We are focused on delivering economic growth in a way that’s more inclusive – and by that I mean inclusive of people, and inclusive of places. What we all want is a country where people can flourish no matter where they are born or who they are.
Those of us here today who can call Scotland home are lucky. Scotland is a wealth country. Even without oil, GDP per head in Scotland is higher than the UK average, excluding London. Our unemployment rate is lower than that of the UK. A child born today has a life expectancy higher than ever before. Equality and diversity are improving.
We are becoming a more equal country in many respects.
Having said that, some of us in Scotland today are less fortunate than others. Some people and some places have over recent decades benefited much less from economic growth than others.
In 2015-16, seven out of ten children in poverty in Scotland were living in a household where someone was in work.
Women still get paid less than men, are less likely to be in full time employment, and more likely to stay at home due to caring commitments.
More people are in work in Scotland than the pre-recession high but job opportunities vary considerably across regions.
These challenges are not only seen in Scotland, but across the UK and across the world. Inequality has remained stubbornly persistent, with the richest benefitting more from growth than the rest. Barack Obama has called inequality the “defining challenge of our time”.
The international evidence on this is clear. Inequality harms lives. It leads to poorer educational prospects, well-being and health. It limits social mobility across generations – meaning that if you are born poor, you are more likely to grow up poor.
What is also becoming more apparent too is that inequality damages economic growth too. Analysis by researchers at the OECD in 2014 estimated that rising income inequality in the UK between 1990 and 2010 had reduced GDP per capita growth by 9 percentage points – that’s approximately £1,600 for every person in the UK.
So it’s in all our interests to grow the economy in a fairer way. Our Economic Strategy, published two years ago, recognised this need for a more inclusive approach to economic growth, by making it more competitive and tackling inequalities.
We made it clear that in Scotland, we won’t chase growth at any cost or limit its benefits to the few. But that we will ensure growth means prosperity and opportunity for all – regardless of who you are, and what part of Scotland you live in.
We are working to tackle the uncomfortable truths behind some of our positive economic results, such as tackling the differences in economic performance between regions, the gender pay gap, in-work poverty and issues around pay.
Of course, these words need to be backed up by action.
Our action to promote inclusive growth.
✔️ We’re improving wages and working conditions.
✔️ We’re helping more parents back to work by increasing the availability of free, high quality childcare for all three and four year olds to 30 hours per week by the end of this Parliament.
✔️ We’re tackling the educational attainment gap that exists between those from the least and most disadvantaged communities, with a £750 million investment through the Scottish Attainment Challenge.
✔️ And we’re delivering significant investments in regional economic growth, jobs and skills through City Region Deals.
Our approach has been getting international recognition. The OECD have called Scotland “a real inclusive growth incubator”, and Professor Joseph Stiglitz has said that our Economic Strategy “leads the way in identifying the challenges [around inequality] and provides a strong vision for change.”
If we succeed, we will all benefit, because a more inclusive economy is good for everyone. And where income and wealth are shared more widely, delivers higher long-term growth and reduces inequality.
That’s why our focus in Government is on making real improvements to the lives of people. This means people from across all parts of Scotland and from all our communities – which brings me to the importance of ‘place’ to inclusive growth.
So what does inclusive growth mean for communities across Scotland?
It means we’re living in successful communities which are economically, physically and socially strong. To achieve inclusive growth, communities themselves need to be able to make more decisions about their local area, we want change to be ‘done by people’, and not ‘to’ them.
And it means delivering growth in a way that helps build strong communities that embrace diversity – providing a better quality of life for everyone. Communities thrive when they feel a shared sense of belonging, when they learn and grow together, and when they feel able to live their lives in peace.
Finally, we want to ensure that all parts of Scotland have the potential to thrive equally, in a truly balanced economy. The unequal spread of industries, jobs, poverty and wealth means that different parts of Scotland face specific challenges that require tailored responses. Social and economic progress must be felt throughout the country. From Selkirk to Stornoway, Aberdeen to Arran all parts of Scotland must be able to prosper.
So how will we achieve this?
The Community Empowerment Act, passed in 2015, sets out in law how we will give community bodies the power to buy land and buildings, as well as giving them more of a say in the decisions that matter to them. This is backed by funding that supports communities to take decisions about how money is spent in their area and tackle poverty and inequality in their own terms. By giving communities the power and confidence to shape their own futures, we can tackle poverty and address inequalities much more effectively.
Stronger community empowerment is also a key part of our planning work. We will continue to ensure that communities are empowered to play an active role in designing how their places will work and grow in the future.
We are also taking action to drive a more inclusive and balanced economy across all parts of Scotland. Our approach to regeneration – working in partnership with local government and communities – makes a big contribution to delivering this. One example is our on-going support for Clyde Gateway, which is transforming one of the most deprived areas in Scotland. Clyde Gateway is tackling inequalities, creating jobs and opportunities and was recognised by The Royal Institution of Chartered Surveyors as the top regeneration project in the UK in 2013.
We are seeing more local authorities across Scotland coming together and working with our national agencies, businesses and others to strengthen their local economy. For example, in order to tackle the unique challenges facing the South of Scotland, we are going to create a new enterprise agency in the heart of the region. This will aim to support inclusive growth and increased productivity, helping the area to thrive.
Giving local areas more control over economic decision-making extends across the country. We have committed £760 million over the next 10 to 20 years for City Region Deals in Glasgow, Aberdeen and Inverness. We are also working towards City Region Deals for Edinburgh and South East Scotland, Stirling and Clackmannanshire, and the Tay Cities. These deals will create thousands of jobs, raise skills in local labour markets and support inclusive economic growth.
The actions are just the foundations for building a more inclusive economy across Scotland, where people have the opportunity to flourish no matter where they are born or who they are. We must rise to this challenge and think about what we can all do, with others, to help deliver inclusive growth in Scotland.
Angela Constance is Cabinet Secretary for Communities, Social Security and Equalities.