Standing up for Scotland

Prosper chief executive Sara Thiam gave evidence on the UK Industrial Strategy to the House of Commons Scottish Affairs Committee on behalf of our members. Speaking alongside Dave Moxham, of the STUC, she highlighted key challenges and opportunities.

We believe that membership of the advisory council advising the UK government on the development and delivery of its industrial strategy should include at least one member drawn from the Scottish economy.
It needs to be supported by a mechanism which links to business, academia, trade unions, local government and third sector organisations based in Scotland. Prosper, which is Scotland’s industrial strategy advisory council, stands ready to play its part.

Asked to address the Scottish Affairs Committee at Westminster, I highlighted the following:

• Scotland has real strengths in emerging sectors with world-class clusters in energy transition, tech (AI, robotics, critical technologies) and life sciences (pharma, aquaculture and animal health).
• Existing industries can be protected and nurtured by building a positive environment for growth – which must include a stable operating environment and tax and regulatory policies to encourage organisations to invest, recruit and innovate.
• Growth plans work best when they are co-designed and delivered by industries in partnership with government. Both governments need to set out how they will support plans for growth in harmony with one another.
• Defence can act as a key engine for economic growth if we increase the percentage of spend going to supply chain SMEs and technology clusters while we also work together to secure investment, strengthen links with Scottish research institutions and invest in training.
• Housing is a critical enabler and requires focus along with cross-cutting opportunities like the circular economy, nature restoration and sustainable buildings.
• Excluding the Scotch whisky industry from the strategy is a mistake. It is second only to energy in terms of productivity in Scotland and the spirits sector has been a high priority in trade discussions with the US and India.
• Current oil and gas policy is placing a clean power future at risk. Oil and gas revenues are vital for SMEs in the clean energy supply chain. As production falls, so does business for firms in that supply chain, as recent job cuts have made clear. Over 40% of companies in this area have reported a declining business environment and spending is forecast to fall by 20% in the next five years. Lower production and economic activity will reduce tax revenues from the North Sea and, without policy changes, these will decline faster and further.
• Focus seems to have shifted from a wider rebalancing of the economy and increasing productivity in all regions to building growth corridors e.g. Oxford-Cambridge, Greater Manchester-Liverpool, Edinburgh-Glasgow. Greater visibility of those plans is needed.
• Scotland’s city regions risk falling behind as trailblazer devolution deals for city regions in England give them greater control over infrastructure and skills investment and the ability to attract investment to projects at scale.
• City region and regional growth deals have created regional partnerships across Scotland and have attracted investment from the public and private sectors. But discussions have tended to be about specific projects rather than broader strategic growth. The deals will come to an end over the next decade but – as yet – there are no replacements for them.