Chamber and committees

Thank you very much indeed, convener. I also thank the committee for giving me the opportunity to be here today to share the Government’s priorities in my portfolio area.

The impacts of the cost crisis, the pandemic, Brexit and fiscal instability resulting from United Kingdom Government decisions have brought untold damage to our economy, with persistent high inflation and unprecedented drops in living standards. Coupled with the climate and nature emergency, these crises have exposed fundamental weaknesses in the current economic system, and that backdrop underlines the need to transform our economy into one that is resilient and which prioritises wellbeing—an economy that serves people, not the other way round.

As we transition to a wellbeing economy, we will embed equality, inclusion and human rights in everything that we do. I am committed to the First Minister’s three interlinked missions of growing a fairer and greener economy, seizing the opportunities of net zero and creating better communities.

At the heart of a wellbeing economy will be economic growth for a purpose—that is, to drive improved living standards, promote wellbeing, reduce poverty and deliver sustainable high-quality public services—through harnessing and combining the economic power and opportunity of Scotland’s rich renewable energy resources.

The skills and talents of our people and businesses will be critical to achieving that. We will work closely with the private sector and the public sector, locally, nationally and UK-wide, and we will engage directly with communities and partners in the third sector.

Working with my Cabinet colleagues, we will deliver our national strategy for economic transformation, with a sharp focus on policies and actions that have the greatest potential to grow and change Scotland’s economy, expand the tax base to fund excellent public services and make people’s lives better. That will require a new approach to the Government’s relationship with business, so at the First Minister’s request, I will engage widely with business leaders to develop and agree with the private sector a new deal for how we will work with business to deliver a growing economy that increases wellbeing.

In the First Minister’s prospectus, I have laid out my priorities for what I want to deliver over the next three years, and you will no doubt want to hold me to account on them. Those priorities include: more people being in work; more people earning at least the real living wage and a narrowing of the gender pay gap; more business creation and more businesses growing to scale; increased investment in productive assets; internationally competitive clusters of excellence, including in green technologies, health and life sciences, digital and advanced manufacturing; greater regional and local economic empowerment, including through our programme of community wealth building; more growth in exports; and more high-quality inward investment.

A just transition for our energy sector is, arguably, the biggest opportunity that we have. We have a huge opportunity to establish Scotland as an exporter of green hydrogen to Europe, and analysis shows that, overall, the number of low-carbon jobs in energy production could rise to 77,000 by 2050. The potential can be seen in the ScotWind offshore leasing round, which has already delivered more than £750 million in revenues and will bring billions of pounds of investment into the Scottish supply chain and the wider economy. Indeed, the recent announcement that the Japanese company Sumitomo Electric Industries will be coming to Scotland to build a cable manufacturing plant demonstrates the strength of investors’ confidence in our net zero economy vision.

I look forward to discussing some of those points with the committee in greater detail, and I appreciate the opportunity that you have given me to set out my stall.

Yes, I will. We are looking to build on the city and regional growth deals; to respond to the regional economic policy review; to work with regional economic partnerships to ensure that there are regional intelligence hubs; and to simplify the funding landscape. I am due to meet our enterprise agencies over the coming weeks, when I will be seeking to discuss that, the suggestions that they have and how I respond to those over the coming weeks and months.

The chief economist has already said that it would be difficult to make a specific target because the development of the projects is capital intensive. Depending on the project that we are talking about, we can sometimes see clear and discernible benefits with regard to jobs. The establishment of the new directorate in the Government gives credence to the fact that we are determined to ensure that we have a strong domestic supply chain that delivers good jobs from the renewables revolution.

I have not had any interest signalled to me, but we continue to discuss such opportunities with the management of Glasgow Prestwick Airport. As Mr Cook suggested, the business is profitable. The most recent information that we have is that the operating profit was £1.9 million and the profit before tax was £1.2 million. It is a good-going concern, so I expect that commercial interest will be forthcoming. When interest arrives with the Government, we would of course look to support Prestwick returning to the private sector as soon as is practicable.

Being out of the EU has undoubtedly had an impact on our political and trading relationships. In recent years, we have seen incredible uncertainty and difficulties in trade. I welcome the progress that has finally been made on trade with the Windsor framework, but it follows a number of years of incredible difficulty for our exporters into Europe.

On a political level, we are trying to ensure strong working relationships with our friends in Europe and will continue to do so, because it is an incredibly important market for us, as Mr MacDonald has outlined. The other countries that he mentions are also important, which is why our SDI network does such an important job. The network ensures that we deliver on our ambitions in areas where we have particularly strong trade with certain countries, or where there are strong sales of certain products.

Mr Cook or Mr Gillespie might want to say more.

Yes. That work is on-going. You can see the work that has been done with the tech scalers network. Currently, we are analysing Ana Stewart and Mark Logan’s report on women entrepreneurs. We are looking at what more we can do to make Scotland an entrepreneurial hub.

Mr Beattie is right in his assessment of where private capital will arrive. As I have said, we are working with the likes of the Scottish National Investment Bank on ways of making Scotland as attractive as possible for inward investment. It is already punching above its weight on such investment when compared with the rest of the UK, so we are already giving the market some confidence that we are a good place to invest in. I have just returned from Japan, where a significant decision has been taken by Sumitomo Electric Industries on inward investment to support the supply chain for our offshore wind opportunity. It is looking to build a substantial factory here in Scotland to produce the cable that will be required for the offshore wind industry.

Mr Beattie is right that we cannot be complacent, but we can already see the market having confidence in Scotland as a good place in which to make investment decisions.

Yes.

I hope that Ferguson Marine can continue to make progress towards being a commercially successful yard. The intention behind saving the last commercial yard on the Clyde was that we would ensure that we protect the jobs, the manufacturing base and the traditions of Scottish manufacturing.

Clearly there have been challenges at Ferguson; they are well documented. However, we continue to work with the management and the workforce to ensure that the two vessels will be delivered as quickly as possible and that Ferguson then has the opportunity to bid for more work and make itself commercially successful.

Yes.