Economy Q&A with Keith Brown

Written by Staff Reporter on 11 September 2017 in Inside Politics

Keith Brown, Cabinet Secretary for the Economy, Jobs and Fair Work on creating a more prosperous Scotland

Keith Brown: Picture credit - Nick Grigg
 
The UK Government has been criticised for creating a low wage economy on the back of efforts to increase employment, how do you aim to secure high quality, high paying jobs in Scotland?
 
It’s true that years of cuts from the UK Government have had a detrimental impact on the wider economy, but in Scotland we have reasons for optimism. We have the highest pay anywhere in the UK, outside of London, and we are the top destination for foreign investment in the UK (again, outside of London).  
 
We also have substantial natural resources, one of the most highly educated workforces in Europe, and a deserved reputation for innovation. We are also world leaders in future key industries, such as financial services and technology, life sciences, creative tourism, and sustainable tourism. So, although we have to face significant challenges, we are determined to face them head-on. We have great foundations to build upon and we’re investing, hopefully, in the future via initiatives like the £500 million Scottish Growth Scheme and our £6 billion infrastructure plan.
 
Is it time to use more stick than carrot to encourage employers to pay a living wage?
 
Scotland is the best performing of all the UK countries in terms of paying the Living Wage, with the highest proportion of employees paid the Living Wage or more – around 80 per cent – and we aim to have at least 1,000 accredited Living Wage employers by this autumn. There is of course much work still to be done, and we are using all powers at our disposal to promote fair pay – by supporting the Scottish Living Wage Accreditation initiative, as well as the Business Pledge and Fair Work Convention.
 
What does a ‘fair work’ agenda look like and are you getting there?
 
As set out in the Fair Work Framework, we believe that fair work is work that offers workers an effective voice, opportunity, security, fulfilment and respect; that balances the rights and responsibilities of employers and workers and that can generate benefits for individuals, organisations and society. We have already made significant progress towards delivering this but recognise more work is needed. 
 
We continue working with the Poverty Alliance to increase the number of employers who pay the real Living Wage; to address barriers to employment and equalities issues through our Returners Programme and Workplace Equalities Fund; and to work with trade unions to embed the Fair Work Framework in workplaces throughout Scotland through our Trade Union Fair Work and Modernisation Fund. Fair work is a key component within our enterprise and skills reforms.
 
Obviously, we have a female First Minister committed to gender equality, how important are women to the economy and how do you ensure parity in the workforce?
 
Female workers are exactly as important to the economy as male workers, and we are taking decisive steps to ensure that they are better represented in senior and decision-making roles, as well as challenging pregnancy and maternity discrimination. We’ve been making progress too, for example, last year the full-time gender pay gap in Scotland was 6.2 per cent, compared to a UK-wide gap of 9.4 per cent. 
 
In terms of leading by example, we also have one of the very few gender-balanced cabinets anywhere in the world – and our First Minister is a signatory to the ‘Women 5050’, which campaigns for 50 per cent representation of women in parliament, councils, and on public boards. We’re committed to ensuring everyone has equality of opportunity across Scotland, no matter their gender or economic circumstances.
 
Are you seeing a Brexit effect already and what are your fears as we move forward?
 
It has certainly created a number of new challenges, and introduced a lot of uncertainty – which continues to cast a shadow over the future economic outlook. In spite of this, we’ve just seen the Scottish economy grow by 0.8 per cent in the first quarter of 2017 – four times that of the UK average, and the unemployment rates have fallen to a record low of 3.8 per cent. I think that’s partly due to the reassurances we’ve been able to give to individuals, companies, and the wider economy – that Scotland remains a good place to do business. 
 
Of course, Brexit remains the single biggest threat to the Scottish economy but we will use all of the powers at our disposal to support the economy, by continuing to invest in infrastructure, by transforming business and skills support, and through our £500 million Scottish Growth Scheme.
 
We have seen many challenges to the Scottish economy, most notably with the slump in North Sea oil and gas, how important is it to create a mixed economy and what steps are you taking to do that?
 
Recent economic data shows Scotland’s economy growing – with a rise in output in industries linked to the North Sea for the first time since 2014 – and unemployment at an all-time low. Encouraging signs from business surveys also signal growing confidence in the oil and gas sector, suggesting that the sector is stabilising. First of all, it should be noted that recent economic data shows that Scotland’s economy is growing and, for the first time since 2014, there’s been a rise in output in industries linked to the North Sea. As a result, businesses in the oil and gas sector have been growing in confidence in recent months – as demonstrated in responses to business surveys. We’re also seeing unemployment across the board – not just in North Sea industries – at an all-time low. 
 
In order to further stabilise and build on that progress, we have committed £500 million to support private business investment. The three-year Scottish Growth Scheme aims to unlock investment for the private sector, which will, we hope, be further stimulated by our multibillion investment plan for improving infrastructure across Scotland, as well as our plan to invest more than £1 billion in improving on the excellence of our higher education sector. So, although there is clearly a lot of work still to be done, there are many reasons to be optimistic, in regards to Scotland’s economic situation at the moment. 
 
Do you still believe that independence is the long-term solution to ensure a more prosperous Scotland?
 
It’s the prerogative of the Scottish Government to do everything we can to protect Scotland’s interests, and that must include the option of independence if it becomes clear it is the best or only way of doing so. If, for example, the UK left the single market but Scotland was able to remain in that market then that could make Scotland a very attractive destination for investment for companies looking for a location with strong links to both the rest of the UK and the EU.
 
Contrast that with the risks to Scottish jobs and incomes posed by a hard Brexit, and it’s clear to see why we can’t rule out the option of independence. Moreover, the people of Scotland should have a choice about the future direction of the country, once the terms of Brexit are clear. However, at the moment our focus is not to seek to introduce legislation for a second referendum, but to do what we can to influence the Brexit outcome, for the benefit of the people of Scotland. 
 
The rise of in-work poverty is surely an anathema to a cab sec with your title, what are you doing to address this?
 
I strongly believe that every employee across Scotland should receive a fair level of pay and have long championed the payment of the real Living Wage as the most effective means of tackling in-work poverty. The Living Wage differs from (and is higher than) the ‘National Living Wage’ in that it is calculated according to the basic cost of living and therefore, takes account of the adequacy of household incomes for achieving an acceptable minimum living standard. The National Living Wage is for 25+, the real Living Wage is paid to everyone over 18 which benefits young people who have been most affected by the UK Government’s austerity measures. 
 
Scotland is the best performing of all four UK countries in terms of both the proportion of the workforce paid at least the Living Wage and the proportion of accredited companies paying it, and I have confidence that we will meet our target of 1000 Scots-based Living Wage accredited employers by this autumn.
The growth of the so-called gig-economy and the need to protect workers in this new employment category is also vital and that is why this government supports a ban on exploitative zero-hours contracts.
 
They say a week is a long time in politics but over the last 12 months we have had an EU referendum, a Scottish Parliament election, local government elections and a general election. How has it been for you?
 
Incredibly busy!  Despite everything else that’s been going on, we’ve made some real progress across a number of areas this year including the soon to be opened Queensferry Crossing, remaining on course to meet our target of 1000 Living Wage employers by the autumn, undertaking two phases of the Enterprise and Skills Review and seeing unemployment hit record lows. But it’ll be another busy year ahead, as there is still plenty to do.
 
What is the naughtiest thing you have ever done
 
Refused to pay the toll on the Skye Bridge.

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