David Mundell: Retail business will help power Scotland out of the recession

At the heart of my message to delegates will be the new coalition's commitment to back business to build a strong, sustainable recovery.

Scotland's varied retail sector is one of our great economic successes. However, times are tough. Established retailers are operating in a harsher and more competitive environment.

I believe that it will be business, with retail at the forefront, which will power Scotland out of recession. However, business leaders tell me of the need to restore confidence in the marketplace and among consumers.

The government's first step has been to implement a credible plan to cut the unsustainable budget deficit. Nobody should underestimate the magnitude of this task.

The structural deficit we inherited three weeks ago is the largest since records began. Recent events in the Eurozone reinforces the importance of taking action this year. We are committed to significantly accelerate the reduction of the structural deficit during this Parliament.

Last week, we announced 6 billion of UK spending cuts. As we take this first step on the road to restore sound management to our public finances, we will make every effort to protect key front-line services and those on the lowest incomes.

We will detail our comprehensive plans for deficit reduction in the emergency growth Budget on 22 June and in the full Spending Review reporting in the autumn.

The action we have taken will help to keep interest rates lower for longer, boost economic confidence and protect jobs.

We know that paying a share of the deficit falls on Scotland. Without stronger finances we will be unable to deliver the ambitions we have for Scotland.

I want to see a prosperous, business-friendly Scotland. Where it is easier for enterprising Scots to get new companies up and running. Where the barriers which stifle businesses and employment are pulled down. Where a simpler and fairer tax and benefits system actively encourages employment.

Fairer taxes will help Scots on low and medium incomes and realise our long-term aim of increasing the personal allowance to 10,000. A reformed benefits regime will lift hundreds of thousands of Scots back to work and out of poverty.

We are committed to unlocking all of Scotland's rich talent. With the aim of supporting sustained green growth and the building of a more responsible economic model. One key ingredient is the provision of affordable credit to our viable and vital SMEs. Which must be delivered by a reformed banking sector promoting responsible banking in a more competitive industry.

I believe that our efforts to secure economic recovery can take place alongside a transformation in our politics.

David Cameron emphasised in Edinburgh that we have embraced a respect agenda where co-operation not confrontation is key. That means positive engagement with the Scottish Government – because we understand that a good relationship between Westminster and Holyrood serves Scotland well.

Respect and co-operation is the way forward. The best path to ensure economic recovery. Retail will play a crucial role in the upturn and this government is committed to backing business-led growth across Scotland.

David Mundell is a Scotland Office minister and a speaker at The Scotsman Conferences event Shopping for Growth, Tuesday, 1 June. www.scotsmanconferences.com