First Minister Alex Salmond
Launch of the Government Economic Strategy
University of Glasgow
November 13, 2007
Today is the first of two pivotal days for the future of Scotland's economy.
Today, we will provide the strategy to help us achieve our purpose of increasing, sustainable economic growth in Scotland - while, in tomorrow's Scottish Budget, we will unveil the spending plans that will help us deliver on that strategy.
Therefore, there is a direct connection between what John Swinney and I have to say to you today, and the Budget that we will unveil tomorrow.
Tomorrow, through our spending plans, we will set out our social democratic contract with the people of Scotland to deliver, despite tight financial times, record levels of investment in public services and fairer, lower taxes for Scottish families and businesses.
The central aim of the Budget is to direct resources to deliver our overall purpose of a more successful Scotland, with government investment contributing more to higher economic growth and public services that deliver on people's needs and expectations.
Today John Swinney and I will present the Government's overarching economic strategy for Scotland. A strategy that is firmly based on our belief that Scotland can be one of the most successful countries and economies in Europe and the world - a strategy that is focused 100% on greater Scottish success.
It is a can do strategy for a can do nation.
Background to the economic strategy
We consider our future at a time of growing confidence for this nation. Only last week Scotland received a tremendous boost by winning the race to host the 2014 Commonwealth Games. As the host city, Glasgow will grow and prosper. And so too will the whole country, through new business opportunities, improved infrastructure and Scotland's increased international standing.
This Government aims to achieve a transformation of Scotland's economic fortunes. We want nothing less than to see this country at the top of the world rankings - with big winners in more sectors of our economy.
We have so many advantages, from an excellent international reputation to some of the finest research and innovation on planet. These advantages - from renewables to financial services and bio-science - can propel us to even greater success.
Let us be clear: economic renewal in Scotland will not be completed in weeks or months - although the direction we set today will pay dividends well into the future. Over the past three decades Scotland's long-term growth record has been disappointing, compared to that of our similar neighbours - Ireland, Norway, Iceland, and Denmark - and doubly disappointing compared to our economic potential. It will take determination and sustained effort across the whole economy; through research, development, risk-taking, and individual achievement. And through common endeavour and the combined talents of all Scotland's people, we will meet the challenge. We will succeed.
The work of transformation has already begun. The government has been busy since day one, making the right early decisions to promote our long-term success. Take our plans on scrapping the graduate endowment. The reform of Scotland's enterprise networks. And the new approach to Government that we are pursuing - clear and open about what we do and honest about where others should take the lead. In short, Scotland is already making progress.
What is new about this strategy
And today we unveil the Government's full economic strategy. A strategy with a clear vision of what the Scotland's economy and people can achieve, and how we can get there.
It is fitting that this new Government presents a new, ambitious strategy for Scotland's economy. This strategy differs in four ways from previous plans:
First, the Government is committed to use all its existing responsibilities wisely - at central and local level - to promote Scotland's economic development. This is why we are cutting business rates and moving to a new system of fairer and lower local tax. Businesses are, of course, crucial to the delivery of this strategy and we will keep listening to their needs, and keep taking the action that will help them drive up their competitiveness and create jobs.
Second, we are setting a far higher level of ambition than previous strategies. And this ambition is nothing less than Scotland's people and businesses are demanding. So today we are setting out this Government's goal and our plan to make Scotland's economy a world beater - catching, matching and then overtaking our more successful neighbours.
Third, we are introducing a new outcomes-based model for tracking Scotland's economic performance. Clear and simple targets which support the overall purpose of this Government and our five strategic objectives. We want this strategy to deliver benefits that are real and meaningful - improvements for everyone in Scotland.
Fourth, as well as using our existing responsibilities to their maximum benefit, this strategy also sets out what we must do to deliver the best future for Scotland. It makes the case for additional responsibilities in crucial areas currently reserved to the UK - areas such as taxation where the ability to reduce corporation tax would transform our competitiveness.
The National Conversation has already set out the benefits of full financial flexibility for Scotland. And there's no doubt that the ability to take our own tax and spending decisions would provide the best foundations of all for Scotland to flourish.
So these new, more ambitious goals are central to our economic strategy.
Our plans have been developed in close discussion with the Government's Council of Economic Advisers - world-leading experts in finance, taxation, energy and industry policy. And, through our consultations, we have heard the ambitions and priorities of Scotland's businesses, local government, trade unions and citizens. I would like to thank all those who have contributed their thoughts to the development of this strategy. We can have confidence that we are drawing on the very best advice in order to make the most of Scotland's economic opportunities.
Matching the talents of our people to our competitive advantages
As I have said, John will outline the economic strategy in more detail. However, let me highlight two interlinked aspects that are fundamental to our new approach - our people and comparative advantage - that will be the foundation of Scotland's success in the global economy.
The experience of our near neighbours Ireland has taught us that, if we can build up our comparative advantage, then we will hang on to more of our more talented young people. And that in turn will enhance our economic strengths even further.
Through this strategy we will support a range of sectors to make them highly adaptable and responsive, in a fiercely competitive global market. For example, we will make every effort to promote Scotland's world class financial services.
Earlier today I visited the offices of Barclays Wealth in Glasgow, where they are creating new financial services jobs in this city. This is a sign of the growing strength of Glasgow and its International Financial Services District. And I say to business people looking at the UK and considering where to invest, that Glasgow is not simply 20% cheaper than London; it is better too.
Scotland's success in financial services is built on centuries of expertise and - with its reputation and global weight - the sector well placed to grow strongly over the coming years.
Of course Scotland cannot and will not simply rest on its established strengths. We must capture new sectors, growing markets, future opportunities.
The venue for today's discussions is testament to Scotland's potential. The major investment that Wyeth has made in Scotland's life science sector is a huge vote of confidence in our skills and our knowledge base. We will continue to build on this success.
And this Government's ambition of turning Scotland into a global player in green energy is not just at the heart of environmental policy; it is at the heart of our economic policy. So tomorrow's spending review will unveil measures to take the renewable energy industry a step closer to fulfilling its enormous potential.
Clearly, Scotland has great opportunities to succeed in the global economy. To do so, we must equip ourselves for the challenge. We must build an education system that will give our people the knowledge, the confidence and the creativity to succeed.
Long term success also requires Scotland to retain its best and its brightest talents. We are an open-minded, internationalist nation but too many of our citizens leave seeking opportunities and do not return. We do not want Scotland to have the most talented departure lounges in the world. It is our job to make sure that Scots abroad know they can build even greater success for themselves and their families here at home.
An ambitious vision for Scotland
This new economic strategy will help Scotland to achieve its full economic potential.
We should not doubt ourselves: we have done it before. Just over a century ago Scotland led the world in innovation and industry. We can do so again. We will unleash a new Celtic Lion in this century.
This strategy and tomorrow's spending review are the first step towards joining those small independent nations around us who enjoy great economic success by determining their own future.
So my message to this country is that economic transformation is possible in Scotland. This Government is committed to it. And we want to unite this nation to make it happen.
I will now hand over to John to present our strategy and then we'll be happy to answer your questions.
Thank you.