Scottish Secretary speech on driving economic growth in Scotland

Speech at the University of Edinburgh setting out how Scotland has the potential to be the engine room of UK growth.

"Thank you for having me today

And can I begin by thanking Chris Deerin and Reform Scotland

for helping us bring such a great audience together for the event.

I look forward to speaking with Chris later and taking some questions.

And thanks to both Chris Murray, MP and Christina Boswell, Vice Principal here at University of Edinburgh, for their kind introductions.

And for welcoming us to the Informatics Forum at Edinburgh University,

home to AI excellence since 1963!

1963 - the same year that Prime Minister, Harold Wilson, delivered his “white heat of technology” speech.

And that speech could be delivered today given the pace of technological change and the huge opportunities with AI. Of course, this university, with the passion and expertise of Christina and her colleagues are driving this agenda.

This university will be at the heart of the government's AI strategy.

The implications for industry, our economy, government, services and society are unlimited and we must grab this with both hands.

I've just visited the robotics lab downstairs and it's mindblowing.

Harold Wilson, of course, warned his audience that if the country was to prosper a “new Britain” would need to be forged in the “white heat” of this “scientific revolution”.

History is indeed repeating itself. 

The AI revolution is happening as we enter a golden age of opportunity.

And Scotland should and will be at the heart of it. Thank you for all you do Christina.

I came to this university as a fresh faced 16 year old,

straight from 5th year at Wester Hailes Education Centre

as the first in my family to go to university.

The Lothians Equal Access Program for Schools was my entry point to this university,

and the gateway to a different life.

The support of dedicated, inspiring and role model teachers at WHEC,

alongside the chance to study here are the reasons I'm able to make this speech today.

The power of education to tear down societal barriers should never be underestimated.

We hear a lot about attainment gaps and Scotland's failure to close them. 

And I promise that is no statistical abstraction or political point to score.

It is about the life chances of every child in Scotland,

and until it is seriously addressed then, make no mistake,

it translates directly into the waste of human talent and denial of opportunity that currently holds Scotland back.

Whether it is an apprenticeship, re-skilling, a degree, a postgraduate qualification,

or simply giving a wee boy from Wester Hailes a chance,

education and training are the biggest and best investments we can make in our economy and our society. 

At a conference a few weeks ago I outlined my own journey from growing up in a council estate,

to sitting down at the Cabinet table in Keir Starmer's government.

That's a journey that took many twists and turns, from the Codfather Chippy to the Edinburgh Festival.

I had a long career in business and as an entrepreneur before getting into politics.

I actually almost didn't get into university because I was so bad at the drums.

I was set to fail Higher Music with aplomb!

My music teacher pulled me aside and persuaded me that if I wanted any chance of getting into uni, 

I had to sing instead! 

And no… it wasn't the Hearts song

So after all of that, when I finally sat at that Cabinet table

and looked around at the faces that made up the most working class Cabinet in history,

I thought of my parents.

I haven't often talked about this, but my father passed away when I was nine.

My mother raised two boys on her own, working multiple jobs to get by:

Woolworths as a cleaner; the Busy Bee Bar as a cook; a bookies as a cashier.

She worked these jobs because she wanted to give her boys the best possible opportunities in life.

Sitting down at that Cabinet table for the first time I made a promise that every decision I make in government will be in service to working people.

A government of service.

I learned a lesson from those years to take into my job now.

My mum wasn't afraid to roll up her sleeves to get things done.

Neither am I - and neither is this government.

And we have had no choice.

But I am proud of how our Plan for Change has already started to work:

The biggest upgrade in workers rights in a generation

an industrial strategy to make sure we can take advantage of the jobs of the future:

GB Energy, publicly owned, headquartered here in Scotland

Glasgow City Region chosen as one of the priority investment areas for the National Wealth Fund

£1.4 billion in local growth spending across Scotland

Harland and Wolff saved thanks to a deal brokered by the UK Government, with sites in Arnish and Methill in Scotland protected 

And of course, the announcement from our Prime Minister that we will allocate £200 million from the National Wealth Fund,

to drive investment in a viable industrial future for Grangemouth.

Delivered after the Prime Minister asked me and the Scotland Office to lead a cross-government taskforce to make it happen.

Grangemouth was the first issue on which I was briefed on as Secretary of State.

In just eight months, we have put together a plan for the future.

That £200 million is a signal that this government does not see Grangemouth as a political problem to be solved,

but a huge opportunity for industrial renewal.

And on top of all that, we have delivered the largest budget settlement for the Scottish Government in the history of devolution.

An end to austerity - we promised it in the manifesto and the budget delivered it.

That's how we fix the foundations, deliver our Plan for Change and begin to turn things around for Scotland.

Turning things around will take time, but I know a thing or two about the hard graft it takes to do that.

My journey from Wester Hailes to Westminster included time working as a small business owner and entrepreneur.

I was broadcasting on the internet years before YouTube.

I was doing live televised karaoke before Pop Idol was even a glint in Simon Cowell's eye.

I was doing festival events and concerts,

I refurbished and re-opened a derelict hotel in West Linton,

opened a bar in Newington,

and sports bistro in Edinburgh city centre.

It's amazing what you learn in a tough industry like hospitality.

Being a small business owner means you have to turn your hand to everything,

from pulling pints, to cleaning toilets.

Though thankfully not always at the same time!

I know the ups and downs of running my own business.

More than once, I had to put the staff wages on a personal credit card,

because no matter how hard it got, the team came first,

they needed to pay their bills.

That's why, by the way, I am so proud of this government's make work pay agenda.

Boosting the minimum wage, 

banning exploitative zero hour contracts, 

ending fire and rehire, 

day one rights for workers.  

As a former business owner let me be clear:

page one, line one of your business plan should be how you will pay your staff properly.

More security and better pay for working people will help drive growth.

It's good for workers and it's good for business.

It drove growth in that West Linton Hotel.

By working together we turned things around.

That once derelict hotel is still thriving.

There are derelict hotel stories in every community and every sector right across Scotland.

I think of that when I consider how this government has reset the relationship with the Scottish Government.

And we are starting to see fruits of that productive relationship  - such as bringing the Commonwealth Games to Glasgow.

And in the range of areas where the Scottish Government has accepted the UK government  legislating in devolved areas,

to deliver change, faster.

On tobacco, renters rights, public railways, children's protection and more.

Too many people are keen to suggest this reset is “over” at the first sign of political disagreement. 

It doesn't work like that. 

These are different governments,

Led by different political parties with different priorities and policies.

But just because we don't agree on everything,

doesn't mean we can't agree on anything.

I am certain that the single most important outcome which Scotland's two governments should seek,

is economic growth.

Growth with a purpose.

to raise living standards, improve public services,

and tackle the unacceptable levels of poverty that continue to scar our communities.

Scotland can be the engine room of UK growth.

We have so much potential.

Potential that for too long has gone untapped,

World class universities,

advanced manufacturing,

food and drink,

life sciences,

Financial and professional services. 

And the government will leave no stone unturned to unleash that potential.

Tearing up red tape,

harnessing the power of Artificial Intelligence to boost productivity,

and delivering a proper industrial strategy, developed in partnership with businesses and trade unions.

But delivering economic growth for Scotland is not something either of Scotland's governments can do alone.

It requires partnership and co-operation.

Because the alternative costs us dearly.

If Scottish growth had simply matched the sluggish UK growth in the last decade our economy would be nearly £10 billion larger.

That is why we need a decade of national renewal.

I know the will is there across Scotland's cities, towns and villages.

I know the will is there in Scotland's businesses and trade unions.

I know the will is there in Scotland's third sector and charities.

People up and down the country are full of enthusiasm and ideas for how to make their communities flourish.

I was intrigued to read last week the leader of Glasgow City Council call for a ‘devolution deal' for the city region.

Not just money but powers too.

This was echoed in a recent meeting with the Edinburgh region growth deal partners,

who are calling for more powers over skills and transport.

Devolution of powers to local communities.

Just look at the impact an empowered Mayor has made to Greater Manchester.

From 2014 to 2022 the Greater Manchester economy grew by almost 50%.

If the Glasgow City Region had achieved that same level of growth,

it would be £7.7 billion larger today.

That's an awful lot of jobs and opportunities lost.

And we can see the real world impact on the high streets of Scotland's towns and cities.

As an entrepreneur, it's painful to see boarded up shops and shuttered restaurants which once represented someone's dreams and a community's promise.

That's something both governments should be coming together to sort out, by empowering local communities with place based growth. 

That place based growth is central to our Plan for change. 

Money and power needs to be pushed out to communities,

To give them all a fair kick of the ball,

and create their own jobs and investment.

And the single biggest opportunity to create good jobs is ensuring that Scotland wins the race to clean energy.

With GB energy located in Aberdeen, and billions of pounds of investment on the table we need to grasp those opportunities.

Re-skilling and retraining our workforce will be key to delivering a just transition,

ensuring the job opportunities of the future are accessible to all.

And when I think about the future, I think of my daughters.

Zola, aged four years, and Lois just five weeks old. 

The jobs and careers they will enjoy have likely yet to even be invented.

(although Zola does want to be a police officer)

Businesses and unions constantly tell me they worry about the skills landscape in Scotland.

The Fraser of Allander Institute found a quarter of employers report vacancies,

with 31% of these being classified as skill-shortage vacancies, up 10 per cent from 2020.

We won't grab these clean energy jobs for Scotland unless we equip our young people,

and our existing workforce with the skills to do them.

Now we gather today, at the end of Scottish Apprenticeship Week.

Apprenticeships and further education should be at the heart of how we take advantage of the race to clean power.

There are 8,000 fewer college places today than there were just last year.

Those places are at their lowest level in nine years.

Just last week we saw that the attainment gap in Scottish schools between the richest and the poorest kids has widened again.

Everyone deserves the opportunity and dignity that comes with good work. 

Yet Scotland's rate of economic inactivity is above the rest of the UK. 

That's people out of work, and not looking for work for various reasons. 

If we simply matched the UK average, we would get over 40,000 people back to work and generate millions more for our economy and communities.

The UK Government's £240 million Get Britain Working Plan will overhaul Jobcentres so they focus on skills and careers.

We need to see the Scottish Government engage with that plan and help us make it work.

One of the reasons why Scotland's inactivity rate is higher,

is because more people in Scotland are out of work due to ill health.

Many of those people want to work, but can't.

And far, far too many of them are stuck on an NHS Scotland waiting list.

As it stands, NHS waiting times are one of the biggest blocks to growing our economy.

Almost 300,000 Scots are out of work and not looking for work because they are either temporary or  long term sick..

Over 700,000 Scots are on an NHS waiting list for treatment.

Cut NHS waiting lists and you will grow our economy.

A record settlement from the UK Government for public services in Scotland should deliver that. 

I know that some of the decisions the UK Government took to fund that record settlement have been difficult and won't please everyone…

but we live in a world where 100,000 Scots have been stuck on an NHS waiting list for more than a year,

28,000 Scots in the past 18 months have been forced to go private for health care.

That is an unacceptable situation and we make no apology delivering the funding our NHS needs.

Scotland has a proud industrial past,

and we can have a bright industrial future, which delivers jobs and wealth for families for generations to come,

but only if we get the race to clean power right.

For too long Scottish workers missed out on the work.

Now I worry a new generation will miss out on the skills.

As my wonderful Scotland Office ministerial colleague and friend, Kirsty McNeill, often says:

“We feel it in our bones.”

It is why we believe in delivering the kind of economic growth that delivers jobs and opportunities for working class people and communities. 

And one area where those jobs and opportunities could be created, is nuclear power.

The Scottish Government has a long-standing opposition to nuclear power.

That is their prerogative, but doing so means investment, jobs and opportunities for Scottish communities will continue to head south.

Both Hunterston in North Ayrshire and Torness in East Lothian are prime spots for development.

They have made fantastic contributions to the Scottish economy in the past and they can do so again in the future.

For Hunterston, that could be 800 new jobs with £50-60 million in direct local wages. 

For Torness, up to 1,000 jobs with £100m in direct wages.

Together it would mean tens of millions of pounds being paid in business rates. 

My message to the Scottish Government today is simple:

stop blocking this investment, allow those jobs to be created, and let that revenue flow into Scotland.

And crucially - please work in partnership with the UK Government to deliver it.

Nuclear power stations aren't built overnight.

But they are an investment in our future.

And another long term investment, for which our country is crying out, is aviation infrastructure.

Or to put it simply - runways.

I'll be clear - I support a third runway at Heathrow. 

It is a huge opportunity for Scotland's economy and a massive opportunity for our Brand Scotland agenda,

to sell Scotland to the world.

Most passengers leave Scotland on a plane, not knowing that beneath their seat are crates of Scottish salmon and whisky. 

Connectivity to get our world leading goods overseas is critical as an enabler to growth.

But incredibly, Scottish exports as a percentage of GDP lag behind the rest of the UK. 

The Scottish Government's export target is to increase the value of Scotland's international exports to 25% of GDP by 2029. 

But that would still leave us behind the rest of the UK,

and missed opportunities to improve connectivity to our own airports is partly why.

It was the current First Minister himself who cancelled the Glasgow Airport Rail Link, over 16 years ago in 2009. 

That was a missed opportunity for growth,

given Glasgow Airport already adds over £1.4 billion to the Scottish economy and supports 30,000 jobs.

It is incredible that in 2025 you can get a direct train from Glasgow Central to Manchester Airport, over 200 miles away.

but not to Glasgow Airport, just a few miles from the centre of Scotland's largest city.

We need UK and Scottish government cooperation, to ensure that all Scotland's airports, 

including the publicly owned Prestwick Airport,

makes the most of Heathrow expansion, and have a proper strategy to drive economic growth.

The UK industrial strategy identifies eight growth driving sectors, and Scotland can benefit from all of them:

advanced manufacturing, clean energy industries

creative industries, digital and technologies

financial services, life sciences

professional and business services

and most relevant this week - defence.

The decision to increase defence spending to 2.5% of GDP is an act of generational leadership from our Prime Minister.

as we chart a new course in an uncertain world and do what is necessary to defend our country and our continent.

National security is the first duty of any government,

but that increase in spending also represents a massive industrial opportunity for Scotland.

More than £2 billion was spent by the Ministry of Defence in Scotland last year,

the industry in Scotland employs more than 30,000 people, including 1,500 apprentices.

The role must be to defend our nation,

to stand in solidarity with our European partners,

and to help Scottish industry lead the way in defence technology and manufacturing.

On this issue, at this crucial time, we need cooperation between Scotland's two governments,

and I am determined that it should happen,

in our national interest.

So on these issues: skills, nuclear, aviation,

infrastructure, defence, and employability,

I will reconvene the Scottish Business Growth group

co-chaired by me and the Deputy First Minister. 

We will bring together voices from across Scottish business, industry,

trades unions and civic society,

to find a way through these challenges.

It will be Scotland's Growth Commission.

Last year heralded a new era for the Scotland Office.

An era of delivery.

An era that will grasp the new golden age of opportunities for Scotland.

The vast majority of Scots want their two governments to work together to increase living standards and improve public services. 

Under my leadership, that is what this Scotland Office is determined to do.

Since the election last July, I have completely reformed and restructured the department,

so it can deliver the government's missions for Scots.

This new direction for the Scotland Office will have four strategic priorities:

economic growth

green energy

Brand Scotland

and tackling poverty.

This new Scotland Office is the UK Government's delivery arm for Scotland

and Scotland's window to Whitehall.

We will deliver economic growth. 

But growth with a purpose: 

to reduce and one day eradicate the poverty which scars our communities. 

Taking advantage of our enormous green energy potential and our world class brand to get there.

So as we enter a third era of the Scotland Office post devolution, 

I am reminded of the words of a Scottish Secretary from long before the devolution era, the great Tom Johnston, who wrote:

“…if only we could lift great social crusades like better housing and health from the arena of partisan strife,

what magnificent achievements might yet be ours.

“In unity lies strength: in concurrence, the possibility of great achievement in better housing, 

better health,

better education, better use of leisure,

greater security in income, and employment.”

That is a lesson that the Scottish public have been demanding both their governments learn. 

And that lesson is the path to deliver better living standards and ensure that

plenty more boys and girls

from communities like Wester Hailes,

and from all over Scotland, 

have the opportunities in life that can lead them to the Cabinet table.

That is my motivation.

That is my ambition for Scotland. 

Thank you for your time this morning."