Transcript of lecture by Alex Salmond

The Rt Hon Alex Salmond MSP, First Minister of Scotland, gave the Donald Dewar Memorial Lecture on 19 August 2008. The event at Edinburgh International Book Festival was chaired by Brian Taylor, BBC Scotland's Political Editor.

Listen to the 2008 lecture

[In his introduction, Brian Taylor referred to an incident involving a fedora in their days at St Andrews University. Mr Salmond took it from there.]

Well, Brian, thanks very much. I'd forgotten about the fedora — luckily for you. Well actually unluckily for you because I didn't actually have that in my remarks, Brian, and now everybody's heard about it anyway.

Of course in the new Scotland, ladies and gentlemen, we have lots of exercises in Direct Democracy and therefore I'm just going to start with one. Gem — apparently he is known as that because he is a 'gem' — Gem, raise the lights in the auditorium.

[Brian Taylor says:] And they were raised! My goodness! Gee whizz!

Tomorrow I'm going to part the Red Sea.

[Brian Taylor says:] Been done.

It won't stop me doing it again, Brian. It's what the BBC call 'a repeat'.

Now, the exercise in Direct Democracy ladies and gentlemen — you may remember — before Brian overstepped the mark. Who prefers the lights up? Aye, well you have to put your hands up. You cannae vote unless you put your hands up. This is not the Scottish Parliament elections. There's no electronic voting here. Who prefers the lights down? [Pause] Gem, turn the lights down.

University days

Brian spoke the truth. He and I were at university together. There were some kind words there, Brian. And, of course, I deserved every last one of your kind words given my self-effacing, self-deprecating style that you mentioned.

The reason I deserve, indeed occasionally get, praise from Brian is, of course, because Brian has a long memory and he may well remember not the Maoist cap but the fact that I presented him with his first ever journalistic scoop. And therefore I'm responsible, I suppose, Brian for launching you on the road to fame and fortune. Well, fame anyway. I mean, by the time the BBC gets finished paying Clarkson and Paxman there's no money for anybody else.

Journalistic scoop

These were in the salad days, the fedora days — the Maoist cap days. It was 1977. Brian was Editor of 'Iron', which helped enormously in getting us the lead story in our journalistic scoop. [The positioning in the paper was absolutely ...] The story if I remember appeared in a joint byline of ... I can't remember whose name appeared first, Brian. And these things were kind of important because it was a mere five years after Woodward and Bernstein blew open the Watergate scandal.

But the headline, which was later repeated word for word in the 'Dundee Courier & Advertiser', that was on page seven — that was the lead news story in these days: no such thing as anything but adverts on the front page of the 'Courier' in these days — was 'Secret files scandal exposed'. And it concerned, of course, the outrage of Scotland's oldest university keeping tabs on potentially disruptive students. There was a modicum of vested interest for Brian and I in exposing this story, it should be said.

Now, in my defence in my position now as First Minister of Scotland, I now realise, which I didn't then, the huge difficulty this Freedom of Information stuff is. In retrospect I can find and see that it was an entirely sensible precaution. But the university's authorities were dressed up by Brian to look like a major sinister conspiracy. It was only then I think, Brian, that I realised the glittering prizes of journalism lay in wait for you. And I couldn't possibly hope to compete in a field which required such prodigious quantities of completely unscrupulous use of talent.

Incidentally, ladies and gentlemen, some of this passage shouldn't be taken entirely seriously.

Edinburgh Book Festival

But one thing that Brian said is absolutely correct and that is that it's an honour to deliver this year's Donald Dewar Memorial Lecture, just as it's an honour to follow in Donald's footsteps as Scotland's fourth First Minister. I'd like to thank the Edinburgh International Book Festival for inviting me here this evening. I know it's a special year for the book festival, falling as it does on the 500th anniversary of the first book ever printed in Scotland.

The National Library has a fine exhibition of 500 years of the printed word in Scotland — to my knowledge, the first collection bringing together Napier's logarithms, the 'Encyclopedia Britannica' and the 'Beezer' annual. As a loyal Dundee United fan, Brian has read the 'Beezer' more than he's read the 'Encyclopedia Britannica'. In fact you've had quite a few 'beezers' playing for you, haven't you?

But the Edinburgh Book Festival — the largest festival of its kind in the world — is now celebrating its 25th year. We can look with pride at the success. And looking across from Bute House I always marvel at how this part of Edinburgh is transformed. Of all the festival venues I think this is the one that's transformed more than any other. Now as you walk round the book festival you do actually come into a totally different world — quite a wet world, I notice this afternoon, but nonetheless it is absolutely transformed. And of course we can take great heart from the success of Scottish writers enjoying worldwide recognition.

Now, next week, as Brian mentioned, we have the pleasure of welcoming a new literary star to Scotland — albeit a 'well-kent' face — when Sean Connery launches his autobiography. Now, of course, that event has indeed been the draw for the book festival. I realise that those here this evening obviously couldnae get a ticket to the main event next week. However I'll comfort myself by thinking that second billing to Sean — just like fourth billing to Donald Dewar — is no disgrace.

Promoting the Year of Homecoming

Tomorrow I and the Cultural Minister, Linda Fabiani, will be meeting the international media corps who have set up shop and camp in Edinburgh for most of this month. We will talk to them about the continued and growing success of the world's greatest cultural festival. And we'll use the opportunity to give even greater exposure to our plan for Homecoming celebrations next year.

Now I did a national conversation event in Pitlochry this afternoon. And I asked the audience in Pitlochry toon hall how many had heard of the Homecoming. And I was delighted — in fact relieved, because there were several journalists there — that about 80% of the folk in Pitlochry immediately put their hands up. So I think this is something which is capturing the imagination in Scotland. There's a nice booklet that I can arrange for anyone who wants to see …

Next year, of course, is the 250th anniversary of the birth of Robert Burns  — Scotland's national poet — something that by definition happens every 250 years and is therefore something which by definition is particularly special. The national Bard has had a bit of publicity in the last week — not entirely 'on message', I thought — thanks to the aforementioned extremely well-paid employee of the BBC.

Now in the spirit of Homecoming — and I want you to convey this to your colleague, Brian — I don't kick a man when he is busy fly-fishing in Scotland, particularly one who cried on television when he found out he had Scottish ancestry. (I always think that was Jeremy [Paxman]'s most human moment). However I'm merely going to state I've got absolute confidence that in 200 years an' mair of course, there are bound to be — there must be, there certainly will be — international celebrations of Jeremy Paxman suppers …

What is certain is that next year from Burns night to St Andrew's night there will be 100 national events round Scotland, from the south-west of Scotland to Shetland. And five themes — of Burns, of Scottish culture in its broadest sense, of endeavour and science and innovation, of whisky, of golf.

And in the five themes we'll seek to attract the 40 million first, second, third, fourth, fifth, sixth generation Scots round the planet. And their friends — that's about another 40 million. Anybody that's been to Saltcoats on a rainy Sunday will do just fine.

Invite people to visit

There is — and we wouldn't be Scottish if there wasn't — method in our madness. There is a financial goal at the end of this. This is an opportunity I feel to turn what might be a tourist recession next year into a visitor boom. And incidentally, it's not just the festivals of Edinburgh which are booked out next year. I understand that 'The Gathering' — which is one of the big Homecoming events next July — has already booked out the direct flights from Canada and America a year in advance. Now, we'll get mair flights on. Don't worry about that. But it's a good indication that the Homecoming idea is catching fire, not just in Pitlochry town hall but across the planet.

And of course there is a role for each and every one of you, since each and every one of you almost certainly, certainly in fact, has relatives in the 'aerts and paerts' of the four corners of the planet. Encourage them to say that, whatever else they do next year, the 250th anniversary of Robert Burns is a year where they must come and pay us a visit, short or long — as long as possible — but they must come back and join in that national celebration.

Another method to our madness of course is if we make a success of the Homecoming, then Homecoming plus one, Homecoming plus two, Homecoming plus three will probably go pretty well as well. In Homecoming plus five we'll be able to celebrate Chris Hoy winning three gold medals at the Commonwealth Games in Glasgow, having just come out of retirement. So we're reaching out to the diaspora as part of Homecoming. And I'm delighted of course that the festivals will be playing their part in that enterprise.

My Government has great hopes for the Year of Homecoming — for Scotland's culture, for our economy, for our international standing.

Donald Dewar's proudest moments

And I can say, ladies and gentlemen, with total confidence that the pride and ambition of Homecoming would have struck a chord with Donald Dewar, because Donald Dewar was above all a proud Scot.

Born in Glasgow, he was one of a golden generation of debaters trained at Glasgow University — the likes of Ming [Menzies] Campbell, the late John Smith, and my own Special Adviser, Professor Neil McCormick — people who were drawn to a life of very substantial public service.

Donald was an outstanding parliamentarian over more than a quarter of a century as a Westminster MP, his time in the Cabinet, as First Minister of Scotland. But for all his many achievements, I'm sure, I'm certain that Donald's proudest moments surrounded his return home — in helping to reinstate the Scots Parliament and of leading this country as the First Minister. He was certain that the gaining of autonomy for Scotland would only strengthen this country and its people and that Scotland's potential would grow and strengthen as time went on. And so it is proving.

And I think in Scotland today we see a country not intimidated by its present constitutional position. We see a restless nation in the best sense — a new energy, a new confidence, a people and a Parliament joining with a new ambition and looking forward I hope to the possibilities of future constitutional change.

Devolution referendum campaign

Now, Donald and I were never close friends. The nature of the competition and politics between the Labour Party and the SNP would have made that impossible. However we had one brief period - but I think quite a significant period — of very close co-operation in the run up to the Devolution referendum of 1997. Brian alluded to that period in his introduction. And it was not just remarkable that Donald Dewar and I managed to, as it were, stay together in that campaign. Because believe me there were plenty of people — not Brian, of course, but his more unscrupulous colleagues — who took great fun and delight in trying to prise us apart.

And the reason we managed to stay together is that, despite the fact we had different objectives for the future of Scotland, we agreed to state that the Scottish people would determine the future of Scotland. And if we stuck to that point - that these matters would be determined by the people of Scotland — then no attempt by the nefarious press corps of Scotland could drive us apart. And we stuck to that right through the referendum campaign and stuck to it successfully.

I remember at the very start of the campaign — just to show you how close the co-operation was — Donald had had a blow of a suicide, a tragic suicide of a Labour Member of Parliament. And there was a suspicion, more than a suspicion, that some infighting had been a contributory cause of the poor gentleman's tragic end. And this was on the day that we were meant to be launching the Devolution referendum campaign.

Understandably, and they were doing their job, the Scottish press corps leapt in to pressurise the Secretary of State on aspects of the tragedy. And I felt it was my duty to move in between Donald and the Scottish press corps to say in as convincing of terms as I could: 'All parties go through phases like that. This is something that can happen in any organisation at any time.' While meanwhile I was thinking I can't quite remember circumstances ever quite developing like that.

But nonetheless it was an alliance which stood the test of a turbulent campaign with many eventualities, including, for example, the death of Princess Diana, which could have blown it off course. But I found that period of co-operation with Donald Dewar extremely fruitful, not just in terms of what we managed to do together but also extremely fruitful in terms of what it made possible for Scotland.

I like to think that beyond Party interest ... and incidentally, Party interest is not a mean or unreasonable thing for a Party leader to consider. It is actually something which is the duty of a Party leader to consider. But beyond Party interests, we were convinced (Donald Dewar and myself) that the joint campaign in the referendum was in the national interest. It was simply, ladies and gentlemen, the right thing to do.

Indeed Donald once said later to a real friend of his, Lord Elder, that the process of Devolution was like 'holding on to the back of a tiger', but it was 'the right thing to do'.

Opening of the Scottish Parliament

He delivered many fine Parliamentary speeches, but I think without any question the outstanding speech was at the opening of the Scots Parliament on the Mound. That's the first official opening of the Scots Parliament. And I just want to read you a small section of that speech just to understand the scale and the quality of what we're talking about. Donald said this. He said:

'This is about more than about our politics and our laws. This is about who we are, how we carry ourselves. In the quiet moments today, we might hear some echoes from the past. The shout of the welder in the din of the great Clyde shipyards, the "Speak of the Mearns" with the soul in the land, the discourse of the Enlightenment when Edinburgh and Glasgow were a light held to the intellectual life of Europe, the wild cry of the great pipes, and back to the distant cries of the battles of Bruce and Wallace. The past is part of us. But today there is a new voice in the land, the voice of a democratic Parliament, a voice to shape Scotland - a voice for the future.'

Now ladies and gentlemen, there is nothing of Party or faction in these remarks. It's a call to history in order to face the future — the sense that Scotland as a nation has the maturity and confidence to calmly weigh the arguments and make our own choices.

Now, we often think — and I often think of these choices when I talk about the right of the Scottish people to choose — I think of these choices as being about the constitution. But the choices actually are about everything that touches every area of our lives — education, health, social services, culture. And my argument is as people consider these choices on these practical issues then the case for having maximum control, the maximum available autonomy that you can have, becomes irresistible — the linkage between the constitutional aims and ambition, and the bread-and-butter issues.

Now, tonight I want to illustrate this by talking about one subject — a subject which often is considered by political writers, by analysts, to be beyond the scope of the Scottish Parliament. And it's understandable that it is. A subject which many would argue right now is at the mercy of international events or indeed the policy mix from the Treasury.

But even here on the economy — for this is what I want to speak about tonight — we have the ability if we so choose to impact on our circumstances. Not completely of course but substantially in a way which would not have been possible without a Parliament and indeed without a Government.

Scotland had a number of very substantial Secretaries of State for Scotland. Not as many as we should have had. We had a number of very insubstantial ones as well. But we had a number of substantial ones. But even the best of these had difficulties in doing what is now available to us, even with limited powers in the economy.

Past Secretaries of State for Scotland

If we take Tom Johnston for example — the post-war Labour Secretary of State - Tom Johnston had a vision, had many visions actually, but one vision was to harness one of the natural resources of Scotland, the water of Scotland and to convert that into power for the Highlands — to bring the Highlands communities into the 20th century using that endowment from hydropower to stimulate the economic development of these parts of Scotland. It was a fantastic vision.

Willie Ross, strong Secretary of State in the 1960s and 1970s. Apparently he was called 'Basil Profundo' — I think that was Harold Wilson's pet name for him. But Willie Ross used to thump the Cabinet table and demand a greater share of regional policy otherwise the Nationalists would run all over the Labour Party of Scotland. And that was his basic weapon to extract concessions for Scotland from the Treasury.

George Younger, in more recent times. George Younger was a substantial figure, in my opinion, who sought to as far as you could — and he had a boss, a Prime Minister, who although some people say to the contrary must have posed some difficulties in working for, I think — but George Younger, as far as he could, sought to shelter the nation, the country, from what he regarded perhaps as the policy excesses of his own boss.

But none of these people however substantial were in a position to respond to, never mind to shape, big economic challenges, however substantial.

And Tom Johnston by repute, by legendary repute, used to have his resignation in his top desk drawer, and let Churchill know that the resignation was in the drawer. And if he didn't get his own way on certain things then the resignation would be coming out. And Churchill, who right through the war time was fearful of an uprising in the Red Clydeside — as had happened in terms of industrial action in the First World War in which he'd been involved — gave sway to Johnston and gave him latitude over a number of things.

But despite the fact that these were big figures, they didn't have the same scope as we now have to attempt, to shape, and to change and to affect our environment. They were at the end of the day 'place people' of the Prime Minister. They were not elected on a democratic mandate. They had the ability or the right or the discretion to pursue distinctive policies in the interests of the people. They could lobby, they could campaign, they could make achievements, they could protect, but they hadn't the democratic authority in which to develop distinctive policies for the country.

Economic challenges

Now we face, as a country, economic challenges. And some of these we face in common with the western world. We also face a situation where our determination over macro-economic policy, over the setting of interest rates, over the fiscal balances, is extremely limited. But nonetheless I think it's right and proper that the Government — that is, the Scottish Government — commits itself to focus our efforts towards a single overarching purpose of increasing sustainable economic growth in Scotland. And that applies in these tough times even more than it's pertinent in easier times.

So we'll do our utmost to support and sustain economic growth — to work with the UK Government to relieve the pressure on households and businesses across the country. And more than that, I want to restate a basic contention of the Government that there is every reason to be confident in the future of the Scottish economy, our workforce, our businesses and this country's ability to define and seize new economic opportunities.

Now, all of us this evening are familiar — whether from Scotland or from much further afield — of the global slowdown, increasingly of potential recession.

I was in America last year, last autumn, when the 'R' word — the 'recession' word — was first used by a major public policy official. Last week we heard the Governor of the Bank of England use the 'R' word for the first time as a major official. Growth in the advanced economies is faltering. In the euro area, output has fallen — albeit slightly — for the first time since the inception of the single currency. Growth in the United States remains marginally positive, but inflation is rising sharply.

Having said that, the recent depreciation of the dollar is an indicator that the aggressive interest rate cuts have underpinned confidence in the economy — that the woods are still dark and deep, as anyone here with stocks in the United States market will know from the events of this afternoon. Meanwhile the Governor of the Bank of England has said that growth in the UK could be flat in the coming year. The 'R' word has now been mentioned by the Governor.

The impact of the global credit crunch affecting financial markets from the most complex derivatives to the simplest loans and savings accounts and the understanding of it are reasonable well known. The effect of higher prices for key commodities pushes up the cost of household basics — of food and fuel. In my view, incidentally, the impact of that was the determining factor in the Glasgow East by-election of a few weeks ago.

Across the United Kingdom over the last year — according to the Office of National Statistics — petrol prices have risen by a quarter. The cost of food has increased by 10%. And that's fed through to general inflation, currently running at 4.4%. The Governor of the Bank says it will go over 5%.

Resilience in the Scottish economy

So the challenge facing us — and the challenge on which the Scottish government is firmly focused — is maintaining growth and business confidence as inflation has to come back under control and ensuring that this year, next year and beyond, the Scottish economy continues to demonstrate resilience.

And thus far it should be said that resilience in the Scottish economy is encouraging. Economic growth in Scotland has slowed, but it's positive. And it's kept up in the last three quarters or exceeded that of the UK.

Unemployment in Scotland is still declining. Employment is still rising. Unemployment in the rest of the UK is rising and employment is declining. Scottish house prices — as many of you'll know here — it can hardly be said that the housing market is in great condition at the present moment. But it's not in a state of collapse as it is perhaps elsewhere. Prices have still shown a marginal increase since the start of the year. High street spending has continued to grow. Retail sales figures are about 7% up actually on last year in Scotland with much lower increases elsewhere.

The trade figures are good. The export figures are good. In the renewable energy sector in Scotland there's been £2 billion of investment announced in the last four weeks. And among other similar new developments, Scotland's population has reached its highest level since 1983, something for which my Government claims absolute and complete credit. Although I understand there's been some co-operation from other people in the community.

In short, the outlook for the Scottish economy is still positive. We're not insulated from the effects of global slowdown. We are resistant but we're not immune. And you don't have to go too far to see the impacts of the credit crunch - the construction market, the financial sector.

Hopefully some of the bitter pills that are being swallowed now will help medium-term recovery. Despite the recent fall in oil prices, higher energy prices are here for the long-term. That in turn perhaps will support the transition to a lower carbon economy in Scotland, powered by clean and green energy.

Call for Westminster action

But adjustment, economic adjustment — as many families know — can be extremely painful. Now the case I want to make tonight: with active and judicious intervention, the effects can be limited or mitigated. And that can be done even in a context of the Scottish Government having limited economic powers. We have to recognise that much of what we do should be to call on those who are charged with the responsibility to do it. To take more serious action than they have done thus far to boost the economy.

One idea gaining credibility at Westminster at the present moment, supported, for example, by the All-Party Enterprise Committee is a windfall tax on energy suppliers, with the proceeds used to shelter people at risk from fuel poverty. The rational is clear. The big energy companies have made windfall gains on carbon trading schemes. It is reasonable to expect the people to benefit.

There is good news, some good news, for the Chancellor in the higher oil prices. He's getting an extra £5 billion estimated in proceeds for the North Sea. I think it would be entirely reasonable for Scotland to have a share of the windfall gains.

We under-spent — the lowest under-spend in the history of Scottish government, but still an under-spend of £42 million — last year in terms of public sector spending in Scotland. £42 million is not an enormous sum. In fiscal terms it would be very handy at the present moment to help manage the impact on rising energy prices across the public sector.

Fifth, we argue for the UK Government to take serious action in terms of liquidity in the financial system in the housing market. John Swinney, the Finance Secretary, sent a letter to the Chancellor a couple of weeks ago setting out our views and hopes across a range of issues.

There hasn't been much response to date it should be said but I'd be extremely hopeful — given the political imperative generated in Glasgow East, with further political challenges to come — that we'll see a distinct change in direction over this autumn. And action is required if the economy is not to move into recession.

In the times that we're in at the present moment the Chancellor of the Exquecher — any Chancellor of the Exquecher — faces a choice. He can either spend because his ability to lower interest rates is hopelessly limited by the policy committees which have been established. But he can either spend to stave off recession or he can spend to finance recession. I think spending to stave off recession is much, much better.

And particularly at the present moment an attempt to shelter people from rising energy costs would have an effective response both in economic terms, in restricting inflation, and also helping to prevent the economy moving into a wage cost spiral which would be the alternative. There is much to be done, ladies and gentlemen, and it's right and proper that the Scottish Government articulates the actions that are required by those who are charged with the responsibility.

Situation better in Scotland

So the key levers of economic responsibility lie elsewhere. But we have discretion in Scotland — not total discretion, not even majority discretion but still discretion. And we have discretion, which we would not have if we didn't have a Parliament and the Government.

Some of the actions that have been taken over the last year look in balance remarkable for their foresight. Freezing the Council Tax is a rather good thing when consumer spending is taking a hammering elsewhere.

I listen occasionally to phone-ins — sometimes even on the BBC, Brian. And when people south of the border go through the litany of things like increasing food prices, energy prices, Council Tax rises — well, the same things apply in Scotland, apart from the Council Tax rises. And the fact that they don't apply in Scotland is actually one of the reasons, one of the reasons, why retail sales in Scotland look rather better than they do elsewhere in the country.

Similarly, there are 150,000 small businesses in Scotland who are currently benefiting from a reduction or the elimination of their business rates burden. Rather handy when the bills are thumping through their letterboxes in the same way as they are thumping through the letterboxes of individual families in the country. And one of the reasons, one of the reasons, why the employment situation in Scotland looks rather better than it does elsewhere in the country.

But the Government, even with limited taxation power, is determined to do more. We cannot — as a Government in Scotland on a fixed budget — change the scale of Government spending in Scotland. We don't have that ability, no more than a local authority has that ability. That is part of the current constraints under which we operate.

But we can change the timing of certain aspects of that spending. And in life in politics and economics, timing counts for a very good deal. And that is why, this summer, the Scottish Government reviewed what measures we could take quickly to address current financial difficulties.

Programme to help meet challenges

The result of the review is a programme of measures to help Scotland meet the immediate economic challenges, to promote growth, to support business confidence. And of course we will continue to examine, particularly with our partners in local government, what more we can do.

Now, that programme, ladies and gentlemen, has four main aspects:

  • Firstly, to focus capital spending in Scotland to support growth.
  • Secondly, adjusting the planning and regulatory environment to help both businesses and individuals.
  • Third, taking action to boost confidence. The sort of action that's epitomised by the Homecoming initiative for next year.
  • And fourth, alleviating the effects of rising energy prices and promoting energy efficiency.

Now, one of the chief priorities to improve the housing stock in Scotland, a central part of our ambitions which are necessary to improve in the long term Scotland's rate of sustainable economic growth.

A few weeks ago my Deputy First Minister Nicola Sturgeon announced major reforms to deliver lasting improvements in the housing system and market in Scotland. Today, however, or tonight, I want to announce how we are going further. We set out a number of measures in a document published today, in support of affordable homes, first-time buyers, homeowners under pressure from the credit crunch. As a critical part of that initiative, we are bringing forward up to £100 million from our overall 'Affordable Housing Programme', £100 million to be spent this year which otherwise would have been spent in later years. Some £60 million of that can be committed now from Government programmes in line with our Concordat with local government. £40 million will come by agreement with our friends and partners in local government.

The aim is for the whole of that £100 million to be spent this year rather than later. Timing is important. Because when the construction sector is flat on its back, when the housing crisis in Scotland is enduring, what you can do and buy now is going to have much more impact than what it might buy in two years time when times are hopefully easier. So it will accelerate the development of affordable housing in Scotland. It will stimulate activity and help to maintain employment and skills in our construction industry. And the focus is not just on keeping up the supply of affordable housing in the short term, but creating the conditions that will be needed for recovery when market conditions improve.

Similarly we can bring forward expenditure from European Structural Funding. On top of the £180 million we have already committed to spend on the programmes up to 2013, we will ensure that a high share of that spending is front-loaded to support good-quality projects in the next couple of years.

Opportunities for growth

The Government is committed to promoting the enterprise and freeing Scottish businesses to succeed. So we'll intensify the reforms to simplify the planning system in Scotland. We're going to postpone the review of the system of developer contributions to avoid placing new burdens on development at this time.

Scotland's environment is one of our key assets. It's a source of natural capital that can drive broad-based economic growth. Our potential in renewable generation is immense. I mentioned a few seconds ago that in the last four weeks there have been £1 billion of investment announced — private sector investment in the renewable sector in Scotland. But overall our potential in renewable energy generation is estimated at more than 60GW. That is 10 times Scotland's peak electricity consumption.

So we have to put emphasis on setting and applying rules in ways which help businesses to start and promote sustainable growth.

We have to keep simplifying the public sector. Our regulators are coming together to reduce the numbers of visits and inspections. And, together with our stakeholders in fishing, farming and other industries, we have to work to cut red tape where we can. Public sector procurement can help the economy at times like this. We have to boost awareness for local business and improve access to these opportunities. Our distinctive legal system can be a business advantage for Scotland. We've been opening up the market and promoting new international opportunities for a world-class legal service.

Ladies and gentlemen, these reforms show the Government's commitment to sustaining growth and employment. And across the economy we work to support confidence, particularly in sectors of competitive advantage. The tourism initiative in the Homecoming celebrations is an example of that.

In financial services I'll be bringing together the key players — including the mortgage lenders — to examine the scope for easing the supply of credit to households and businesses. In fisheries, a vital industry for Scotland close to my own heart, we have in the last week announced new and targeted support - a £29 million package to support the adjustment to higher fuel prices to promote sustainability.

Increasing energy efficiency

The final strand of the programme, ladies and gentlemen, is important for businesses and households across Scotland — the fact that everyone is suffering from rising energy costs.

We will make it easier for businesses to increase their energy efficiency through the existing range of schemes. We will encourage a greater take-up of available benefits and focus the Scottish Government's own fuel poverty measures on helping the most vulnerable. And we'll discuss with the energy companies ways of increasing the spend in Scotland on the Carbon Emissions Reduction Target initiative. And lastly, we will step up the promotion of 'greener' transport options to encourage less fuel dependency.

The economic cycle

Now, I've gone through these things in some detail because I want to demonstrate that even in a subject like the economy, even in difficult times and tough times, even in an area where we have in taxation terms 15% of control of our fiscal position, there's plenty that can be done, that should be done, that must be done in order to effect and to change our circumstances.

I hope and believe that — whatever the fads and fashions from when Brian and I were at St Andrews University and Socialism worldwide was still regarded as a viable and perhaps even an immediate economic and political option — one aspect has remained in the 'Dewars' from these times as one thing we don't go back to as a dominating theme of economic policy.

And that is the idea that there is nothing that can be done to affect the economic cycle. That the economic cycle is something which is given in terms of overall financial markets. And that the politicians that are elected, the Governments who are entrusted with responsibility are actually helpless victims, as are the people, of these fluctuations in the economic cycle.

I hope we never go back to an age where that is believed with any credibility, because long before the idea of 'planned economies' was being debated there were economists like John Maynard Keynes who argued forcibly and correctly that what Government does or doesn't do - particularly in tough times — affects the welfare and health and vigour of the economy in the future.

That is exactly what we can do in Scotland even with limited powers. That is the direction that we can set ourselves. Clearly and obviously I will continue to argue — I hope successfully — in the near and not the medium term that we should have more power so we can do much more of that. So we can influence our circumstances to a much greater degree.

We have to set ourselves ambitions — certainly by the end of this Parliamentary term — of matching or exceeding the UK growth rate. We've actually done in the last three quarters but because the UK growth rate has been coming down not because ours is going up.

We have to set international standards to emulate the success of other small countries in Europe and match their growth rates. We have to recognise the strengths and resilience that exist among our economy and our people. We've got to maximise our advantages.

And above all as we consider these challenges we should recognise that we would not be in a position to focus and to meet them unless we had that democratic heart beating at the centre of Scotland that Donald Dewar referred to.

A new and confident nation

Other people internationally right now see Scotland not as back-markers but as front-runners. The 'fDi' magazine has identified Scotland as 'Europe's place of the future' over the last few months. They believe in our potential and so must we. There's no doubt that in this decade, since Donald Dewar reopened the Scots Parliament, the nation is growing in confidence and stature.

And today in the Parliament we see a different political culture struggling to emerge. The old lobbying culture, the idea that if only somebody else did something to help our circumstances then our condition would be improved is giving way in my opinion to a more open, flexible, democratic chamber, based on multiple — and sometimes extremely complex, but nonetheless multiple — coalitions of ideas and aspirations.

In our people we see a new ambition, taking pride in its country and its potential. With the confidence to elect a government that has unashamedly put Scottish interests first. Globally we see Scottish companies making strides in the industries and markets of the future — building a platform for future success.

In short, across the whole of society Scotland is moving forward whatever the short-term smoke of difficulties in the economy. In Government, we see these changes and we welcome them wholeheartedly. We welcome the new and confident nation. We are proud to serve it. You have my assurance that we will work tirelessly, in the months and the years ahead, to ensure that all of the country, all of our people, achieves that potential which is so great.

I think, ladies and gentlemen, thanks to the work of the democratic pioneers such as Donald Dewar, that whatever the constitutional configuration of a country we can stand the opportunity to be one of the true successes of the 21st century.


Recording of the 2008 lecture   |   NLS Donald Dewar Lectures page

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