Chamber
Plenary, 26 Mar 2003
26 Mar 2003 · S1 · Plenary
Item of business
Scottish Economy
When we want to look forward, we must look back and judge the handling of the economy on the record of the current UK Government. We all know about the record of the Tories in government, when unemployment stood at 3 million.
Not only is the rate of unemployment historically low, but the employment rate is as high or higher than the rate anywhere else in Europe. Youth unemployment has fallen by 54 per cent since May 1999, while the number of unemployed older people has fallen by 32 per cent in the same period.
From a global perspective, Scotland has a small and open economy. In 2001, the growth in gross domestic product slowed simultaneously in the United States, Europe and Asia—the first time such a slow-down has happened in the three major global economies for almost 30 years. That situation has inevitably impacted on businesses in Scotland and, as a result—as we have made clear repeatedly—our GDP growth figures are not good enough. Of course, current events continue to cast a shadow of uncertainty across the global economy. That is why it remains absolutely essential that we continue to lay the foundations for our future prosperity. Stability in interest rates, inflation and the labour market and sound public finance through adherence to clearly defined fiscal rules give us the opportunity to invest in physical, human and knowledge capital.
"A Smart, Successful Scotland: Ambitions for the Enterprise Networks" sets out the Executive's vision of a more productive, competitive and prosperous Scotland. That vision, which is being implemented by Scottish Enterprise and Highlands and Islands Enterprise, is exactly about investing in physical, human and knowledge capital. Proof-of-concept funding, which is unique in the UK, small firms merit awards for research and technology—the SMART scheme—support for products under research, or SPUR, and SPUR plus are all investments in the commercialisation of Scotland's excellent academic research. The Scottish co-investment fund and the business growth fund form a £40 million package that is intended to help Scottish companies grow. Regional selective assistance has been refocused to provide better support for Scottish companies and smaller companies and to provide investment in knowledge capital as well as physical capital. There is a new research and development support grant scheme.
We have also made the most far-sighted investment of all: £450 million over a 10-year period in three intermediary technology institutes to commission and commercialise market-driven research. That investment is a bold long-term initiative to address the unacceptably low level of research and development in Scotland's private sector.
It is the investment in our people and their skills, however, which must be the greatest driver for economic growth in the years ahead. Carly Fiorina, the chief executive officer of Hewlett Packard, once said:
"Keep your tax incentives and highway interchanges; we will go where the highly skilled people are."
Our obligation is to ensure that the highly skilled people are right here in Scotland.
That is why we have delivered 50 per cent participation rates in higher education; the highest graduation rates in Europe; over 20,000 new apprenticeships; 500,000 students in our further education colleges; and a network of trade union learning representatives throughout our industries.
It is also why we will further increase the apprenticeship programme to 30,000; reintroduce individual learning accounts; and roll out educational maintenance allowances throughout Scotland so that no young Scot has to leave school or college in order to boost the family income.
When we issued "A Smart, Successful Scotland" in 2001, we also established a new joint performance team to measure progress. The joint performance team's second report is published this morning. We continue to do very well in relation to exports, e-business and the core reading and mathematical skills of our schoolchildren. We do not do so well in relation to GDP, productivity, business investment in research and development, entrepreneurial activity and new business formation. We will address the areas in which we do less well and seriously address the last two.
We need a cultural shift in Scotland—a shift towards entrepreneurism. If someone wants to change the culture, they start with the young.
Not only is the rate of unemployment historically low, but the employment rate is as high or higher than the rate anywhere else in Europe. Youth unemployment has fallen by 54 per cent since May 1999, while the number of unemployed older people has fallen by 32 per cent in the same period.
From a global perspective, Scotland has a small and open economy. In 2001, the growth in gross domestic product slowed simultaneously in the United States, Europe and Asia—the first time such a slow-down has happened in the three major global economies for almost 30 years. That situation has inevitably impacted on businesses in Scotland and, as a result—as we have made clear repeatedly—our GDP growth figures are not good enough. Of course, current events continue to cast a shadow of uncertainty across the global economy. That is why it remains absolutely essential that we continue to lay the foundations for our future prosperity. Stability in interest rates, inflation and the labour market and sound public finance through adherence to clearly defined fiscal rules give us the opportunity to invest in physical, human and knowledge capital.
"A Smart, Successful Scotland: Ambitions for the Enterprise Networks" sets out the Executive's vision of a more productive, competitive and prosperous Scotland. That vision, which is being implemented by Scottish Enterprise and Highlands and Islands Enterprise, is exactly about investing in physical, human and knowledge capital. Proof-of-concept funding, which is unique in the UK, small firms merit awards for research and technology—the SMART scheme—support for products under research, or SPUR, and SPUR plus are all investments in the commercialisation of Scotland's excellent academic research. The Scottish co-investment fund and the business growth fund form a £40 million package that is intended to help Scottish companies grow. Regional selective assistance has been refocused to provide better support for Scottish companies and smaller companies and to provide investment in knowledge capital as well as physical capital. There is a new research and development support grant scheme.
We have also made the most far-sighted investment of all: £450 million over a 10-year period in three intermediary technology institutes to commission and commercialise market-driven research. That investment is a bold long-term initiative to address the unacceptably low level of research and development in Scotland's private sector.
It is the investment in our people and their skills, however, which must be the greatest driver for economic growth in the years ahead. Carly Fiorina, the chief executive officer of Hewlett Packard, once said:
"Keep your tax incentives and highway interchanges; we will go where the highly skilled people are."
Our obligation is to ensure that the highly skilled people are right here in Scotland.
That is why we have delivered 50 per cent participation rates in higher education; the highest graduation rates in Europe; over 20,000 new apprenticeships; 500,000 students in our further education colleges; and a network of trade union learning representatives throughout our industries.
It is also why we will further increase the apprenticeship programme to 30,000; reintroduce individual learning accounts; and roll out educational maintenance allowances throughout Scotland so that no young Scot has to leave school or college in order to boost the family income.
When we issued "A Smart, Successful Scotland" in 2001, we also established a new joint performance team to measure progress. The joint performance team's second report is published this morning. We continue to do very well in relation to exports, e-business and the core reading and mathematical skills of our schoolchildren. We do not do so well in relation to GDP, productivity, business investment in research and development, entrepreneurial activity and new business formation. We will address the areas in which we do less well and seriously address the last two.
We need a cultural shift in Scotland—a shift towards entrepreneurism. If someone wants to change the culture, they start with the young.
In the same item of business
The Presiding Officer (Sir David Steel):
NPA
Our main item of business today is a debate on motion S1M-4057, in the name of Iain Gray, on the Scottish economy.
The Minister for Enterprise, Transport and Lifelong Learning (Iain Gray):
Lab
It is right that one of the last debates in this session of the Parliament allows us to focus on the Scottish economy, which is the issue that underpins all ...
Phil Gallie (South of Scotland) (Con):
Con
Does the minister believe that Scotland's economy will benefit from the block grant, given the current balance of trade deficit, which was induced by the nat...
Iain Gray:
Lab
When we want to look forward, we must look back and judge the handling of the economy on the record of the current UK Government. We all know about the recor...
Miss Annabel Goldie (West of Scotland) (Con):
Con
Will the change in culture extend to political thinking? Does the minister recognise that bureaucrats do not deliver business start-ups and that the business...
Iain Gray:
Lab
Of course the change in culture has to extend to politics. That is why, as I am about to say in a moment, we have made a political decision to invest unprece...
Alex Neil (Central Scotland) (SNP):
SNP
Can the minister update members on the current state of the accessing telecoms links across Scotland project in relation to broadband and tell us whether the...
Iain Gray:
Lab
As Mr Neil probably knows, the first stage of project ATLAS came online early, and the second stage is still on time. Nevertheless, Scottish Enterprise has p...
Alasdair Morgan (Galloway and Upper Nithsdale) (SNP):
SNP
Even if one were to accept that taking the electronics sector out of the minister's GDP figures was a valid exercise, how does he explain the fact that for t...
Iain Gray:
Lab
The question posed is extremely interesting, because we know that for 25 to 30 years Scotland's GDP growth has lagged behind the UK's. One aspect of consider...
Phil Gallie:
Con
Does the minister agree that between 1989 and 1996 the Scottish economy grew at a rate that placed it either in the third or fourth position in the UK charts?
Iain Gray:
Lab
Nonetheless, the fact is that for 25 or 30 years—for a generation—Scotland's growth rate has lagged behind the UK's. However, we also know and understand—I w...
Andrew Wilson (Central Scotland) (SNP):
SNP
No, we would not.
Iain Gray:
Lab
An SNP document says that as a first step, the SNP"will use savings from the reform of the local enterprise network to reduce business rates to a level lower...
Miss Goldie:
Con
Will the minister give way?
Iain Gray:
Lab
I am finishing.As we look forward to a new parliamentary session, it is time for the Scottish Parliament to choose investment in Scotland's future, in Scotla...
Andrew Wilson (Central Scotland) (SNP):
SNP
Iain Gray nearly got going at the end of his speech. We almost got into a debate, and then he had to sit down. My throat is failing me at this early stage in...
Iain Gray rose—
Lab
Andrew Wilson:
SNP
I will take Iain Gray if he can tell us why a number of those in the advert said that they had not been contacted by Labour and so their support had been mad...
Iain Gray:
Lab
I have this to say about it: one chooses who to ask to pass judgment on one's success. I choose not a single Labour activist who expressed a view with which ...
Andrew Wilson:
SNP
That is terrific. If the minister is complacent and thinks that things are fine, why did his predecessor resign saying that she could not get the economy to ...
Ms Wendy Alexander (Paisley North) (Lab):
Lab
Will Andrew Wilson give way?
Andrew Wilson:
SNP
No, thanks. Why have 55 of Labour's business supporters said that they will not support Labour in the election? Why did 30 of them go bust?
Ms Alexander:
Lab
Will Andrew Wilson give way?
Andrew Wilson:
SNP
I will not.The reality is that some of those people have even said that the Labour party did not contact them. It was making up support that did not exist.
Ms Alexander:
Lab
Will Andrew Wilson give way?
Andrew Wilson:
SNP
How can we possibly trust a party that has made up supporters and spun the truth when most of those who backed it previously will not back it now? Why should...
Ms Alexander:
Lab
I challenge Andrew Wilson now because I have heard him repeat his false allegation so often. I challenge him to provide a sourced quotation from anywhere tha...
Andrew Wilson:
SNP
I have to rely for my sources on Alf Young in The Herald, who reported Wendy Alexander as having said it. If it is not true, I am sure that she will have wri...
Iain Gray rose—
Lab