- 16 Jun 2021
Welcome to what is the first National Economic Forum since November of last year, I think the first thing I would want to acknowledge is that the period since then – indeed like the whole of the last 15 months - has been really difficult and really disruptive for probably all of you.
Many people have had to keep businesses closed for extended periods of time, and virtually everyone across our society has had to completely change how we live our lives and in the context of businesses that has meant changing working practices, sometimes really fundamentally. Employers of course, have endured restrictions that none of us would previously have contemplated, and all of that has been in the interest of protecting public health and indeed in the interest of protecting life.
So the first thing I want to say today, and it is really important, is “thank you” – sincerely - for everything you have done to help keep your workers and your customers and indeed the communities you operate in as safe as possible
Every single one of you has played a part in saving lives, which of course is no small thing.
And all of you, all of us collectively of course, have helped to get us to a stage now, where as we saw from the announcements we made yesterday, we are not out of the woods on Covid, but we are able to plan for recovery.
I also want to thank you for everything you have done – not just to keep your workers safe – but also to look after their wider welfare. I know that the mental health and wellbeing of your staff has been a big concern for many of you.
We often speak, rightly, in my view about a well-being economy. But the last 15 months have really brought that out of the abstract, and has demonstrated in very real ways, just how fundamental that is and how fundamental employers are to achieving that. Many of you have gone to great lengths to support your workers – in really difficult circumstances. By doing all of that, you have made a big difference to them and to their households.
When I spoke to this forum back in November, we were in many different ways in a very different position, from the one we find ourselves in now.
Restrictions back then – although I know it’s difficult to take much comfort in this, were back then much tighter - in all parts of the country - than they are now.
We hadn’t then of course encountered either what is now called the Alpha or the Delta variants – but we also had not begun the vaccination programme, so we hadn’t begun to experience the benefits that is bringing to us.
Vaccination means that although the Delta variant may be slowing our progress out of restrictions, I am really confident that it will not stop that progress.
I said yesterday that we in all likelihood won’t be able to move any parts of the country down to level 0 next week as we had hoped would be the case, but not withstanding that, we are very firmly planning for how we can hopefully ease restrictions in the future, and I hope in the not too distant future, so over the course of this summer.
Next week, we will publish an updated strategic framework which will set out our up to date thinking on that. As part of that we will also publish our up to date thinking based on the review work we’ve been doing on physical distancing – which is something that is of huge importance, and has been of huge importance in helping us to contain this virus, but it is also something that is hugely important to businesses and to assessments of how businesses can trade and operate sustainably in the medium to longer term.
I know that any delay in easing restrictions is frustrating – let me assure you that it is frustrating for all of us after 15 long months of having to endure them. But I still expect, and this is the note of optimism that I want to be very clear about today, that as vaccination reduces as we believe it is, the direct health risks caused by Covid – we will be able to continue a route back to much greater normality than we have become accustomed to over this past year and slightly more than that.
I want to provide you with two basic assurances today. The first is, that for as long as restrictions are needed, we will give businesses as much support as we possibly can.
And the second is that as we recover from the pandemic, the needs of business and the economy generally will be central to our thinking. We know that a successful economy is fundamental to all of the ambitions we have for the future.
That’s why – before the election – the party I lead set out a number of key actions that we would take within the first hundred days of forming a new government which we have now done.
We are now implementing those actions. Some provide essential immediate support for the economy –paying out grants for taxi drivers, for example, launching a fund for tourism and establishing a campaign to promote local businesses.
We are also ensuring that retail, hospitality and leisure businesses won’t have to pay non-domestic rates on their premises for the entirety of this financial year.
And many of our other actions will support a sustainable longer term recovery. We want to equip Scotland now for the economic needs of the future.
That for example is why we are establishing a Council for Economic Transformation – we want to make sure we have the expert insight from across business, from economists, trade unions and others, as we deliver that sustainable recovery.
Today’s workshops are focussed on some of the key themes which we expect to dominate the Council’s deliberations.
Building resilience is one of those. The importance for example of strong domestic supply chains has been discussed for some time – especially in relation to renewable energy, and that is still a real imperative, an area where we need to do much better. But it is also an issue which has been highlighted very forcibly by the pandemic – some companies performed wonders, in transforming their operations to make personal protective equipment available.
That was a reminder of the fact that supply chains make our economy more resilient, as well as boosting prosperity. We know that government has an important role to play in fostering those supply chains– including in our procurement practices – but we also know we need to work more effectively with partners.
Opportunities for young people is another key theme of our deliberations. We know from previous economic crises, that youth unemployment can harm people’s life chances – not for a few months or even a few years – but often for the rest of their working lives, and the impact of that can be severe.
So we have been determined, and I think this is a collective determination to avoid large-scale youth unemployment. It would not just be harmful now – although it would do real damage to young people now, but it would also do significant damage to the prospects of our economy in the future.
That is one reason – among many - why the Scottish Government has supported the UK Government’s Job Retention Scheme, and why we are concerned by the plans to phase it out from the start of next month.
We want the UK Government to extend it, but to also make it clear – well in advance of the furlough scheme eventually ending – how it will support jobs in the sectors which have been most affected by Covid.
It’s also why the Scottish government has established the youth guarantee – to ensure all young people have a chance to take up work, training, education or a meaningful volunteering opportunity.
And it’s why so many of our first one hundred days commitments are based around skills. For example we are supporting colleges to deliver over 5,000 short course opportunities over the this summer and autumn, and providing additional funding for youth employment partnerships.
Delivering on the young person’s guarantee is, as I have said, a really important part of our plans for recovery.
But we know that skills isn’t just an issue for the young workforce. As our economy increasingly changes at a faster and faster pace, people who are currently working will need new skills.
That’s why we have established the National Transition Training Fund.
That will help with the transition out of the pandemic.
It will help with the transition required as a result of Brexit – for example for companies that are experiencing right now, in the here and now real skills shortages.
And of course – like other initiatives, such as the Green Jobs Workforce Academy - it will help with that all important transition to a net zero economy.
We’ve announced today a further £20 million of funding which has been allocated through the fund. It will help us to meet skills needs in sectors such as digital technology, advanced manufacturing, tourism, hospitality, and care.
And much of the investment that we are announcing today, will also help with the transition to net zero. For example more than £2 million is going to construction, to support the skills needed for that sector to decarbonise.
The move to net zero is the focus of another of today’s discussions - and this of course illustrates the point that all of the issues we are discussing are really interconnected, none of them stand on their own.
The challenge of tackling youth unemployment, and of building economic resilience, cannot be separated from the challenge of moving to net zero.
I’ve said previously, and I am not alone here, that addressing the climate crisis is, above all, a moral obligation, and obligation we will owe to the generations who will come after us. It’s maybe especially an obligation for Scotland of course, as Glasgow prepares to host COP26 later this year.
So for all of those reasons we must continue to lead by example, in making that just transition to net zero.
But a just transition, as well as being an obligation also presents huge economic opportunities, that if we do this right we can harness in the years to come.
That’s one reason why helping that transition, is of course the key mission of the still relatively new Scottish National Investment Bank.
And it’s why the Scottish Government will support and work with business – across all economic sectors - to seize those opportunities – they won’t fall into our laps, but if we do this correctly there are opportunities there to be grasped.
More broadly, as we promote economic recovery, we will address areas where we could do better – but we will also seek to build with confidence on Scotland’s main strengths.
Those include low carbon industries and energy – but they also include digital technology, life sciences; advanced manufacturing; and tourism, financial services and food and drink.
We also have an incredible skills base already, and a remarkable generation of entrepreneurs setting up companies in Scotland. Some of the most inspiring events I have attended, since becoming First Minister, have involved those entrepreneurs.
All of these strengths are well-known and they are internationally recognised. That’s one reason why last year, in very difficult circumstances, Scotland was once again the most successful part of the UK outside of London, for attracting inward investment, as inward investment reduced across the UK as a whole, it increased in Scotland, strengthening not just our overall position, but our relative position as well.
But we need to continue to invest, to make sure that we maintain that position, to develop opportunities further and to promote everything that Scotland has to offer. By doing so, we will support a strong and sustainable recovery.
And we can ensure that all parts of Scotland, and all people in Scotland, can benefit from that recovery.
The final point I want to make is about how the Scottish Government will seek to work with you. This always has to be a two way process, but one in which the Scottish Government has to always, take the lead.
I’ve already mentioned the immense difficulties that the pandemic has caused to everyone, but including to your organisations and businesses.
And almost inevitably, given the nature of what we have been dealing with, it has at times placed a strain on our relationship with business.
We have had to set up support schemes as quickly as possible. And we’ve often had to make changes to rules and regulations at very short notice, but that has been in the interest of protecting people’s health and lives.
Very often that has involved striking a very difficult, at times what has felt like an impossible balance.
A few weeks ago, for example, we delayed a decision on whether Glasgow would stay in level 3 or move down to level 2. There was a very good reason for that – we had to base our decision on the best possible data, but we also had to act in a way that protected public health. The delay in that decision of course caused frustration for many businesses, I understand that.
And the point that I’m making here, that is although we have genuinely tried incredibly hard to communicate with the business community – I know the nature of what we have been dealing have meant that at times you may be feeling that communication has not met your needs. I’m genuinely sorry about that, when that happens.
And so I want to reassure you, that we will strive to do better as we move out of the pandemic, to talk to you, to listen to you, and to put the business community and your needs at the heart of our decisions.
In return I ask, is that as you have done by and large over the past year is that you also recognise that the unique almost unprecedented circumstances that government is seeking to deal with and navigate our way through, in the best possible way that we can.
We know that Covid recovery is dependent on economic recovery. And we know that all of you – your businesses, enterprise organisations, third sector organisations, colleges and universities – you are the people who will enable that economic recovery to take place.
So we will do everything we can to strengthen the relationships we have with you.
Events like this are not the whole way of doing that, but I believe they are an important and indeed quite fundamental part of doing that.
I hope that’s reflected in the fact that so many ministers are taking part today.
And I hope it’s reflected in the fact that there are so many of you participating and I am delighted about that.
And it’s why we’ve been keen to allow quite a long time for questions – these events are valuable because they allow us to listen to you – as well as giving us the opportunity to set out our thinking to you directly.
So I’ll finish now as we move on in the agenda - except to repeat once again my thanks to all of you, and to say I look forward to working with all of you, in the months and years ahead, as hopefully we move into happier and better times, and increasingly put the acute phase of Covid firmly behind us. Thank you for listening and I will now hand over to the Deputy First Minister, John Swinney.