In her lecture, delivered on 31st May 2018, Leader of the Scottish Conservatives Ruth Davidson MSP sets out her vision for improving the Scottish economy and addressing some of the deep-seated challenges Scotland faces over the next ten years, focusing on Brexit and immigration, health funding, education and housing.
“Good evening and can I start by thanking Anton and everyone here in Glasgow for permitting a graduate of Edinburgh University to address you this evening.
And I very much welcome the opportunity that the University has given me to talk at greater length to you all this evening.
And given I’ve got the time, I want to use this evening to look at the big long-term challenges we face ahead of us in Scotland and all around the UK – challenges which are being faced by most developed countries around the world.
And how we best we overcome them.
Let me begin by talking you through some of my thoughts and experiences from over the last 12 months.
For starters, it’s been a highly unusual working year for me.
After being elected to the job of leading the Scottish Conservatives in 2011, electorally, it has barely stopped.
Two local government elections, a European election, an independence referendum. A general election, a Scottish parliament election, a Brexit referendum, another general election just last year.
It has been a remarkable, dizzying period. As a former journalist myself, I’m only glad to have provided my former colleagues with so much copy.
But politics isn’t about newsprint – at least not primarily.
And the truth is that this period has not exactly been conducive to reflective thought or considered political analysis.
This last year, however, has been a little different.
We’ve finally seen a period which hasn’t been dominated by the prospect of another referendum or an imminent election campaign.
We’ve been able to put away the leaflets and leave peoples’ doorsteps undisturbed for a short while – for which I’m sure Scotland is truly grateful.
And instead, we’ve been able – briefly – to catch our breath.
I don’t want to overdo it – it’s not as if British politics is currently occupying Sleepy Hollow.
Brexit has seen to that.
But I and my team in Scotland have at least tried to use this spell to consider the road ahead.
The truth is that we need to.
You may remember back in 2016 that we ran an unusual campaign at the Scottish parliament elections.
The SNP were so far ahead in the polls, and we were so far behind in third, we ran on the promise of forming a strong opposition. Not quite Vote for us, we won’t win. But vote for us to hold the winners to account.
Well, that was fine then. But – and I’m not breaking any secrets here – that isn’t a campaign you can run twice.
So as we look ahead to the next election – in 2021 – myself, my team, the whole party – needs to show, not that we have a plan to be a strong counterbalance to government, but that we are a credible force to run the government.
And that requires us to think more deeply about the Scotland we want to help build – not just for today or tomorrow, but five years, ten years, twenty years time.
For me, that doesn’t necessarily begin with a policy announcement a week or a plan for the first hundred days, three years ahead of time.
It begins with an analysis of where we are as a society, and where we are heading.
…an analysis that, in my case, comes from my own perspective as a politician from the centre-ground Conservative tradition; as someone who wants to use Government to enable people and communities to grow and prosper.
So where are we – and how should we respond?
Go to the book shops today, and you’ll be told that we are never more fortunate to be alive than right now.
Bill Gates’ favourite writer Stephen Pinker informs us that, when you look at the data, our world is the best it’s ever been.
Less than 10% of the world subsists in extreme poverty – compared to nearly 90% 200 years ago.
At the time of the Scottish enlightenment, a third of children in the world’s richest countries did not live to see their fifth birthday. Today, in the poorest countries, that figure is just 6%.
Literacy is at an all-time high. We may fear terrorism, but fatalities compared to thirty years ago are actually down.
As befits his name, Pinker sees the world through rose-tinted spectacles. The population of the planet has never had it so good.
Except that’s not the way most of us see it.
Also out this month, the think-tank the Resolution Foundation has published a report on Inter-generational fairness.
Yes, people feel positive about the opportunities that lie ahead for us. We agree that we have opened up opportunities for women, ethnic minorities and gay people far more so than we did for their predecessors.
But pessimism abounds. When asked about young people’s chances of improving on their parents’ lives, pessimists outnumber optimists by two-to-one. And that’s true in Britain as it is for other advanced economies.
The fact is we are living in a time of huge social and economic disruption.
People are therefore increasingly fearful of our ability to keep pace and cope.
And as I have written a number of times, it feels to far too many that these changes are not working for them.
Britain – like most advanced economies – has migrated from a largely manufacturing based economy to a service-led one.
We are about to enter the fourth industrial revolution – one where technology is about to change not just the world of work, but the very concept of work itself.
That’s exciting but, as this change hurtles towards us, old certainties are disappearing with it.
So while it’s all very well for me, or other centrist politicians to espouse the merits of a market economy, how does that work for a teenager growing up in a pit town with no pit, a steel town with no steel, or a factory town where the factory closed its doors more than a decade ago?
How does that feel to a member of Generation Rent, moving to London for their best shot, living in Zone 6, paying half their stagnant salary on a commute, knowing all the while there is no chance of saving enough to ever own their front door?
Or to a pensioner, coping with multiple health and mobility issues, fearful the social care available isn’t enough to meet their needs?
Little wonder that the populist left and right makes advances in such a time.
All the greater need for the centre-ground – for those of us who do believe in markets and liberal values – to find a way to meet this pessimism, fear and disaffection and show that the centre can hold.
This is something Conservatives in Scotland have grappled with before.
Between the world wars – another time when society was in flux – and when populism rose through Europe, thinkers like Noel Skelton considered similar issues.
And his observation was typically Conservative and practical: for people to be part of a capitalist society, then they first had to have capital.
Thus he trumpeted the importance of a property owning democracy and schemes to ensure assets were held more widely.
And my central point is very similar.
Ten years after a financial crash whose effects are still being felt, we need to rebuild consent in our capitalist system, in our institutions and a liberal way of life.
And that requires two big jobs.
First to deal with the fundamental issue: we must deliver sustainable economic growth.
And, second, we need to work out a way to ensure that, as we enter this new age of disruption, we make our system work better for people – or at least better than we’ve managed over the last 20 years.
That’s the rather ambitious subject for my speech this evening.
I don’t come here this evening with a 5,000 word solution to capitalism, the universe and everything. What I want to share are some reflections and examples of what, I think, is required.
Of what will be necessary for me and of my party if ever we are fortunate enough to get into government.
So – let me take the first part of that challenge: delivering real and sustainable growth.
The scale of the challenge facing us is not inconsiderable.
Growth is forecast to be below par for the foreseeable future.
While in Scotland – according to the Scottish Fiscal Commission – we face the lowest period of economic growth since the second world war. Less than 1% per year for the next four years.
The oil price has nudged up – but the past few years have still been tough for the industry.
We face the undoubted turbulence that Brexit is going to bring with it – something I don’t seek to underplay.
And we face the ever present question mark over how we tackle the challenges of an ageing population.
What’s clear is in facing up to all this, we simply can’t continue to stumble along with below average growth levels for good.
We need to solve this.
It does sound daunting, and I hope I haven’t depressed you all completely already.
But, as someone hoping to lead the Scottish government, I find myself distinctly on the side of the Pinker-ists.
So, enough of the gloom. Let’s focus on the positives here in Scotland.
And let me start by reading out some of our research team’s favourite statistics.
In food and drink, last year, we exported 370 Olympic swimming pools’ worth of whisky.
Enough to fill Campbelltown Loch. Six times over.
In life sciences, there’s a blood glucose test made in Inverness used around the world – and 6,500 people use one every single minute.
In engineering – the world’s most powerful lab-based laser isn’t in Switzerland. It isn’t in Silicon Valley or Shanghai. It’s just along from the coffee shop of Glasgow Cathedral, in Strathclyde’s labs.
And for every 100 pounds awarded by a UK funding body to universities, 22 comes to Scotland – nearly three times our population share.
This is a formidable economic foundation. It shows that Scotland has the intellectual and economic firepower to become a global leader in new and established technologies.
We have plenty going right. So the issue facing us is: how do we make more of it?
I have a long list.
Delivering the right physical and digital infrastructure in both urban and rural Scotland.
Making sure we have a tax regime that doesn’t put off investment but instead incentivises it.
Building an education system that gives us the right mixture of learning and skills.
All vital – but, since I don’t have time to run through them all, let me this evening focus on two words that will define our success and which I believe are particularly relevant to institutions like the one I’m standing in.
And those words are – innovation and collaboration.
Because, if we are going to really put rocket boosters under our economy, we must grab hold of the massive new technological changes afoot – and embrace innovation…
… and to do so, we must tear down the silos that separate private from public and work together in harness – a real collaboration.
What does this look like in practice? Well, if you want the perfect example, let’s start right here at the University of Glasgow.
As I said earlier, we are on the verge of our fourth industrial revolution, with technological advances in everything from cars to financial technology about to transform the way we live our lives.
I know it is daunting. But it is exciting too – especially when we discover that many of these technological leaps are being developed right here.
Take quantum technology – the development of small, microscopic devices.
We are going to see the development of miniature atomic clocks for accurate tagging of financial transactions, rangefinders essential for future driverless cars, even micro sensors with sufficient sensitivity to screen for diseases like cancer.
And it’s Glasgow that could become a world leader.
This University plays host to QuantIC, one of four Quantum technology hubs around the UK, which specializes in innovation in imaging.
And I understand the vision now is for Glasgow and Strathclyde to join forces to create a new Innovation Centre, bringing together thought leaders and entrepreneurs to push ahead with research and development ideas that can be taken to market.
Right here in Govan. Building on the engineering traditions of this city.
Backed by public investment. Academia, industry and government working together – giving the UK a head start in what will, in a few years’ time, be a multi-billion pound market.
That, ladies and gentlemen, is what I mean by innovation and collaboration.
I pay tribute to the leaders at both Universities for setting aside institutional divides to work together on this.
…for understanding that, in a global market place, it is only by innovating that we can hope to maintain growth, and only by collaborating that we stay competitive.
It’s the exactly right template for the UK as whole to follow.
And I think it speaks to another thing we need to get right.
Most public sector economic development is done at a national level. But that’s too big a scale to meaningfully read the diversity of local economies and really understand regional clusters.
Or, it’s done by local authorities who are committed – but are too small, lacking the scale and scope to make a difference.
One of the big, difficult things we could try and fix is to get public economic development at the right scale.
The City Deals are exciting in that regard. They understand that city-regions are the right spatial level to get stuff done. And that public spending alone isn’t enough – that you need to tie investment to specific projects and real outcomes.
But the City Deals should only be the start.
There’s a role for better regional or local efforts to match the public and private sectors.
And this is something understood by business.
Take Sir Ian Wood, for example, one of Scotland’s greatest entrepreneurs.
In Aberdeen, he has invested £25 million of his own money in a company called Opportunity North East.
With that capital in the bank, he has sought out private sector matched funding to invest in the great growth industries of the north-east: food and drink, oil and gas, life sciences and tourism.
Investment that is private sector led, but is also bringing in public sector agencies to ensure delivery, and has the local expertise to know its market well.
Unfortunately, we can’t rely on Sir Ian to shell out his own money in every part of Scotland.
That’s why I’d like to see the public sector stepping in to use its convening power as well as its capital commitment. Forming “growth partnerships” in every area of Scotland, leveraging in private sector funds, and working together with business to invest.
Not squeezing out private investment – or adding to an already cluttered government landscape on economic development.
Instead, ensuring that the leaders who know our regions best – whether they be private sector, public sector or whatever – can collaborate together to drive what works
Bill Clinton’s team famously said it’s the economy, stupid.
My response would be – well, that takes geography, stupid.
And that same focus on innovation and collaboration done at the right level is also why we are examining a new idea to help online firms in Scotland sell their products around the world.
Currently there is no specialist advice or training on ecommerce available from public bodies in Scotland. So if you’re a firm trying to get behind the paywall of China, at the moment, the help you get from our enterprise agencies is minimal.
So we’re looking at setting up an Institute of E-Commerce for Scotland – backed by the Scottish Chambers of Commerce – to help online firms do just that.
Entrepreneurs don’t need babysitting; they just need a helping hand
Because we start with the wind at our backs.
It can’t be said enough that Britain as a whole is blessed with the advantages we have.
As the European hub for the fintech industry.
As a world leader in life-sciences.
And ready to take advantage of the coming artificial intelligence revolution which could add more than half a trillion pounds to the UK economy by 2035.
This is where the growth is going to come from.
And while it may be terrifying to acknowledge that, for example, most jobs to be occupied by the next generation haven’t yet been invented, we need to face this future with boldness.
Not to wind the clock back to some misremembered golden past.
We need, instead, to have government at Westminster and Holyrood prepared to embrace these possibilities.
To be brave enough to remember that the free flow of ideas, goods, services, people and capital is always the right way to go.
Brexit, of course, brings with it a fear from many that we will forget that truism.
That Britain is getting ready to raise the drawbridge and pull down the shutters.
But I don’t believe that is inevitable – just as I don’t believe, had we stayed in the European union, our course would have been set rigidly either.
In or out of the EU, our task remains the same: to be open, not closed, to the world around us.
To always look outwards for opportunities, not inwards for cold comfort and the apportionment of blame.
Let me, for example, take the most controversial policy area facing politicians here: the question of immigration.
We have, in this country, allowed immigration to be a concept that worries us. Some sort of problem to be fixed. A wrong to be corrected.
It is a view I believe we need to challenge.
We should have the confidence to recognise that people from other nations wanting to come to our country is a sign of our success as a vibrant, prosperous culture.
And we should acknowledge that, if we want to build a strong economy, then we need people to come here.
Not just to help support the labour market in less populated areas of the country – although that is required.
But also to make our country stronger.
We want EU citizens who live here to stay. I have an interest here: I speak as someone who is about to marry one.
And to assure EU citizens and others of that wish, we need to do more.
I have said this before but I will repeat it tonight: I see neither the sense nor the need to stick to an immigration figure devised nearly a decade ago, which has never been met and does not fit the requirements of the country.
Setting an immigration target reduced to the tens of thousands is one thing when unemployment is running over 8%. Refusing to review it when the country nears full employment and sectors are reporting skills shortages is quite another.
Even if that target were to stay, I see no reason why overseas students should be included within the numbers counted.
And, after leaving University, I would also like to see graduates hailing from other countries, but trained here, given more opportunities to stay in Britain so they can continue to put that UK academic investment to the common good.
This, I know, is something that the University of Glasgow feels strongly about. I do too.
And even setting all of that aside – there’s a strong self-interest here.
Because if we are to grow our economy – if we are to collaborate more and innovate more – we will do far better by seeking out people with the correct skills, and asking them to make Scotland and Britain their home.
And I believe, passionately, that the majority of Britons respond to this.
It’s been notable that, since the Brexit vote, polls have shown that concerns over immigration are actually reducing. It is not a side-effect I had foreseen from the vote, but, if sustained, I believe it is a positive one.
Brexit requires the country to make decisions at a UK level on aspects of immigration previously held by Brussels. As we have to shape those arrangements, I hope we can create a mature system, which leads to a more settled country.
…one that respects people and families whose right to live and work here should be unquestioned – like the Windrush families.
…one that sends out a message to our friends and allies around the world that we are the country we’ve always been: an outward facing, welcoming, trading nation.
Being open. Not closed off.
Innovating and collaborating.
Welcoming the change that is coming. These are the ways to help ensure we address that first big task: to get the economic growth we need.
But, as I said in the introduction to this speech, I rather fear that if we are to face up to the challenges of the coming years, that isn’t the job done, nor anything like it.
Aid the economy, wait for the riches to spread themselves around, and congratulate yourself on a job well done – that sort of thinking is from a different age.
The trouble is that there is, as I said, a deep and abiding sense that the benefits of economic growth and technological advances are not being shared by all.
That winners and losers are more polarised than ever.
And that – while we can all agree that globalisation is the only way to bring ever greater economic growth, that those arguments cannot satisfy people who are left on the sidelines.
Last week, I shared a stage with Alistair Darling at an event on the future of the Union.
Reflecting on this recent period in our history, he pointed out how it was our failure to deliver on behalf of such people that was leading to a rise in populism.
Put it this way: if you feel you’ve got nothing to lose, no stake in society, no place in the modern world, why wouldn’t you listen to somebody promising to tear down the system and start again?
And so, while delivering economic growth must be the first priority, we cannot sit idly by and think it will, alone, be enough.
Government must act – to restore our social contract: the contract that only supports free markets, that only supports a liberal society, in return for a better life for all.
So, in the time I have left, let me use the rest of this lecture this evening to talk about just a few ways I think we can do that.
And I’ll focus on three particular areas which I believe are of importance if we’re going to bring people with us.
Firstly, fixing our broken housing market, especially for the younger generation.
Secondly, better technical and vocational education for young people who choose not to make it to great institutions like this; or for whom that choice is made for them.
And, thirdly, delivering care and decent support for our increasingly ageing population.
First, on housing.
As I said in a speech last week, if members of my party aren’t worried about the attitudes of the younger generation to my party then they aren’t paying attention.
We are simply losing the argument. Period.
The answer is categorically not for Conservatives to don hoodies and caps and try to get down with the kids.
The answer is to tackle the actual issues that the younger generation are facing.
And top of the list here is housing.
In Scotland – which is by no means the worst affected part of the UK – the number of people up to their early thirties privately renting has tripled since the birth of devolution. Tripled.
Till last year, I was one of them – before I finally managed to pull together the funds to hurdle the barrier of a deposit.
And forgive me for stating the bleeding obvious – but the best way to sort this is to build more homes.
Now, of course, many communities have perfectly reasonable concerns about this.
They fear ugly new developments being bolted on to their towns or villages, with no extra infrastructure to deal with new neighbours.
And they suspect developers of making a fast buck with little concern for their quality of life.
Government can help.
One idea that’s caught our eye and we’re looking to work up over the next few years is to create new powers so that we capture more of the massive uplift in land value that happens at the stroke of a planner’s pen when planning permission is granted.
This happened when we built new towns in the 50s and 60s. Landowners are paid the value of their land, but the extra funds that comes from planning permission can be used to invest back into the community.
For example – to pay for higher quality developments, greater civic space and more infrastructure.
In Scotland, I’d support a new national Housing and Infrastructure Agency tasked with coordinating this – to select the areas where such land value capture purchases could take place, to make sure, for example, that new developments aren’t dumped down carelessly, but are about making Scotland more beautiful. And by proposing and planning a new generation of new garden villages and garden towns around the country.
With affordable housing as part of the mix – to curb the severe house price inflation that we’ve seen in this country in recent years – higher than in any other comparable OECD nation.
It’s just one idea among many others that, I believe, can help speed up supply.
There’s a lot to work through – and I don’t think we’ll have all the details nailed down for some time. But it’s a way to give younger people a better chance of getting on the housing ladder.
Tackle that and we can genuinely say that we are sticking by a key part of our social contract – that the next generation will have more opportunities than the last.
So – number two. Better skills and training support.
I understand – and give Tony Blair credit for – the intention behind his goal of “50% of young adults progressing to higher education”. But the side-effect of saying you want half of all young people to go to uni, is that you’re telling the other half that somehow they’ve failed. And it is nonsense.
So I applaud the work currently being done by schools to address this – with the greater focus on skills training we now see. I’m also supportive of the increase in apprenticeships that has happened in recent years.
But we need to go further – and start earlier.
Employers are telling us that we don’t have the right skills mix to support them boost productivity and grow the economy.
At the same time, thousands of young people need and want a world class technical and vocational education.
So I’d like to see rigorous, sustained work experience for school age youngsters becoming the norm, not the exception, with foundation apprenticeships available in every single secondary school in Scotland.
I think vocational and technical education should become an integral part of the school day, not an unusual add on.
And, across Scotland, we’d support the expansion of the Junior College model pioneered by Jim McColl – so 14 and 15 year olds who would benefit from this type of learning in every city in Scotland, can get the skills training they need.
With the overall aim being this: to end that assumption that, if you don’t go to Uni, somehow you’ve failed.
Instead to ensure that, whatever your path in life, there is a route for you to get skills, get training and get a decent job that brings self-respect and self-worth with it.
So – helping young people get on the housing ladder, giving people the skills they need …..
Both ways to ensure that we are supporting those who feel left behind by the current system.
…..finally, let me address the question of how we care for the sick and vulnerable and the cost of the NHS.
And here I fear I am going to stray out of my brief as a politician of a devolved parliament and instead speak for something that affects the whole United Kingdom.
We all know the challenge: we have rapidly ageing population piling extra demand on services. And, year by year, costs in the NHS – in the form of drugs and technology – are rising rapidly.
The NHS has dealt brilliantly with these challenges over the last decade, finding new ways to deliver and improve the standard of care.
But, as the Darzi review into the future of the health service has made clear, we are now reaching a tipping point.
And the simple choice is this: if we want to continue to adhere to the principles of our NHS – then we need to find extra funding above and beyond the increases of recent years.
This is pretty personal for me.
At five years old, the NHS first saved my life, then saved my legs, after I was run over by a truck outside my house.
They put me back together again a few years later when I managed to break my back.
My sister is a NHS doctor.
And, as you may have heard, I’ll be requiring the services of my local maternity hospital in the months ahead.
So I do not need reminding of the quality of care that we receive, the dedication of front line medical staff, and the importance of a health system that provides wraparound care for us all.
The NHS, the best expression of our country’s values that we have, is the foundation of this country’s social contract.
And if we don’t ensure it is put it on a sustainable footing over the coming years, we won’t just suffer as patients – we will see faith in that contract collapse completely.
It’s therefore greatly to be welcomed that the Prime Minister earlier this year proposed a multi-year funding plan for the NHS – the first time this has been suggested.
It will mean, I hope, that the NHS is able to plan properly and work more efficiently.
So as we prepare to mark the 70th anniversary of the NHS later this summer, I very much support the proposal for substantial extra funding across the whole of the UK to put the NHS on a firm and solid footing for the long term.
The obvious question is: where should this money come from?
I have no doubt that this will be the source of major debate within our party and across parliament over the coming months. Indeed, it has already started.
My view is this: the UK Government has acted to reduce the tax burden on working families. It has honoured its promise to do so. Raising the income tax threshold has reduced taxes for millions of UK workers and has taken thousands out of taxation altogether.
But the UK government has a choice to make.
And, if that choice is between extra spending on the NHS or introducing further tax breaks beyond those already promised, I choose the NHS.
Either way, we should have the honesty to recognise that this is a moment where we as a country have to choose one way or the other.
My view is that people across the UK would not forgive us if we allowed this moment to pass.
The primary importance of extra funding will, of course, be felt in hospital wards and GP clinics across the UK.
But – as I’ve tried to set out in this speech this evening – I believe it will also help tackle the wider crisis of trust we face in this country.
And, in so doing, restore faith in those centre-ground values, shared by both Conservative and Labour moderates, that are without question under threat right now.
Let me end on a note of optimism.
Last week, I attended the launch of a new think-tank in London called Onward.
Set up by Neil O’Brien, a Conservative backbench MP, it brings together some of the best and brightest thinkers in our party to look at some of the issues I’ve touched on here this evening.
How to build an economy that delivers for all. How to tackle the technological changes we are seeing around us. How to deliver real localism, so people and communities feel they are in charge of their lives. And how to give the younger generation a greater stake in society.
It was a genuinely uplifting experience to see a group trying to grapple with these big, strategic challenges we face as a country, and doing so with real vigour and purpose.
I very much hope similar think-tanks pop up on the centre-left as well. Just as it’s good to see, here in Scotland, think-tanks also being set up, eager to contribute to these areas.
Now: I am not naïve: over these next few years, our departure from the European Union will be the dominant fact of our political discourse.
Just as Scotland’s own constitutional path has provided our newspapers with plenty of copy over the last decade or so, so the twists and turns of the negotiations in Brussels will be the focus of attention.
The Prime Minister will keep being asked whether she can survive the latest so-called crisis.
I will keep getting asked what I think about Boris Johnston.
The merry-go-round will go on and on.
But just as the focus on all this is right and fair, so it is important that – as a country – we don’t lose sight of the bigger picture.
That we don’t stop thinking, innovating and working together.
And that we find a better way to share our country’s benefits with all the people who live here.
For all the turbulence, I feel confident that we are doing just that.
Thanks to clear sighted policymakers.
To leaders in business and industry.
And to institutions like this great University.
So let me end where I began: thanking the University of Glasgow for the work you do.
As we peer into the future – let’s go forward not with fear, but with confidence that the values you espouse will deliver the kind of country we can all be proud of.