Formula for growth in the pipeline

THERE are just a few days before the majority SNP Government launches its grand new economic strategy, but Enterprise Minister Fergus Ewing manages to squeeze in a few prosaic appointments.

While advisers and aides spend Thursday frantically putting the finishing touches to the department’s master plan – ahead of its launch in Edinburgh tomorrow – Ewing nips out to address the World Plumbing Conference which opened in the capital that day.

The Loretto educated solicitor points out how these types of conventions, which attract an international audience, have put both Edinburgh and Glasgow on the map as key “business tourism” destinations.

Ewing inherited the Energy, Enterprise and Tourism brief from Jim Mather four months ago and he has made a point of getting out and about to address conferences and meet businesses across Scotland. He boasts that in July alone, he made 77 visits, making a day in parliament almost restful even if he does have to dash off to First Minister’s Questions (FMQs).

Although Ewing is a former small business owner himself, those visits have been crucial in getting the former Community Safety Minister up to speed with the major challenges confronting Scotland’s enterprises ahead of tomorrow’s big launch.

The economic strategy could not come at a more critical time. Last week saw a raft of negative data pointing to a serious slow-down in the UK economy in the third quarter of the year, including the worst monthly performance for a decade by the key services sector in August. Oil and gas production also dipped 1.5 per cent in July. The Scottish outlook is similarly bleak. The economy expanded by just 0.1 per cent in the first three months of the year compared with 0.5 per cent growth for the whole of the UK.

Ewing cautions against an over-emphaisis on statistics. His visits to businesses around the country have “given me a hugely positive picture of the economy”, he says.

“There’s another way to form a judgment and that’s by going out and listening to and engaging with businesses and also our universities, who are increasingly playing a more important part in business in all sorts of ways.”

He may also point to numerous success stories among Scottish companies – Weir Group, Aggreko, Craneware and Cupid. Nevertheless, Ewing has to concede that growth drives the economy and will determine the success of his own government.

“Plainly these are difficult times,” he admits before entering into the SNP’s well-honed arguments about Scotland’s reduced settlement from Westminster and the “mismanagement” of the economy in the past, “notably by Gordon Brown”.

But the Scottish Government does have some levers at its disposal and tomorrow’s strategy is designed breathe optimism into a private-sector that is struggling with a worsening macro-economic outlook and poor consumer confidence.

So what does Ewing believe will help Scotland’s economy out of the doldrums and on to a firmer footing?

He argues that renewable energy, which for several years was more of a “theoretical debate”, has started to translate into real jobs and investment.

ScottishPower-owner Iberdrola, Scottish & Southern Energy, Mitsubishi and Spanish firm Gamesa are among the major multi-nationals that have thrown their weight behind Scotland’s burgeoning renewable energy sector and Ewing insists there’s plenty more where they came from.

“There are another ten or 15 major potential investors,” he says. “Scotland has carved a niche. I know that a leading official in the EU has remarked recently to one of our senior officials that Scotland presents itself as though it were a member state in relation to renewable energy.”

The riches from oil and gas are far from over, he insists, as the sub-sea extraction that goes on off the coast of Aberdeen will require more investment than in the past, spelling more money for the Treasury.

The big picture visions sound convincing but what can small firms, which account for more than 99 per cent of Scotland’s companies, look forward to? Ewing can’t do enough to stress his SME credentials, having experienced all of the highs and lows of company ownership himself when he set up his own solicitors’ firm, Ewing & Co, in 1985.

He highlights the importance of the SNP’s small business bonus scheme, which applies to non-domestic business rates. He also becomes highly animated about the continued and tortured issue of lending, arguing that improved access to finance is the one outcome the Scottish Government would like to see from all of the debate around bank reform, which will come to a head tomorrow with the publication of the Independent Commission on Banking’s final report.

“Access to finance plainly is a huge problem and the frustration, the anger and the cynicism about the banks’ approach is there, I’ve encountered it.

“What we want is a solution which resumes the practice of bank lending to businesses in a prudent fashion. No business expects to get a loan without proving they can re-pay it.

“No-one has got a right to a loan but someone who can demonstrate a capacity to re-pay, established companies that have got a proven track record, people that are willing to put in their own investment – our objective is to see that lending resumed.”

And with that he’s off to FMQs.