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A timely visit from the First Minister

We have held a few member events over the past five years with Nicola Sturgeon, but this week she spoke with Chamber members for the first time as First Minister in our Glasgow Talks series. Sincere thanks go to Clydesdale Bank and the Adam Smith Business School at the University of Glasgow for their continued support of the series.

It so happened that her visit came the day after the launch of a refreshed Scottish Economic Strategy, so we got the chance to hear directly the First Minister’s thinking very early in the new strategy’s life.

It’s over seven years since the initial Scottish Economic Strategy was set out by the then incoming SNP government, and we’ve been economically thumped in the interim. Despite that the First Minister led the discussion with some positive messages.  The productivity gap between Scotland and the UK has closed – although that is scant comfort in the context of a worsening position with so many of our competitors.  Exports have grown in cash terms by 20% between 2010 and today although we remain heavily dependent on as few as 50 companies for the majority of that trade.  Our stock of businesses is at record levels.  Our inward investment is also breaking records.  Our employment rates bear comparison with our trading partners.

But if there is one issue which the First Minister wanted us to reflect upon it was the price of inequality; and not the social price, no, the economic price.   The strategy argues vigorously that the UK suffers from high levels of inequality and that there is an economic cost involved. The First Minister suggested a nine percentage point shortfall in GDP growth between 1990 and 2010 because of the UK’s record of inequality, using work completed by the OECD. It’s the impact of inequality on reduced educational attainment and skills that causes that gap – a suggestion that does resonate in Glasgow given the sheer number of city residents with no educational qualifications whatsoever.

The balance of emphasis between improving economic growth through competitiveness and tackling inequality may just have taken a shift more towards the latter.  The First Minister pinpointed childcare as a specific example of a policy that might previously have been boxed and packaged as a social policy, which now should be regarded as just as important as an economic policy.  The two need to be seen as much more intertwined.

Investment, innovation, internationalisation and inclusive growth are the four Is of the new strategy. Many of the existing themes of economic development stay in place and the inclusion of a Scottish Business Pledge promoting many of those themes, alongside a focus on the Living Wage, will be treated with a light touch.  The agencies of the Scottish Government are not expected to make radical changes in their approach, but they should have more focus on those four Is.   Glasgow has a prominent role to play as the engine room of the Scottish economy and the city where inequality of outcomes remains a hefty challenge.

The importance of the colleges, the potential of the Living Wage policy, the investments in innovation such as those at the new South Glasgow University hospital, and in infrastructure such as those through the Edinburgh- Glasgow Improvement Programme for rail or the City Deal ; these were all picked out in the First Minister’s speech and in the subsequent discussion with our members.

I’ll take a closer look at the strategy in a later blog, but in the meantime as a Chamber we remain positively and deliberately open-minded - not least since we have from the beginning of the year taken on a member review of the Chamber’s position on the Living Wage, have become the Glasgow Invest in Young People group to encourage the delivery of conclusions on skills development from the Wood Commission, and are carrying out our own review of additional work we can do to support members into export markets. 

We have ambitious aspirations for our members and for our city, and will draw upon any support the new Scottish Economic Strategy can offer.

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