Scotland: creating opportunities for all to flourish

July 8, 2015


The Conservatives may have won a majority in the House of Commons on May 7 2015, but the story of this year's election was undoubtedly the success of the Scottish National Party (SNP), which took 56 of Scotland's 59 seats to become the third largest party in the British parliament. The driving force behind the 2014 referendum on Scottish independence, the SNP has ruled the Scottish Parliament since 2007.

On June 30 we were joined at "Breakfast with the Scottish Government" by Fiona Hyslop, Cabinet Secretary for Culture, Europe and External Affairs in the Scottish Parliament, who has been an MSP since 2011. 

Following a 20 minute speech, the Minister took questions from the floor on a variety of issues including: Scotland's position on the EU; the country's tourism strategy; trade and investment developments; how Scotland engaged young voters in the 2014 referendum; and why the government lowered the voting age to 16.

A full transcript of the Minister's speech is below.

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Good morning ladies and gentlemen I am delighted to be here this morning to meet with you and discuss not only the links between Scotland and Japan but Scotland’s position in the UK and the rest of the world. 

This is my first visit to Japan and I’ve been struck by the warm welcome I’ve received so far. For somewhere so far away from home, there seems to be real affection for Scotland and our role on the world stage.

2014

In fact, I think everyone in and from Scotland, as well as those with an interest in our country, will have been taken with just how much our global reputation has grown in the past year.

In a globalised society, world events affect our ability to operate successfully at home and overseas, in recent years Scotland has experienced significant economic and social change.

2014, in particular, was an historic year for Scotland, a year which captured imaginations and shone an international spotlight on our nation as we held our referendum on independence and hosted major international events, including the Commonwealth Games (we had our best ever medal tally with 53 medals) the Ryder Cup and the International Culture Summit, in addition to our annual world renowned International Festivals and year of homecoming.

These activities raised our international profile and showcased the best of Scotland to a global audience, embodying the commitment we have  made, and will continue to make, to our international engagement; that we lead and participate in external activity that helps Scotland and our international partners to flourish. I’m sure you’ll agree that’s a significant global profile, which has given us a real platform on which build on our already successful international trade & investment activity

The Independence referendum, in particular, captured not just the imagination of the Scottish people, but of people across the globe. Although not resulting in the outcome I wanted, it was a remarkable demonstration of democracy at its best.

The phenomenal 84.5% voter turnout, showed us that people are not indifferent to politics by nature. In fact Facebook confirmed recently that it was the single most talked about event in the UK during 2014. Globally the hashtag #indyref was used in over 5.8 million tweets in the year before the referendum.

People engage, and engage strongly, when they see directly that they have a role to play and that they can impact and affect outcomes.  Individuals across the country - some who had never voted, nor even registered to vote - engaged, sought out information and made their decision – all because they saw what could be achieved.

No demographic more so than our young people. The Scottish Government took the decision to reduce the voting age to allow 16 and 17 year olds to participate in the referendum. These young people could get married, serve in the armed forces and pay tax at 16, so it was only right that they should have a voice in such a monumental decision.

The numbers spoke for themselves. 90% of 16 and 17 year olds in Scotland grasped that opportunity and registered to vote in the referendum.

I am aware that the Diet voted earlier this month to lower the voting age here in Japan from 20 to 18 in time for next year’s upper house election. Given Scotland’s recent positive experience and decision to futher lower the voting age for Scottish and Local Authority Elections, I am convinced that was  a very good decision and one that will benefit Japan for years to come.

Scotland’s modern approach to international engagement

Since my party’s election in 2007 to the Scottish Government, we have demonstrated a strong and enduring commitment to international engagement.

But we also recognise, that to have a good international narrative to tell, you must have the right social and economic conditions at home.

In November last year we published our programme for government which sets out our key domestic priorities to create more, better paid jobs in a strong, sustainable economy, build a fairer Scotland and tackle inequality and passing power to people and communities.

This is supplemented by Scotland’s Economic Strategy (SES) which was published earlier this year, with ‘internationalisation’ identified as an integral strand in helping Scotland build a fairer and more equal society, at home and abroad.

We believe that for Scotland to flourish and engage effectively with the world an internationalisation agenda must address two interlinked challenges.

First, it must address capability at home, through helping our people, institutions and businesses better understand the international environment. By supporting them in developing the skills they need to engage, create and benefit from opportunities available overseas.

Also it is essential we support the development of relationships and partnerships outside of Scotland to ensure that Scotland and our international partners flourish and that opportunities to influence global systems are maximised.

This agenda provides the international framework for Scotland to achieve our four strategic international objectives that we seek to enhance our global outlook to set the domestic conditions for success, we strengthen our external relationships, roles and network, we build our reputation and international attractiveness, boost our trade and investment and encourage engagement with the European Union.

These objectives have been developed across Government and its partners in recognition that specific, focused activity across a range of policy and delivery areas is required to realise Scotland’s economic and wider international ambitions. These plans will be used to target our engagement with specific countries, regions and sectors and seek to embed internationalisation in all that we do.

Current priorities

Our international work supports the Government’s central purpose of creating a more successful country, with opportunities for all to flourish, through increasing sustainable economic growth.

We have sought to embed internationalisation across our areas of competence to ensure that Scotland remains internationally competitive and our people have the skills and attitudes to seize new opportunities and participate in a global world. Promoting and embedding internationalisation is integral to building a stronger, fairer and more prosperous Scotland. As part of this activity we have identified a number of priority areas.

We will continue to invest in our people to ensure they are supported in developing the necessary skills to enable them to engage effectively with the world around them.

As part of this work it is important that we give everyone in Scotland an opportunity to contribute to our society. However, women do face particular challenges when it comes to employment.

Gender equality

In Scotland we are clear that women already make a huge contribution to our economic growth, but we know that many are not able to reach their full potential in the labour market and we are determined to do what we can to address this.

However, women predominate in particular sectors, which are often low paid.  Women are also less likely to start their own businesses, and still remain under-represented at a senior level in businesses. 

Childcare remains a challenge for many families and the struggle to balance working lives and home responsibilities often results in women taking jobs at a lower grade or with reduced pay.

Addressing the challenges women face in the labour market requires a cross-government response and we are taking action across the Scottish Government in a range of areas within the scope of the powers to address these challenges.

The Scottish Government has extended the entitlement to free childcare to 600 hours for 3 and 4 year olds and vulnerable 2 year olds, with a commitment to extend to 30 hours per week in the next Parliament if we are re-elected.

We have taken action to tackle gender imbalance in skills training and further and higher education through Developing Scotland’s Young Workforce.

It is important that we work with a range of partners to encourage more employers to offer flexible working arrangements to their employees.

Work with key organisations to encourage and support more women to start their own businesses; and;

We launched earlier this month our voluntary initiative to encourage all public, private and third sector boards to work towards a 50:50 gender balance on their boards.

Scottish business pledge

The Scottish business pledge, which we launched two weeks ago – is a good example of what we are working to achieve. Under the pledge, companies commit to paying the living wage, currently at £7.85 (£9.15 for London), and to eight other characteristics of a progressive and competitive workplace – for example gender equality, employee participation, prompt payment of suppliers, innovation, and seeking international markets.

The Scottish Government promises that we will do everything we can to help business and support a successful economy. The pledge enshrines the sense of shared endeavor, of common purpose, that we want to build with business.

In the last 12 months we have seen the number of Scots-based Living Wage Accredited employers increase significantly from just 30 to over 200. This is a real indication that employers across Scotland share in our belief that people should receive a fair level of pay. Major companies such as Virgin Money and Glaxosmithkline have already made their pledge. So too has the Scottish Chambers of Commerce. Since 2011 the Scottish Government has been paying the Living Wage.

I’m confident that in the months to come we will see even more.

Government and business have shared goals and shared values. Only working together will achieve inclusive growth, built on improvements in productivity, competitiveness, employment, and fair work. The Scottish Business Pledge recognises that, celebrating success and ambition, and signalling a commitment to work towards a better future.

You can’t make social change overnight – we recognise that.  But the message from the Scottish Government is clear – we want to tackle inequality in all its shapes and forms in Scotland.  We do not believe this is incompatible with our desire for strong economic growth – quite the contrary in fact.  And we will continue to take action where we can to ensure more women are able to make informed choices about careers and to pursue those careers successfully throughout their working lives.

It is also important that we strengthen our domestic infrastructure to increase Scotland’s international attractiveness as an investment location. This includes investing in our transport links and air connectivity, which contribute to facilitating trade, tourism and investment.

Scotland is currently served by direct flights to over 30 countries, however, we are committed to improving both long-haul connections to Scotland and connectivity through world hubs.

We have recently secured control of Air Passenger Duty which will enable the Scottish Government to design a replacement tax which better supports our objective to improve connectivity.

We have already confirmed our intention to reduce APD by 50% within the term of the next Parliament, with a view to eventually abolishing the tax when public finances allow.

It is not just physical connections that are important in achieving our internationalisation agenda; digital connectivity and broadband will unlock economic growth and help tackle inequality. This is why we are committed to deliver world-class digital connectivity across the whole of Scotland by 2020. This improved connectivity will create an economic environment that encourages digital innovation and supports the creation, growth and transformation of businesses that are better able to connect with and compete with their international peers.

Trade and investment

It goes without saying that international trade and investment is vital to grow the Scottish economy. The most recent figures show that in 2013 Scotland’s international exports were an estimated £27.9 billion – an increase of over 7 per cent since 2012. And that’s excluding oil & gas.

Over 60 per cent of all our international exports were attributable to manufacturing sector companies, and increased by 8.2 per cent on the year before. And the largest exporting industry was as in previous years – food & drink.

In fact we export seafood to over hundred countries and whisky to over two hundred. We know that Japanese whisky has received many accolades over recent years for the quality of its whisky. However the quality and diversity of Scotch whiskies, in my opinion makes it the best in the world.

Japan is an important part of our international trade landscape. Today, Japan ranks 18th as an export destination from Scotland. As well as success in food & drink, we’re also seeing success in areas such as life sciences and renewable energy. All areas where know there are particular synergies with Japan, that we are keen to exploit still further.

For example, when it comes to food & drink sector, we know that Japanese are passionate about good food, with their values around premium products, health and provenance. We see some real similarities with what Scotland has to offer here, and have developed a specific strategy to build trade in this area.

This activity is led by Scottish Development International, our international trade arm, which has a network of offices across the globe, including 9 people based here in Tokyo.

Their role is to develop new opportunities for Scotland – both for our companies who want to trade here, and for Japanese companies looking to make investments overseas.

For example, Scotland’s Sensor Innovation Centre, CENSIS, was launched last year to bring together industry and academia to exploit the commercial potential of sensor & imaging systems. It has subsequently signed a strategic agreement with Japan’s Organisation for Future Sensor Technology and Applications, sharing information and best practice subsea exploration, and Japan looks to exploit new sources of energy such as hydrates and rare minerals on the ocean floor.

Equally important is our work in attracting inward investment to Scotland – another area we have longstanding success, recognised at a global level.

According to the latest annual attractiveness survey from professional services firm Ernst and Young, Scotland cemented its position as the UK’s leading location for inward investment outside of London, for the third year in a row.

Backing up the point I made earlier about the importance of 2014 to Scotland, when Ernst and Young launched the report their representative Mark Harvey commented that there was a “halo effect” in terms of inward investment as a result of the Ryder Cup, the Commonwealth Games and also the independence referendum. This is an effect we are now determined to build on.

According to the survey, Japan was the fourth biggest source of foreign direct investment into Scotland in 2015, and accounted for almost six per cent of all inward investment in the country over the past decade. In fact, Japanese companies operating in Scotland currently employ over 5,00 people, and most recently we’ve seen investments from Japanese operations including Chiyoda, Mistui & Co, Terumo, and the Kyowa Hakka Kirin company.

Our longest standing Japanese inward investor is Terasaki Electric,  which came to Scotland in 1972. This is a real success story, with the Terasaki’s Scotland operations continuing to adapt and expand over the decades. and now acting as the HQ for Europe, controlling an extensive agency network spanning Europe, Africa, the Middle East and more recently South America.

As a result, the relationship we have here in Tokyo with the British Chamber of Commerce remains extremely important, and we consider you a key partner in our work in developing Scotland’s trade and investment proposition.

I know that SDI works closely with the Chamber to organise events, share and exchange information and we look forward to continuing this close relationship for everyone’s benefit.

EU

It is important for me to mention here today the European Union. The EU continues to be of significant importance to Scotland, with the benefits of our EU membership clearly outweighing any perceived negatives.

Scotland has been a positive and integral part of the European Union for over 40 years, and indeed we are ancient European nation with trading links going back down the centuries. Engagement with the European Union and its Institutions has been and will remain a core priority for our Government.

But we now stand near a crossroads. The outcome of the UK General Election has resulted in the publication of a UK Referendum Bill, which lays the ground for an In-Out referendum in the UK before the end of 2017. Whilst the Scottish Government made clear in the run up to the General Election that we did not support a referendum, a referendum is now a reality.

We will make the positive case of the benefits EU membership brings to Scotland and indeed the rest of the UK, why it is vital that this membership continues and why it is incumbent on all of us to make the case for continued EU membership as a referendum approaches.

The EU is a vital export market for Scottish firms – accounting for almost half (46%) of Scotland’s international exports in 2013 - worth a massive £12.9 billion each year. 

Much of that is due to the skills of our workforce and the quality of life that we can offer – but for many investors, our EU membership is a vital selling point.  Around 40 per cent of the 2,100 foreign-owned companies in Scotland in 2013 were owned by firms based in the EU.

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