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Enterprise Culture
A debate on the
subject of growing an enterprise culture.
The
Presiding Officer (Mr George Reid):
The next item of business is a debate on the subject of growing an
enterprise culture. The debate will be concluded without any questions being
put.
The Deputy Minister
for Education and Young People (Euan Robson):
I am pleased to open this subject debate this afternoon. I am joined by my
colleague Allan
Wilson, the Deputy Minister for Enterprise and Lifelong Learning,
who will close with an outline of the many ways in which the Executive is
working with Scottish business and higher education to promote growing an
enterprise culture in Scotland.
The Presiding Officer:
I call Allan Wilson to wind up the debate.
I would be grateful if you could manage to wind up in 10 minutes, minister.
The Deputy Minister
for Enterprise and Lifelong Learning (Allan Wilson):
It will take me much less than 10 minutes to demolish the arguments of the
Opposition.
I have to admit to Susan Deacon that I am sort of responsible for the
subject of today's debate. I wrongly thought that, by choosing a subject
such as how we can grow an enterprise culture, we could create consensus in
the chamber that doing so was a good thing. Like Susan Deacon, I have been
extremely surprised by the negativity that has been displayed by the
position.
The idea that our young people are leaving these shores in droves, as John
Scott said, is absolute nonsense. Similarly, Brian Adam's assertion that we
consistently under perform in relation to the rest of the UK is also
nonsense when examined in
the context of the most recent quarterly economic survey, which shows that
we outstrip the rest of the UK's economy by a factor of two.
I will quote a relevant statistic in relation to the city of Aberdeen, which
Brian Adam represents. Aberdeen's mean full-time earnings for the period
from 1999 to 2003 stood at £525 a week, which is greater than that of any
other city in the UK, with the exception of London. Aberdeen is the city
that Brian Adam purports to represent, but he obviously knows nothing about
the economic circumstances that prevail there.
Brian Adam:
The minister is right to say that Aberdeen is successful, but that is in
spite of what the Executive does, not because of it. Our ambition for
Scotland is that successful places such as Aberdeen should have their
success reinforced, so that they can greatly contribute to the economy of
their areas and the country. The fact is, however, that there are large
pockets of unemployment in Aberdeen and the Executive is not addressing that
need. In fact, recently—
The Presiding Officer:
Not a speech, please.
Brian
Adam: I am trying to
help the minister out.
The
Presiding Officer: I
am sure that he can look after himself.
Allan
Wilson: It appears
that, in contrast to the position two minutes ago, we now all agree that
Aberdeen is a success, as is Scotland. Since 1997, 180,000 jobs have been
created in Scotland. I remember the dark days of the Tory Government, which
saw 3 million unemployed and growing poverty and deprivation.
John Scott:
Will the minister tell us how many of those 180,000 jobs have been created
in the public sector?
Allan
Wilson: I will come to
Murdo Fraser's obscure point that growth in the public sector does not help
to grow the private sector. I do not believe that to be the case.
We have created 180,000 jobs here in Scotland since the election of the
Labour Government — 170,000 since the Scottish Executive came into office —
and it has to be said that that compares favourably with the Tories'
economic record. The Tories used unemployment as a tool of economic
management. They told us that we could never return to the days of full
employment, but I tell them that they were wrong. We stand here as proof
positive of that fact.
Murdo
Fraser: Will the
minister give way?
Allan
Wilson: No. I would
like to make a bit of progress. I will come back to Murdo Fraser.
We recognise what progress is. We do not stand for regression. There is no
going back. Progress is about going forward in this debate, in Scotland and
in the economy more generally. That is why growing an enterprise culture is
so important.
For the benefit of the Opposition parties, which do not believe that we have
policies that can help to create an enterprise culture, I refer members to
"The Framework for Economic Development in Scotland" and "A Smart,
Successful Scotland". As a prerequisite for participating in debates on the
economy in Scotland, Opposition members should read those documents; we
might then take seriously some of the comments that they make on them.
Stewart Stevenson:
On entrepreneurship in
the rural economy, has the minister had an opportunity to read today's
Business Bulletin? It refers to 70 items of secondary legislation, 24 of
which appear to bear on one particular class of rural business. Does he
think that entrepreneurs in rural areas are helped by having to deal with
that weight of legislation or is Gordon Brown right to say that we should
reduce the amount of red tape?
Allan Wilson:
I am in favour of the Hampton review. The statement that was made last week
was significant and we in the Scottish Executive fully embrace the
principles behind a review of bureaucracy and red tape. We look unfavourably
on anything that restricts entrepreneurial growth and the Hampton review has
much to teach us in that regard in both the urban and rural contexts.
The enterprise networks have an important role to play. Both Scottish
Enterprise and Highlands and Islands Enterprise, which has greater resonance
in the rural areas to which Stewart Stevenson refers, seek to grow our
entrepreneurial base by
encouraging and supporting business start-ups and by supporting existing
businesses that have growth potential so that Scotland can develop a larger
stock of companies of scale. That is critical in growing the enterprise
culture to which I
referred.
Let me clear up Murdo Fraser's point about the creation of new businesses.
The Committee of Scottish Clearing Bankers is, of course, correct. In 2004,
there were 2,808 new businesses in Scotland; I think that that complies with
Murdo Fraser's
figure. That is a regrettable decrease of—
Murdo Fraser:
It was 20,808.
Allan
Wilson: I said that:
there were 20,808. That represents a regrettable decrease on 2003 of 3.1 per
cent. However, the important point is that it represents a net increase of
9.3 per cent on the number of new businesses that were created in 2002. I am
not one to take a snapshot of a particular year and extrapolate it wrongly.
Murdo Fraser:
In this battle of statistics, will the minister confirm that the number of
VAT registrations in Scotland has fallen since 1997, when his party came to
power?
Allan Wilson:
I accept that there are
challenges in business growth. That is why I proposed for debate the subject
of growing an enterprise culture. I argue that the Scottish Executive has
policies to turn around those statistics. The policies of the Tories and the
nationalists would take us backwards, especially on the tax burden that
Scottish and UK businesses face, which is lower than that of most of our
competitors and trading partners. The nationalists and the Tories deny that,
but Organisation for Economic Co-operation and Development numbers show that
the UK business tax burden, which is a combination of corporation tax and
employers' national insurance contributions, was about 6.3 per cent of GDP
in 2002.
That is below a simple average of the EU 15 countries, which stands at 10.2
per cent, and is below the figure for the much-quoted, much-vaunted Irish
economy, whose virtues Jim Mather extolled. The figure is lower than those
of Japan, Germany and France. The idea that the business tax burden in
Scotland is a restraint on growth is simply untrue.
Murdo Fraser:
The minister will be aware
that he quotes figures that refer to business taxation as a percentage of
GDP. In Scotland, the private sector economy is a smaller percentage of GDP
than it is in the rest of the UK or in many other countries, which means
that business taxation must be proportionally higher and have a more serious
impact, so my point is proved.
Allan Wilson:
The situation is quite the
opposite. By that logic and the fact that Scotland has a higher percentage
of public sector employment, GDP per capita would be increased by increasing
public service wages. That cannot be true. The argument is unsustainable.
We have made clear our commitment to the programme in "Determined to
Succeed". Unlike Stewart Stevenson — Wendy Alexander was right to pull him
up on his argument — we do not argue that entrepreneurialism cannot be
taught or that introducing entrepreneurialism into the curriculum will not
help to counter a risk-averse culture. As ever, the nationalists give a
counsel of despair. That reminds me of the Tory years, which are —
thankfully — a thing of the past that will not be returned to. It also
reminds me of the clear dividing lines between parties. We cannot build an
enterprising culture in Scotland by divorcing ourselves from the world's
fourth most successful economy or by cutting more than £4 billion from the
Scottish budget — from investment in education, enterprise and science, to
name but three issues.
We beg to differ from those scenarios. Our strategy is determined to
succeed. We are determined to transform our culture into one of confidence
and ambition for a modern society.
The Presiding Officer:
That concludes the
debate. As there are no questions to be put at decision time, we move
straight to members' business.
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