Brodies LLP this morning was a bit of a blast from the past for me.

In all seriousness, commercial legal practice is a high stakes – sometimes high pressure environment. A good training ground for politics in that regard.

As a commercial lawyer you have the privilege of becoming an extension of your corporate clients’ team and you have the responsibility of trying to help them make their vision come to light.

Training and practising in this environment taught me rigour, endurance and also the importance of meticulous attention to detail. And I mention all of that because I’ve brought that into government and I will seek to bring it to this role.

In particular I will bring the commerciality that is innate in the corporate world into what I think is the most challenging and profoundly essential role in this period for all of us.

Today is my first opportunity to set out my vision for growing Scotland’s economy.

But first, I want to be clear how delighted I am to take on this role. The Scottish economy with its creativity and its entrepreneurial spirit is world class.

The skills of our workforce are exceptional.

And the energy of our economy – both literal and metaphorical - is enormous.

Yes the challenges are great, but the potential is limitless.

So my message to all of you today, is that my bottom line is your bottom line. The P&L account of Scotland PLC.

I want our economy to grow, I want individual businesses to invest, I want productivity to increase.

And I want to help you succeed in all of that.

I want this, because in and of itself a strong, growing economy is a good thing.

But also bluntly it also makes the job of governance better and easier.

A growing economy means greater opportunities for our young people. It means a burgeoning tax base and it means reducing burdens on the state.

A strong and growing economy is central to the social contract that’s so important to me.

It is fundamental to our ambition of creating a wellbeing economy – one that is fair, green and growing and which enables better public services and allows our people to live better, healthier, happier lives.

It is also one which supports a just transition to net zero, capturing what I think are the era defining opportunities ahead of us and in doing so leaves no one -  no worker - behind.

So in all of that I’m seeking to be clear that your success is our success and vice versa.

The quality of life on offer in Scotland, the strength of public services, the opportunities that our education and skills system can create are a fundamental part of our economy.

And I want to work with you to make sure we foster the greatest possible collaboration between the public and private sectors can work constructively together for our mutual benefit.

So my new remodelled portfolio brings together for the first time economy, energy and net zero.

It is a Portfolio which, at its very heart, is focussed on tackling climate change and, at the same time, seizing the huge domestic and international economic opportunities that go with that, creating new businesses and well paid jobs right across Scotland – with opportunities in offshore wind, hydrogen, carbon capture and storage and many more.

Parts of my portfolio are sometimes presented as being in contradiction with one another, irreconcilable in that regard.

But I truly believe this to be wrongheaded and turns its face against the prevailing direction of travel in the global economy. I am clear that tackling climate change is an environmental and moral imperative. But, done right, it also presents the greatest socioeconomic opportunity of our time.

The future of the global economy is green – and I think it’s my job and our job collectively to make sure that Scotland can derive the greatest possible benefit from that future.

And just one example of how that is working in practice, today we are announcing £24 million of investment to secure an estimated £350 million inward investment by Japanese company Sumitomo Electric Industries  - and that at Nigg in the Inverness and Cromarty Firth Green Freeport. The plant, making state of the art high voltage cables for the offshore wind industry, is Sumitomo’s first cable factory in Europe. This will create hundreds of jobs.

This sort of investment is critical to capturing the opportunities of net zero, and it doesn’t happen by accident. Ministers have been engaging with Sumitomo for years. And this has truly been a true team Scotland effort.

So, lest we were in any doubt, the estimated £25 billion of Scottish supply chain investment, which was alluded to in the Supply Chain Development Statements as part of ScotWind, is most definitely real – we just need to make sure we do all the right things to capture it and make sure communities benefit from it.

That is why, last October, the First Minister announced up to £500 million over five years of public money to leverage private investment in ports, manufacturing and assembly work for offshore wind.

We kick-started this commitment with nearly £67 million in the Budget – a very difficult Budget. That brings our total support offshore wind to almost £87 million next year.

This investment is significant but not sufficient. As the First Minister’s Investor Panel made clear we also need to create the right conditions for private investment to flow.

This requires a collaboration.

In my view it requires a stable regulatory regime, the speeding up of planning and consenting decisions and faster progress on grid connections.

I am determined to pursue this, although that is a mix of devolved and reserved responsibilities. But progress is being made. Our onshore wind sector deal will half the consenting time for projects.

And we will shortly set out steps to improve resources for the planning system. All of this providing greater certainty and greater incentive for investment in Scotland.

I know that regulation is often seen as a bad thing, but I want us to get it right, and get it right quickly, so it can be not a barrier but an enabler of a growing economy.

These issues will combine in our Green Industrial Strategy a key tool in helping business and investors realise the enormous opportunities ahead.

It will be a clear and unambiguous statement of intent directed to companies and investors here and abroad, providing them the certainty they require.

Now while the economic opportunities of net zero are huge, and my new Portfolio is designed to seize them, they are far from the only game in town.

I will support entrepreneurial start up and scale up. Building on Mark Logan’s work and our £42 million investment in the Techscaler network, today I am announcing a pilot Techscaler hub in Silicon Valley. This will help promising start ups from Scotland in areas from health technology to space, build contacts with international investors and customers.

I am also absolutely committed to driving forward the recommendations of Ana Stewart’s report so that more women can start and scale businesses.

I also want to support clusters of new growth industries in areas like space, photonics and fintech, and AI, and put Scotland’s world class universities at the heart of our economic future through spin-outs and vitally the commercialisation of research.

But as we do that, as we look ahead, we will not forget what we’ve already got. I am determined to ensure that the key sectors on which Scotland’s economy is built and which are vital to our export and inward investment performance continue to grow and thrive.

Sectors such as financial services, health and life sciences, advanced manufacturing, tourism and hospitality, food and drink and energy. Businesses large and small, businesses urban and rural  - these are the foundations on which a strong economy is built, well-paid jobs and a healthy tax base is fostered.

Bluntly, when these sectors succeed, Scotland succeeds.

On a connected front, I want to take a moment to mention skills, talent and labour – and our need to work together on this.

While the past year has been tough for the economy and for people’s pockets, the labour market has remained tight with unemployment around 4% and many employers, many of you in the room, experiencing shortages, especially in areas like construction and hospitality.

Our shared conundrum is that whilst you and others are struggling to find people to do the work, too many people in Scotland,  around 240,000, are currently economically inactive due to ill-health.

So my next priority is I want to ensure inclusivity in our economy. Breaking down as far as possible barriers to participation. That’s why I will be working across government and with organisations like Public Health Scotland on long term solutions which tackle the physical and mental health barriers to work and its why we have committed nearly £200 million over this year to provide those vital employability services helping those who are currently most distant from the labour market find meaningful and sustainable employment in Scotland.

Those shortages are, of course, partly down to the disaster of Brexit. And while we lack the powers to control immigration, we will do all we can to encourage people to work and live in Scotland. The Talent Attraction and Migration Service I will launch later this year will seek to do this.

And I will be taking action on the recommendations of the James Withers Skills Review in pursuit of a lifelong education and skills system which serves the needs of learners, employers and our future economy.

There is a great deal to cover. I hope that my principal objectives have been clear, namely:

To grow our wellbeing economy via improved inclusivity – breaking down barriers to participation and growing our labour market.

Through flourishing entrepreneurialism – and support to start and scale.

By positioning Scotland to lead and innovate, fostering support for our existing high value sectors and making sure we are doing everything within our gift to seize the era defining opportunities which lie ahead of us in net zero.

And by my using the power of government to aid business and investment, tackling any unnecessary obstacles to growth in regulation and planning. And ensuring strong and reliable enablers - in digital and traditional connectivity, in housing, in skills and more. In this regard, I will seek to use all of the advantages Scotland has as a small successful nation to work together to get things done quickly.

As I draw my remarks to a close, it’s worth remembering that the Scottish and UK economy have been mired by flat, near zero, growth since mid-2022. Last week, data confirmed an official technical UK recession.

That’s why I restate - my aim is grow the economy. I want to see more people in work, greater productivity and higher wages; and I want to see higher and more sustained GDP growth.

I was struck by Graeme Blackett’s presentation to Prosper recently. Graeme was clear, as I am, that GDP growth is not the only measure to focus on. But equally he was also clear that it’s pretty difficult to improve people’s lives and living standards and to fund good quality public services without growing the economy. To me, that is ultimately common sense.

It will not surprise you that I also strongly believe that for so long as Scotland is part of the UK and without the full toolkit of economic levers, our national economic success is being constrained. That said, I will use all the levers currently in our control to prosper.

I will also strive to create a positive relationship between government and business. As I have said, this is fundamental to our mutual success. 

Our interests, they will not align all of the time.  

But it is important that our decisions in every part of government are well informed to ensure better and balanced outcomes.  And it’s vital that your decisions are well informed by a stable, planned programme of regulation, with no surprises.

In all of this, even where we disagree on narrow policy issues of the day, we should be aligned and assured in our mutual ambition for a fair, green and I emphasise, a growing economy.

My commitment to you is to take an approach across the whole of government to actively listen, engage and communicate with you -  to help achieve your business success and in turn Scotland’s economic success. My door is open to all of you. Thank you.