 Ie. Monday is my pleasure to welcome you to the debating Chamber of the Scottish Parliament for the 15th business and the Parliament conference. To those who joined me for dinner last night, welcome back. I hope you enjoyed the evening, and to those who were joining us this morning, a warm welcome to your Scottish Parliament. It's really great to welcome all of you in person time since 2019, and there's another first. This is the first hybrid business in the Parliament conference, so very warm welcome to those who are joining us online. As you will know, business in the Parliament is a unique opportunity for business representatives from all over Scotland to participate in debate and discussions with politicians and policy makers on issues that are of importance to you, our business community. Before I introduce our first speaker, I would just like to suggest that you feel free to tag, tweet, post, blog, vlog, poke, star, click, like, friend, favourite—I don't know what half of those are either—or otherwise engage through social media. The hashtag is BIPC 2023, but please, of course, set your devices to silent. I'm very grateful to the members and staff of the Economy and Fair Work Committee and to our own events team for their hard work in delivering this event once again. Of course, this conference is a joint initiative of the Scottish Parliament and the Scottish Government, so I'd very much like to thank the cabinet secretaries and ministers and their officials in the Scottish Government for their contribution. The conference began in 2004 with the aim of bringing business and the Parliament together, and that remains the purpose. As I mentioned last night, the theme of this year's conference is sustainable recovery, maximising the opportunities of the next decade. That's a theme that's been considered by many parliamentary committees this session, as they, together with our conveners group, grapple with how best to consider the major cross-cutting challenges that we all face, such as recovery from Covid and the response to the twin climate and biodiversity emergencies. The Economy and Fair Work Committee has a leading role in this, and I will shortly introduce Clare Baker MSP, who is convener of the committee, and Clare will provide an outline of the committee's work in relation to sustainability. We will also hear from guest speakers on the subject, including Andrew Murphy, the chief operating officer for John Lewis partnership, and the First Minister, the right honourable Nicola Sturgeon MSP. However, there will be an opportunity for you to put your questions to our speakers this morning, and there will also be six workshops on themes linking with sustainability. That will give you the opportunity to debate and raise any issues that are important to you. On your return to the chamber, we will have a cross-party panel of MSPs, and again, that is your opportunity to put questions on the issues that matter to you. The conference will close with an address from John Swinney MSP, Deputy First Minister and Cabinet Secretary for Covid Recovery, and currently also Interim Finance and Economy Minister. As you can see, there is a lot to get through this morning, and this is very much a listening event for us politicians. We want to hear from you, so please make the most of this opportunity. Participate. Let's hear your voices. We're very, very keen to do so. I hope that you have a worthwhile, thought-provoking and fulfilling time at business in the Parliament. Most importantly, I hope that you enjoy it, because your engagement with us here at the Parliament is incredibly important. I would now like to invite Clare Baker MSP, convener of the Economy and Fair Work Committee, to open this morning's proceedings. Clare Baker. Good morning, First Minister, MSP colleagues and invited guests. It is my pleasure to be here and my capacity as convener of the Economy and Fair Work Committee and to open this morning's conference. I am pleased to see so many of you in Parliament, and it's fantastic to be meeting here in person, as well as online, ready to discuss the issues that matter to Scotland's business community. Many of you will have engaged with the Economy and Fair Work Committee this session, or perhaps one of its predecessors. For those who haven't yet, and I would encourage you to participate and join in with our work, I briefly outline some of the work that we have undertaken so far in this session, and give an insight into some of our future projects. A key role for all committees is to scrutinise the work of the Scottish Government to conduct inquiries and to hold Government to account. The Economy and Fair Work Committee remit does cover a broad spectrum of policies, but the theme of ensuring a sustainable recovery from Covid and other economic shocks and the policies and actions needed to maximise opportunities for the next decade underlie all of the committee's work. Beginning our work in 2021, the committee recognised emerging issues across a number of sectors, and undertook an inquiry into Scotland's supply chains. We looked at the challenges and shifts impacting our economy and how sustainable resilience for Scottish businesses could be supported and opportunities seized. We know that the supply of labour is causing a major problem, acute problems in some sectors. We need to see greater flexibility with the occupational shortage list and temporary visas, and the UK and Scottish Governments—that does sound better to me as well, hopefully—I do not have my voice projected enough. I will not go over everything, but it is fantastic to see everyone in Parliament as well as those joining us online. It has been a number of years since we have not had such an event, so it is the MSPs who are really welcome that people come across Scotland and come from their constituents to participate. I am just outlining some of the work that the committee has undertaken and we have done a supply chain inquiry. We also welcome the Scottish Government's 10-year economic strategy for economic transformation and its focus on growing entrepreneurship and the focus on Scotland's labour supply issues and addressing economic inactivity. We need to see a road map to show how Scotland will ensure that labour force skills are planned, developed, maintained and retained. A key consideration for us all is the transition to net zero and providing certainty that businesses need in terms of the support that will be available to them and the solutions and technologies that will be promoted. The committee has also undertaken inquiry into retail sector and town centres. We know how important retail is for Scotland's economy and the significant change that the sector is experiencing, some of it hastened by the pandemic. In particular, the smaller independent retail sector in Scotland is playing an increasingly important role, but we know that it is coming under intense pressure from energy costs and other rising costs. Across Scotland's communities, there are many valued local businesses, but too often they now sit alongside big-empt retail units. The committee valued visiting businesses in Hamilton, Fraserborough, Inverrure and Burnt Island, and exploring models such as the Mid-Steple Quarter in Dumfries, hearing about how local centres can be supported and revitalised. The Scottish Government's policy refresh will hopefully bring renewed focus on retail in our town centres. With so many interlinked strategies and initiatives, we need to see leadership, policy cohesion and a shared direction of travel across all Government portfolios, and that will be vital. The establishment of the retail industry leadership group is a positive step, and I know that it is jointly shared by Andrew Murphy, the John Lewis partnership chief operating officer whom I look forward to hearing from shortly this morning. The committee has also taken the decision to focus on challenges being faced by women in business, focusing on how best to support the economic participation of women and the growth of women-led businesses, how to improve the collection of data, and how to incentivise recruitment at senior level. We anticipate the establishment of a women's business centre, and we have consistently highlighted that issue in our budget analysis. In closing, I will mention two pieces of work that we are currently focusing on. We recently launched an inquiry into a just transition with a focus on the Grangemouth area. We plan to look at how best to support, incentivise and de-risk the just transition in a way that benefits both companies and individuals. Our other work stream is looking at the disability employment gap, and what must be done to ensure that the Government meets its target to significantly reduce that gap. While disabled people are often furthest from the workplace, they not only deserve to be included in our workplaces in our society, but with the right support, they have a really valuable contribution to make to our economy. In closing, I thank everyone for coming along today. I hope that the forum will provide you with an opportunity to make new connections and exchange ideas and experiences. I look forward to hearing from our other speakers. We will now hear from Andrew Murphy, chief operating officer for John Lewis partnership. Andrew has held a number of positions in the John Lewis partnership and is noted for his role in establishing John Lewis as one of the United Kingdom's leading omni-channel retailers. Andrew is also chair of the Scottish Government's Retail Industry Leadership Group, a member of the Bank of England's Central Bank Digital Currency Engagement Forum and the former chair of the Scottish Retail Consortium. Good morning, ladies and gentlemen, First Minister, Presiding Officer. It is my privilege to be here to speak to you today, although I am slightly terrified now that my LinkedIn has been read out in public like that. It does not sound nearly as good when it is in the Scottish Parliament. It is a fantastic turnout. I think that that is testament to the importance that I hope everybody in this room attaches to public and private sector working together. Perhaps also to our shared recognition of the need and our responsibility to make our collaboration even more productive in future and over the next 10 years. As mentioned, I am speaking to you today in my capacity as co-chair of the Scottish Retail Industry Leadership Group, which I lead alongside Minister Tom Arthur. I am also speaking to you today equally as a Proud Scott, as the product of Penicook High School and the University of Aberdeen. I am speaking to you as the father of three boys who are currently working their way through our country's state-funded secondary and further education systems. I am speaking to you, starting more randomly, as a football fan and a former player and youth team coach, who still gets more excited about the right result from Parkhead on a Saturday than he does about the results in the boardroom at the end of the year. I am speaking to you as the son of Margaret, who is in South Queensford and whose 75th birthday we will be celebrating tomorrow night in a new local restaurant that is part of a fantastic growing Scottish chain. Why do I introduce myself like that? It is because there can be no sensible conversation about commercial enterprise or about business people without acknowledging that business and society are interlinked. Moreover, it is vital that we accept that the jobs that we each do do not wholly define us and that they cannot be allowed to create barriers of prejudice and assumption that could hamper or overly define our interaction with each other. Days like today are really essential in making sure that we engage as humans on the level. We are one society, and with absolutely no political influence intended, we can and unable you should think of ourselves as members of Team Scotland. At the same time, we can recognise and feel great about the fact that within this we each have different and vital roles to play for other teams, some of which legitimately claim precedence in our passions and our energies as we think about the future, our family, our business, our industry, our cause, our party. For me, as for all other business people here in the room and across Scotland, my role is to serve our customers and to ensure profitable trade and to exercise a duty of care to our employees. However, we all take great satisfaction and pride from the fact that if we do those things well, we also add social, structural and economic value to Scottish society. When you listen to my thoughts in the next 10 minutes and my suggestions, I would like you to hear them not just as the concerns and urgings of Andrew the businessman but of Andrew the dad, Andrew the son and Andrew the product and grateful beneficiary of Scottish society. Of someone who through both legitimate self-interest and collective concern wants only the best for Scotland as together we look to create its future. So, the question is how do we maximise the opportunities of the next decade? So, first, some disclaimers. Honestly, in 15 minutes I can't do justice to such a broad and fundamental question across the full scope of Scottish industry. Secondly, for my five recommendations to make sense, I actually need to spend more time set in context than I do articulating the suggestions themselves, but please bear with me. I promise the speech is only just over 10 minutes long. Thirdly, I am going to talk most specifically about retail, but I hope I'm going to be able to make it clear and I do believe it's in the most part where those points also have relevance to Scottish industry as a whole. But I am particularly pleased to have the opportunity to put retail centre stage because of the huge role it plays in the lives of Scottish people and all the communities in which we trade. Retail provides most people's first conscious experience of what a business is, and later in life it offers flexible, high-quality employment at multiple different levels of experience and seniority within easy geographic reach of ordinary people, and that is not to be underestimated. One way or another, retail is integrated into the life of every Scot. 230,000 Scots employed in the industry, £20 million raised or donated to Scottish good causes in 2022, hundreds of millions of customer interactions every year. But it's precisely because retail is so ubiquitous, so relied upon and has always been part of our everyday lives. That means it's sometimes thought of like a public service. Other times it's the victim of nostalgia, prompting people to want to see it preserved in aspect rather than evolve as it must. I have endless fond recollections of my own childhood experiences in retail, in Willy Lowe's, in Goldberg's, in Arnott's and Vinyl Villains. I sold them some brilliant records for £20 that were worth about £500. I think I'm scarred by that. But sentimentality gets in the way of us focusing on retail's existential challenges of today and generating the sense of urgency with which we have to collectively address them. Retail can't be taken for granted. It can't be assumed to be an all-enduring, on-demand utility that's certain to adapt, certain to always be able to rise to society's needs and any challenge. Our industry needs support and realism, and more than anything, it needs influence in order to flourish and in fact survive. Even before the pandemic, we'd seen many good retailers go to the wall, with retail insolvencies steadily increasing through the end of the last decade, gouging a deep scar through the heart of many of Scotland's towns and cities. The reasons for this are usually more nuanced than the media headlines will show. Those tend to assume sales decline, or the idea that a brand has simply chronically lost popularity. While, of course, those things can and do happen, very often the fatality is actually the result of a business with a perfectly healthy customer franchise and a decent sales line, but which simply can no longer endure a relentless increase in its core costs, or arrives at a moment of truth where a significant investment is required one off, either for regulation or to update assets or to digitise part of its operating model. The hard reality for the UK retail industry as a whole is that its pre-tax profits have halved over the past decade. If that surprises you, there is a simple equation to explain that, and it's an equation that is not going to change. On the left-hand side, UK population growth, consumption increase per person and price inflation, despite what's happened in the last 12 months. That left-hand side will remain significantly smaller than the right-hand side, which is underlying cost growth in labour, in cost of goods and in the cost of defensive digitisation. Why do I say defensive digitisation? It's because retail literally is the distribution and the sale of goods produced by others. The role of the retail sector in the economy, this part of the value chain, is to enable producers and manufacturers to reach consumers. But the internet has changed this game forever. For all its many positive impacts in commerce and society, in consumer-facing industries especially, we nonetheless have to respond to the fire that the internet has set under the platform on which many of those existing businesses were first built. An example of that is where non-food retailers are being disintermediated by both product brands, who reach the customer now directly through their own website, and also by technology giants such as Google, Amazon and Facebook, who are the first point of entry for most people when accessing the internet. I mention all of this not in a search for sympathy, but simply to help everybody to understand why many of the store closures that you see are happening and that they are not always evidence of a failing business. More often, they are simply evidence of shops being less effective and often now an unprofitable distribution channel for that business. The harsh reality is that neither the consumer nor the manufacturer of goods needs retailers now quite like they once did. Consequently, neither of those groups are prepared to pay the same price, the retailer's margin, that they once did. That price is necessary to support our former mode of operation, our previous scale of physical presence and our labour intensity. No one should therefore be surprised that retailers are having to engage in previously unimaginable transformations of that scale, their physical representation and their staffing in order to survive. How do we together deliver the conditions to support retail's transformation and survival and by doing so contribute to maximising the entire commercial sector's performance in the next decade? Five things. First of all, let's agree that in a small country like Scotland there can be no true sustainable success for any of us without at least a measure of success for all of us. Consequently, I firmly believe that tomorrow's successful sustainable businesses will be those that not only have a great product and service but also have an embedded purpose. The purpose of the John Lewis partnership is to work in partnership for a happier world. Starting in 1929, our founder progressively passed his ownership of the business to the people who worked in it, so a sense of the common good and of purpose is intrinsic for us. It is most recently seen in our building happier futures campaign to employ, develop and nurture care experienced people. I was also delighted to serve on the Scottish Business Purpose Commission, whose report was warmly welcomed by government. That is unsurprising, because purpose drives many of the Scottish Government's priorities, most notably perhaps on fair work. It is really difficult to disagree with the underlying intent of fair work and the idea that most companies and society would benefit from businesses progressively shifting their focus along the axis from the short-term interests of shareholders to their broader stakeholder group, employees, suppliers, customers and community—the planet as a whole. The majority of businesses that I speak to are already aligned with the sentiment and are taking action. Secondly, we need to not be shy about the fact that the existential priority for any business is the need to be commercially and economically successful. Because of that, I put it to you that it is imperative that everybody who sits in this chamber, now or on any other day of the week, becomes enthused by the idea of profit and of wealth creation. Consider for a moment the investments that are driving us towards net zero—a potential area of alignment or a potential area of tension. In and of themselves, investing in energy-efficient lighting or in vehicles powered by hydrogen or electricity can be a financially positive and a returning investment, quite apart from being beneficial for the planet. That is brilliant. But the timescale over which those financial returns materialise can be anything up to 10 years. So if the profits from the core operation of a business are not likely to be healthy in the meantime, that investment, however ultimately valuable, cannot be started far less sustained. We trade in real time. We pay our employees and our bills in real time. And so many businesses simply can't survive if we're obliged to make major investments which remain cash negative for prolonged periods of time. There's no glory or benefit for anyone when a business dies. That the business might die with a handsome array of sustainability initiatives and investments to its name doesn't soften the blow one bit. It's incumbent on all of us in this room to ensure that we avoid permitting such a self-defeating scenario, which would be the opposite of the Team Scotland approach that I described. My final point on profit is that not only do businesses and their employees rely on making a profit, wider society relies on it too. Not just on taxes but perhaps the best illustration most directly is to note that local government pension schemes are able to support their members through retirement as a result of investing in funds containing mainly corporate bonds and equities. Business and society intrinsically linked, profit and purpose are the blood and the soul of a healthy business and a healthy society. Third, in order to take this country and its industries forward we have to share a clear vision and strategy between policy makers and industry. The national strategy for economic transformation, industry leadership groups and the ILG chairs round table are exactly the right platforms from which this collaboration can grow. However, they have to be used in the right way and we all have to have the discipline and resolve never to sidestep them or compromise them. Building from that and forth we have to accept that it's usually only on the journey to delivering a strategy that we really discover whether when we've done the work we've truly managed to reconcile the differences in view about the ideas or about what they will mean in practice. Will those strategies be strong and specific enough mandates to hold firm when buffeted by unexpected events and external challenges? If not, can we be collaborative, constructive and adaptable to change once on the road? That applies very much to retail for the reasons I've described and our journey ahead, but many Scottish industries have similar paths to tread where traditional modes of business must be carefully managed along an evolutionary path. A path on which many of the jobs and the physical infrastructure associated with the past will ultimately have to make way for different skills and different delivery mechanisms of the future. What's vital here is that Parliament and Government recognise that industries constantly face their own market driven and rapidly emerging, often non-discretionary changes. That means that politicians should expect to be open to compromise in the sequence of actions and the pace of change that they might most ideally like to see for legislative and policy driven change. It's vital therefore for the success of both groups, Parliament and business, that businesses are engaged and listened to at source on the targets, the schemes and the practical delivery plans, and not just when the high level national strategies are sketched. That requires consultation models and industry partnerships, which are always on at the highest levels. The ILGs clearly have the potential and the desire to provide that, but they will only do so if they become the first touch point for all new ideas, initiatives and exploratory intent flowing between Government and industry. That is not to displace the vital role of business representative groups, whose leaders inevitably make up much of the ILG membership, but it is simply to ensure that Government and sector leadership are jointly and simultaneously cited on all emerging issues and can help each other through that process. There are a couple of recent issues in which that collaboration has sadly not been the default, and I can't help but think how differently the aims of the deposit return scheme could have been delivered if we'd worked from the start in that collaborative way, or if there were meaningful and ambitious action in response to the long-held and widespread industry concerns about the effectiveness of the UK apprenticeship levy. Finally, but perhaps most fundamental, is that all of the strategic and operational partnership for which I've asked has to be built on trust. I firmly trust that the Scottish Government has good intent for the people and the industries it represents and that it is genuinely determined to be a home for successful commercial enterprise, both large and small. However, I see across colleagues in industry how the faith that they have in politicians' good intent can be quickly undermined by instances of intransigence or when confronted by what appears to be insufficient attention to the detail of successful delivery. To avoid that, we need to be closer from earlier, more curious about opposing views and less quick to judge and entrench on both sides. In conclusion, my presence here today and the speech that I've delivered speak to the fact that I believe that the priorities of industry and the Scottish Parliament of business people and politicians are naturally and fundamentally aligned. As members of a relatively small and highly interconnected society in Scotland, we naturally share many of the same aspirations and concerns. Where we sometimes drift apart, I think, is in relying slightly too much on the high-level aspiration and frameworks but neglecting to refine and give a sharp edge to that natural alignment through a rough stoning process of reconciling ultimately some different needs into highly specific plans, timescales and outcomes. To our collective cost of frustration where that happens, the detail of execution becomes the ruin of the dream. In the next 10 years, to ensure the successful Scotland that we all want, let's dream and do the detail of delivery together. Thank you. Thank you. Yes, not quite yet. This is now your opportunity to put questions to Andrew. For those who are joining us online, can I ask if you'd like to put a question? Please send it in via the online website Slido. For those here in the chamber, please raise a hand and then we will ensure that your microphone is put on. For those who are able and comfortable, please do stand, and if you could give your name and organisation. If I could have the microphone on in the second row here, that would be very helpful. Thank you. If you'd like to stand, thank you very much. I'm quite an unusual character and I didn't want to come today because I'm too busy. I was taught to this young lady that I met and I said that I'm very nervous about coming because I don't do public speaking. I don't have a single qualification. I left the school at 15 and I wanted to ask Andrew, how did you start your business? Did you do it this way? No, no, no. Did you have a full education to learn how to run a business that size? I had a full education, but no education about business. The president of the group bother would help, I would think. When I started, I'm from Jasby Wilson down at Dolbeaty. I'd really like to thank the Government for the help that they've given me for our business. It really has made a massive difference. Scottish Enterprise supported us for years. They recognised the potential that our little business had. They took me by the hand and led me to where I am. That was Scottish Enterprise. I was worried when it went to Sosie. Very worried. I went and watched Russell Griggs to begin with and I thought that private sectors were really going to suffer here. I went to a few and I actually met him. He's quite an exceptional guy. We're in safe hands down there. I really would like to thank Russell for what he's done for us. I would like to thank Phil Robinson, who has left the public sector, because he was disillusioned and put under so much pressure. He now works full-time for us, and he's an incredible guy. He would learn a lot from Phil Robinson, Nicola, a lot. Now, moving on from there, you must have heard of Jaspy Wilson, surely? Well, we have done so many things down there. If everybody did what we are doing in Scotland, it would be great again. However, the problem is that all the money goes in the public sector. If you want this to be successful, you need to get behind the private sector. Do we manufacture? Jesus, we're losing money doing it, even with the help that we get from you guys. We're trying to train people. We're paying for it ourselves. We've tried to get it up here for you to see what should be done, but nobody seems to want to know us because we are the private sector. Okay, thank you. I'm going to come in at this point because I'm aware of other interests and perhaps you'd like to address the points made there. First of all, I think that anybody who starts their own business and makes it successful of it, as my unending respect, I did it a completely different way. My first job was in Dalmore paper mill, sadly now defunct, then RBS, I jinxed that too. So then I went and finished my education and then I managed 30 years in a big business, where I think what I would say to everybody is that the great thing about a big business is you don't just learn about it, you actually learn about yourself and you figure out what you're good at and what you're interested in and what other people's response to you is. Every time I speak to a person who's built and ensured the survival of their own business, it's a story of challenge and of quite a lot of chance and luck. As to one of the points on my speech, public and private sector, it's very easy to stand apart, but we all know particularly in Scotland it's just a perfect example because it's so small. We have to be together and we have to be interconnected and that's why I've given 20 years of my time to business interest in engaging with local and national government because it's never perfect, it's never easy and short term it's rarely the most productive thing, but long term it's the only sensible way to be. One more quick question. We educate our own apprentices down there and we've been highly successful, highly successful. Numerous people have come and seen us but we have never been thanked once for it. That's my only gripe, everything else that we've been helped with but we have invested an awful lot of our own money in this and we've got 20 apprentices and I'm sorry but we've not had the support that we should have and notice there's more among the DIY board and I notice you're all trying but you need to come out and talk to the private sector. I've come in from the jungle fighting for my life back to the time to see, listen to you a lot in your cosy seats here, I'm at the front line fighting for my life. You need to get behind the private sector, that's going to fix things. Thank you, if you'd like to respond. Look I think when the purpose of days like today is exactly so politicians can hear from the reality of business I think you've done that really really well and I'm I have a feeling that you'll be you'll be hearing from people as a result of that so thank you. I'm well done for speaking up. We're too successful on our own if you want to get make Scotland great you come and see what we do in our business I'll wake up every morning and try to make the world better. Thank you. That's my goal. Take another question if I can have the microphone on just the third row here on the right. Thank you. Hello, my name's Pete Moeforth. I come from a private company called Endes, we're an e-commerce company based in Glasgow. I've spoken here before and I can only say more or less what I've said before. I really welcome what's been said this morning about joining together of knowledge and information between the public sector and the private sector that is going to be so key and from my own position I see lots of small Scottish businesses that we work with that have fantastic entrepreneurs behind them that are keen and motivated with great ideas they often don't have a problem with with money or financial resources the problem they have is a lack of skills and the point about a retail in the modern world which is increasingly electronic increasingly online is that there is a crying need for these new generation of skills that only really exist within the private sector within industry and at the moment we have a skills provision system that operates largely within the public sector through colleges and universities that don't really supply the information that's needed to train these new people the skills lie and reside within the private sector and we need to have some framework some mechanism for this transfer of skills and I'm not aware given given that most retail organisations are SMEs in Scotland they simply don't know who to go to when they're trying to grow and develop their businesses they have everything in place they just don't have the skills so is there some way that as a result of event fantastic events like this that bring together these these two sides of things where we could interact and actually share some information and find a way to get the skills from business into these new startups thank you as it happened yesterday afternoon in a committee room quite near here the industry leadership group chairs met including some time with minister mckay and skills was the primary issue on the table lots of sentiment expressed similar to your own about a shared desire and a shared recognition that without a enlightened and strategically anchored focus on skills development in Scotland whichever industry you're from you're going to under potential eyes if I just take retail for example we have 230,000 people in the industry at the moment I don't know what the number will be in five years but it will be less than that and that's a natural evolution now for our industry but we will be effectively donating to the skills pool and my encouragement to government but also to everybody in this room is that we have to think about the country moving up the value chain and when we retrain we must retrain for the far future that's emerging so for example in retail as it's digitised what you've seen is more jobs as delivery drivers more jobs in contact centres because the service is now delivered over the phone and that's been good for Scotland actually that's that's there's a lot of jobs there sadly those jobs those jobs are going to be replaced by technology and so we must get up to the higher end of the food chain to ai development to tech support because if not our country will be disintermediated not not just the retail industry but I am really confident that all the right eyes are focused on this issue. Do we have any further questions yes if I can have a microphone to the fifth room thank you and please do stand if you're able. Hello good morning my name is Bronwyn Thomas I'm from Women's Enterprise Scotland I just want to ask a question about how large retailers can do more to support women business owners there's a huge untapped potential out there and at Women's Enterprise Scotland we do everything that we can to support women to start up and thrive in business. I think it's we're living through a time where every big business that I'm aware of has to make a choice about where it focuses its energy and for the biggest businesses we can focus our energy in a number of places but we can't focus our energy everywhere. You probably know that John Lewis partnership has a board that is majority made up of women it's ethnically diverse our chairman Dame Sharon White is very well known and you can bet that she has a very significant focus on concerns around both gender and ethnic diversity but ultimately we will achieve more by being more focused and businesses also have to be meritocratic about where they provide their patternage to suppliers about how they build their supply chains and I would like to think that as we move forward we'll see all the support that you would expect being given both to businesses led by women but businesses like the one that we heard about earlier that are out there fighting generating good value customer service and great product so if there are specifics as the chair of the industry leadership group for retail I would love to hear about about that because it's a conversation that we are due to have but haven't had yet so perhaps you could reach out to me after this event and we could take on take the conversation offline. Thank you very much indeed Andrew. We will have to conclude questions to Andrew at this point but of course there will be other opportunities during the day and I would now like to invite the right honourable Nicola Sturgeon MSP First Minister to address the chamber. Thank you very much Presiding Officer and let me add my welcome to the Presiding Officers to all of you for being here and joining us today for these really important discussions. This is a very different perspective on the Scottish Parliament chamber than the one I am used to from my seat over there. It's a much nicer perspective I have to tell you but I mean no disrespect to my colleagues when I say that. Thank you Andy for setting the scene for us so well today and for being here with us. Please wish your mum a happy birthday from all of us when you see her tomorrow. When you spoke about Arnott's and Goldberg's and William Lowe's I felt as if you were taking me on a trip through my teenage years but what you had to say about retail I thought was profoundly interesting but also made me reflect not just on the challenges for retail but the way in which the challenges that retail is facing right now are reflected across the economy. When I think back to my younger years and listening to Andy it crystallised in my mind just how important retail was not as a means to an end but actually in our lives more generally for me the Riverside Mall in Irvine was not just a place where we went to do essential shopping not just a source of employment but a meeting place, a social hub, a place of human interaction and the challenges that the internet poses for retail that as you say must be faced up to in a way that allows the value of retail to be preserved and I don't just mean monetary value those challenges but also opportunities are replicated elsewhere so I think your comments today were extremely instructive and give us lots to to think about over the course of these discussions this morning. So thank you for your contribution I'll maybe touch on all of the questions that were posed to Andy as I go through my remarks this morning. I hope you will hear over the course of our discussions this morning a real commitment to the private sector and a recognition that the country can't succeed. Andy made this point very powerfully. The country can't succeed and won't succeed without a thriving, growing, prosperous private sector and the relationship and the engagement, the collaboration, the joint working between the private and the public sector is essential to that and I hope you hear lots this morning that will reassure you. Thank you for a one man applause but you might not want to to applaud this next bit but whether you like it or not I'm about to invite myself to visit your business so that I can see for myself what you do and thank you in person for the work you're doing in apprenticeship. Trust me as long as it's a colour that suits I'm happy to wear a boiler suit. I think I'm going to move on because this could become just a conversation between the two of us and I'm not sure I would prevail in that conversation. The final point I would make for somebody who claims that I'm stressing that word claims to have no experience of public speaking I think you could teach politicians a thing or two from what we heard earlier on. I'm going to move on now if it is okay but I think the interaction that we've already had this morning I do think underlines just how important events like this are. It's now almost 20 years since this business and parliament event was first established and it has lasted so long and I think thrived over the course of these years because it meets an enduring need and we've already heard that expressed here this morning and that is for businesses to contribute perspectives and insight and at times challenge and criticism to legislators and policy makers. Now obviously this isn't the only event that enables that to happen but I think it is an extremely important one and it's welcome that we've got MSPs from across all parties I think here today as well as me I think we have six other government ministers here today to listen to the discussions and the challenge that will be posed and obviously we've got representatives from a broad and very diverse array of businesses here too and as Claire said in her opening remarks it's really good to be back in person after an interval of three years albeit joined online by others today and I think this event and the discussions that it enables is particularly important right now the theme of today's discussion of course is maximising opportunities for the next 10 years and it's important particularly at times like this and I'll come back to that in a second that we do have opportunities to lift our eyes beyond the immediate day-to-day pressures and think about what kind of economy and therefore what kind of country are we seeking to create in the years to come and the reason I say that is because I think it is important to address and to acknowledge first of all that for many businesses if not for all businesses across our economy right now this is an exceptionally difficult time costs are rising and they're rising at a time when because of the wider inflationary crisis consumer confidence is also low and of course we are still in a process of recovery from the biggest shock that most of us have experienced in our lifetimes at a global pandemic and earlier in the week of course in a projection that was very much echoed yesterday by the Bank of England the IMF forecast that uniquely amongst developed countries the UK economy is likely to shrink in 2023 now there's many factors that play in that but of course the situation has been exacerbated by impacts of Brexit which include an issue that's already been touched on this morning the constraints on the supply of labour which is affecting virtually every sector across our economy right now so that's the context in which we meet today but I think it's really important that as we recognise and acknowledge that we do lift our sights and lift our eyes and that we are ambitious for the future for taking advantage of the many opportunities we have it's incumbent on the Scottish Government to do everything we can to support businesses during this difficult period and to listen today to suggestions about what more we can do to support business our budget for the coming financial year went through the first stage of its legislative process yesterday led by the deputy first minister and just as one example of the way in which we are seeking to support the private sector in that budget is a commitment to freeze the poundage for business rates which was the key request made by business organisations ahead of our budget that freeze will ensure that scotland continues to have the lowest poundage rate in the UK and it's part of a package of business rate release that is worth almost three quarters of a billion pounds every year so that's just one of many examples of how we are seeking to support the private sector but of course it is important that we continue to engage and listen and that together we consider and work out the best ways in which to provide that support of course and I'm not particularly seeking to make a political point here it's a statement of fact we don't have in this Parliament access to the whole suite of fiscal levers that we would need to provide much fuller support so we also need to see action from the UK government across a whole range of issues relevant to helping business now cope with the short-term pressures but also to help lay the foundation for the future but let me repeat because this is the focus of my remarks today the job of my government is to use all of the powers we do have at our disposal to support businesses now and to maximise opportunities going back to the theme of our discussion for the longer term it's almost a year now since we published the national strategy for economic transformation I don't have time I'm sure it will relieve all of you to hear this this morning to talk about every aspect of that strategy but I want to highlight three particular points in that strategy the first is that and I've heard Andy refer to this in his remarks already this morning that wellbeing and fairness alongside productivity and economic dynamism is really important and that is very much at the heart of that strategy I think it is now widely and indeed increasingly acknowledged that these two things fairness wellbeing and economic dynamism productivity are not aims that are in contradiction to each other in fact they reinforce each other and in fact that's not new thinking particularly in Scotland we should reflect that was very much at the heart of much of the work of Adam Smith back in the the mid 18th century but it's thinking that is being reinvigorated now and that is why there is in our strategy for economic transformation a strong emphasis on fair work because we recognise that as many businesses already do that workers that are empowered and valued are more likely to contribute to the success and the productivity of the businesses that they work in so the strategy is intended to be a blueprint for a stronger economy but by creating a stronger economy also a blueprint for a better society and the second point I want to make is linked to that and that is about the the importance of entrepreneurialism this chamber right now is full of entrepreneurs and innovators and of course that's something that Scotland's reputation down the ages has been very much founded on entrepreneurialism enterprise innovation again something that we need to reinvigorate and make it the driver of our future success indeed sir look I'm happy to take sir for the interest of everybody else I'm happy to take questions from you at the end okay but if you let me just finish my remarks we'll probably get through this a lot better and when I come to visit your company you can grill me to your heart's content okay sir I'd ask you just to for the or I'm going to set the president officer on you and believe me she can be fierce as I experience on a day to day basis I know sir but I'm just asking you to respect everybody else as well and then you can ask me questions later on but that commitment to entrepreneurialism is why we have appointed Mark Logan formally of Sky Scanner as the Scottish Government's chief entrepreneurial officer and that's about putting expertise and experience at the heart of government I've spent more time than I ever would have wanted to dealing with chief medical officers over the past couple of years but what that's told me is the vital importance of having expertise at the heart of government I know the enterprise and fair work committee took evidence three weeks ago from Mark and he said this which I think is really important it goes to the point the gentleman has just made if we're to have a thriving population of individuals who have fulfilling lives we need to be starting things more often than we have been doing and that basic ambition of being a nation where people start new businesses more frequently is I think central to our prospects for growth over the next decade whether those businesses are tech firms with global ambitions or social enterprises that are finding new ways of benefiting local communities and it's to help support that that mark has been appointed it's why we're investing in the new tech scalars network providing tech entrepreneurs with some of the best support anywhere in Europe and reasonably soon that support network will become available to entrepreneurs in other sectors as well and of course we need to encourage more people to think about being entrepreneurs to think about setting up their businesses and a stewards review of women enterprise going to the question that was posed a moment ago is going to be published soon and is important in that regard and why is that important right now only a fifth of new enterprises are founded by women so if we can change that if we can encourage a situation where the rate of businesses being started up by women is even broadly equivalent to the rate that men start up businesses then we're going to have a significant impact on the bottom line of our economy so encouraging more enterprise and entrepreneurialism will also help us seize new market opportunities which is the final point I want to touch on this morning just a couple of days ago I visited Spire global in Glasgow. Spire designs and manufactures satellites and it's one of the companies that is right now putting Glasgow and Scotland absolutely at the forefront of the space sector. Glasgow currently makes more small satellites than any other city in Europe so it's an outstanding example of our strengths in space in advanced manufacturing and in the linkages to other sectors that that opens up and the national strategy highlights and this is where I think we do need to lift our eyes and and be optimistic it highlights many other sectors in which we are already a global leader food and drink tourism life sciences financial services and it sets out some of the key ways in which we need to support these sectors to grow particularly to internationalise and to acquire the skills that they need possibly the biggest opportunity ahead of us right now one that I know the enterprise committee has taken a strong interest in is the transition to net zero if I talk just about the scotwind project our offshore wind opportunity alone if we play our card right and that's a big caveat because we've got to take the decisions that make sure we realise this potential but if we do that that has the potential to deliver not just green renewable energy for the future but 28 billion pounds of supply chain work in the years ahead so that incredible offshore wind potential we have as that comes to fruition will enable economic activity the creation of jobs it will also enable the creation of a new green hydrogen energy sector perhaps the biggest industrial opportunity we've had in scotland since the discovery of north sea oil and gas and we know decarbonisation can create many jobs in other sectors as well it's often seen as a big challenge in burden and it is difficult but the opportunities are potentially limitless just before christmas I opened dsm's new factory in ayrshire that is providing a food additive for livestock which will reduce methane emissions in agriculture really important to us meeting our net zero ambitions but that additive will be exported across the world and of course at a time of high energy cost the importance of helping and supporting all businesses to reduce their carbon emissions is clearer than ever so fundamentally that move to net zero yes it's an environmental and moral imperative but it is also possibly the biggest economic opportunity of our lifetime so government has a responsibility to support business to support the private sector in seizing those opportunities and as we do that and this is the point I will conclude on we know that we do need to work closely with business with the private sector generally and we know that's not just a matter of holding meetings and discussions or even events like this one engagement must have real impact and it must be two-way it goes in both directions we're seeking to improve that engagement we've appointed private sector leaders on to the delivery board for the national strategy perhaps governments everywhere give too much emphasis to devising strategies and too little emphasis to delivering those strategies we're seeking to address that in how we take forward the economic transformation strategy as I've already alluded to we've brought business perspective into the heart of government through the appointment of individuals like mark we set up a new liaison group for key economic sectors the chairs group of the industry leadership groups that Andy has already spoken about I met with members of that group in bute house last night we had some good discussions there and to go to the question that was posed about skills and as Andy said that was one of the key discussions the shortage of skills the need to upscale rescaler population is a pressing one that involves discussion and engagement between business and government but it also involves businesses in different sectors being more collaborative and working together to solve that challenge we also set up and this I think is important and it goes to business being involved in the design of policy a new regulatory task force at the end of last year to ensure that when new regulations are needed as unfortunately sometimes they are we work with business to understand their impact and where we can to mitigate that impact I know that task force also met yesterday so that engagement and collaboration that genuine joint working is so important and it is what makes this gathering so important it's not the only one but it is a crucial one and all these years after the business and parliament event was established I think it is today more important than it has ever been as I said at the outset these are tough times and there is no point in trying to overlook that but we can and should still look to the future with optimism this country has many hugely successful businesses we have a strong international reputation and that is obvious to me every time I travel overseas to promote the country we have important world leading strengths in key sectors so by working together in the way that we are talking about here today we can build on those strengths we can certainly address current challenges but I believe we can with real optimism set ourselves the challenge and deliver on that challenge of maximising the opportunities of the next decade so thank you very much for listening I'm very happy now to take a few questions and I'm not going to bother losing money by putting bets on who the first questioner is going to be thank you first minister we have a question in the second row here on the right if you could have that microphone on thank you thank you first minister my name is caroline miller from scottish agri tourism i'm a farmer from angus i represent entrepreneurial farmers who are trying to sell food direct and run tourism businesses on their farm many of other women who are sustaining the family farm and employing people in the rural communities you mentioned Covid that's been a difficult couple of years for everybody also inflation and things that we can't control economic impacts from around the world I welcome what you're saying about working with business much earlier and developing policy because what I would say now is that we have these really entrepreneurial farmers who are trying to grow businesses on their farms set up new farm agri tourism experiences but just now there's a whole range of policies coming against us at once short term lets deposit return scheme new planning and you talk about wellness people's wellness being an entrepreneur and trying to get started and trying to grow your business it feels like we've got Covid things that we can't control and then a barrage of government policies and if we're more involved at the start and understanding the modelling of how that impacts entrepreneurs it would make us feel much better and be able to grow our businesses instead of putting people off I think that's a fair challenge to to me into government and I'll accept that it's not easy but that doesn't mean we shouldn't really work hard to deliver what we're talking about here not just engagement I've been in government now for a long time and I will stand in here with what now 15 16 years of experience in government readily concede that too often governments not just this government but governments everywhere engagement and not just with business but generally can be a bit of a tick box exercise if we don't pay real attention to the impact of engagement and the earlier the better I'm going to say something else that might be controversial and it's not you know this will not be true 100% of the time I'll enter that caveat most of the time when governments are doing things regulating legislation introducing new policies we're doing it for a reason and a purpose and more often than not that is either a good reason or an inescapable reason so we're not just dreaming up things to make life difficult for people even though I'm sure that's how it seems sometimes so we need to better explain why certain changes or regulations or legislation is necessary and then we need to listen to business about okay if you have to do this here's how you do it in a way that doesn't make it sort of unnecessarily difficult for us and what we are doing now that is a challenge to government and I think we've got to rise to that if I can throw the challenge back to business and to business organisations that can be challenging for you as well because that sometimes means not just entering a conversation from the point of opposition like we don't want this end of story but listening to why it's necessary and then engaging in how we shape things so actually poses challenges for all of us and governments inevitably at times will still have to do things even if you don't agree with them and and and so we will not necessarily always agree but that on-going day-to-day Andy I think used the phrase you know that engagement's always got to be on and I think that's important so I take that challenge and take that away and we will work hard at trying to make sure we put it into practice. Thank you I'm going to take one more question as I'm aware there are other sessions to get to and I'm going to go to the back row here on the left. Thank you Stephen Thomson, J.K. Thomson, fish processing in Musselburgh. Thanks for taking my question that's something that I never thought I would ever do as speaking in the Scottish Parliament. Just before I give two points the first thing is to say we are very thankful for the support given by the Scottish Government through the resilience fund as processors who not only worked through the pandemic but we actually increased our production through the pandemic so that people of Scotland could be fed. Secondly I would just say the daily updates that you gave us Nicola from the podium I think was something that helped to keep staff at their jobs when they were particularly frightened and scared about working during the pandemic so that's a personal thank you to you for what you did for business. The two simple points I'd like to make around employment which I think is the biggest challenge for many of us as employers we only employ 150 people but it's a challenge. Recently the national living wage has been announced which is great I welcome that it's up to a level now well it will be up to £10 40 or 41 something like that but as food producers we tend to be in the lower sector of paid employment and so what I would ask the politicians to try and do with whatever powers that you have is to always ensure I know this is a sound bite but always ensure that work pays because we've had people who are near to the bottom of the pay structure and that their work impacts with what benefits they can claim and as a result they fall out of labour they fall out of work and that is something that affects food producers particularly the food chicken people you know people who are on the sort of the lower rungs if you like of the food chain no pun intended and the second thing was because of the labour shortage we've been looking into trying to work with the sponsorship scheme to bring in people from abroad so at present we've got a very nice chap working with us who's got licenses to stay here in lieu of the fact that he's married to a UK national from Nepal. We've been trying to bring people over but it's we are a type of company that would always follow the law and best practice so by doing that we simply cannot afford to bring people who want to work in Scotland they want to live in Scotland and obviously therefore contribute to the tax take and all the rest of it but they can't come in. I'll tell you for why 25,600 is the minimum we have to pay them plus the costs of getting them in which makes it up to about £29,000 per year and they cannot work more than 48 hours a week so you do the maths for us it doesn't work if it was just slightly lower then us and our colleagues in the northeast because what Andrew was saying was right about the fact that we need to work together with other businesses we don't like to when we see other fishmongers closing because we're all in the same ministry but our colleagues in the northeast who have seen lots of their staff needs to go back to Eastern Europe they could benefit from that type of thing too if that threshold was reduced. I'm sorry if I've taken too long. Thank you for your kind comments as well they're much appreciated. I agree with both of those points and they demonstrate I think two things the importance of thinking about unintended consequences in policy something perhaps Governments don't do enough and making sure that the policies we are introducing have the desired effect also highlight in many ways the split of responsibilities between this Parliament and the Parliament in London and the importance of us trying to work notwithstanding political disagreements in the same direction so you've highlighted there the importance of two things firstly because labour shortages and skill shortages it doesn't matter the sector I speak to that issue is always at or near the top of the agenda at the moment so firstly we've got to maximise participation in the labour market from our own population and there's more we can do there that is about skilling up skilling reskilling supporting people into the workforce and as you say as we rightly try to raise wages particularly at the level of the living wage that we are not putting people out or disincentivising the work for people now that is one of the splits in responsibility because we don't control all of the rules around social security we control more than we used to but not all so we need to think about that but secondly we need to ensure that we have the ability to attract people into the country and you know that I think immigration generally is a good thing it encourages different countries cultures faiths to better understand each other diversity is a positive but we've got a hard economic need to make it easier for people to come to the country this parliament doesn't control immigration I think we should have greater control over immigration but we spend a lot of time trying to make the points you've just made to the UK government so that particular one you've made and it's one of many I could make but the president officer will get shirty with me as she often does because I go on too long I'm not even looking at her just now because she'll be glaring at me this is one of the advantages of this position president officer I don't see your glaring looks but that the salary threshold so I met the prime minister a couple of weeks ago up in Inverness that was one of the points I was making to him the salary level is too high and you know we need to reflect average salaries in Scotland in order to make that as well as taking away a lot of the other bureaucracy so the points you make are well made and I can assure you where we can we will take them into account in our policymaking but we'll continue to make these points to the UK government where appropriate thank you thank you first minister I'd like to thank delegates for the questions we don't have time for more at the moment but there will of course be opportunity for debate and discussion as the morning goes on before we break can I ask all workshop co-tears and speakers to remain in the chamber parliament staff will escort you to your relevant room but can I just suggest that we thank the first minister Andrew Murphy and all who've taken part in this morning's session thank you delegates are now invited to make your way to the garden lobby