Chancellor's speech to the Commonwealth Games Business Conference
Chancellor at the Commonwealth Games Business Conference in Glasgow.
I’m delighted to be here in Glasgow on the eve of the opening of the 20th Commonwealth Games.
Delighted to be at this Business Conference hosted jointly by the UK and Scottish governments - so we match your sporting success with economic success.
You can sense the excitement and anticipation for what will be a fantastic festival of sport.
The Games are bringing thousands of people to the City.
And they’re providing a wonderful opportunity to showcase the many things Glasgow has to offer – in tourism, business and culture.
The Games will be a highlight of a summer that has already included the International Festival for Business in Liverpool…
…the hugely successful “Grand Depart” of the Tour de France in Yorkshire…
…the NATO Summit in a few weeks’ time in South Wales…
… And then there is the key moment here in Scotland in September.
The tense show-down between two rival campaigns.
I’m referring, of course, to the US and European teams for the Ryder Cup at Gleneagles.
Each of these events this summer reinforces the UK’s already powerful global ‘brand’.
There is another important date in September when the eyes of the world will be on Scotland and the UK…
…but that is not for now.
What is for now is how we build on the fantastic opportunity of the Commonwealth Games with their unique atmosphere encapsulated by the other name they go by- the ‘friendly games’.
We were aiming for the London 2012 Olympics to generate £9 billion of additional business for the UK within 4 years. In fact we achieved £11 billion worth of business within 14 months.
I’ve no doubt that the Commonwealth Games will generate similar opportunities for Glasgow, Scotland and across the whole UK.
Already the Games have made a huge impact in transforming the landscape of Glasgow.
From the fantastic new sporting venues like the Emirates Arena, the Sir Chris Hoy velodrome and the new National Hockey Centre at Glasgow Green…
…to the Clyde Gateway regeneration of the east end of Glasgow, which has already encouraged Torishima, the Japanese engineering company, to establish its European Headquarters there.
This week Glasgow is at the centre of the Commonwealth. And it is a city with global ambitions.
The challenge is how we in the UK can fulfil Glasgow’s ambitions and the ambitions of all the other great cities in the UK.
So there are three related things I want to talk about in my speech today:
- government’s ambition to make the UK one of the best places in the world in which to do business
- priority we attach to re-balancing our economy and ensuring that the benefits of growth are spread throughout every part of our country
- importance of cities as the engines of future growth and development
Britain – with our maritime heritage – has always been a trading nation.
And nowhere has that instinct to trade been stronger than here in Scotland.
Glance at any atlas and you’ll find Scottish place names on every continent.
The influence of Scots felt in economic development across the globe.
David Dunbar Buick – born in Arbroath – who founded the famous Detroit car company.
Thomas Glover – an important figure in Mitsubishi’s history – who made an immense contribution to the modernisation and industrialisation of Japan.
William McKinnon whose businesses – forerunners of Inchcape – spanned the shores of the Indian Ocean, from the coast of East Africa to the new lands of Australia.
But enterprise and wealth creation doesn’t stand still.
Scottish-based entrepreneurs are still leaving their own mark on the world by responding to changing tastes and needs.
Dundee’s David Jones whose company has sold millions of copies of some of the UK’s most successful video games across the world.
Ian Wood who developed from a local base in Aberdeen a world-beating oil and gas services company, now operating in more than 50 countries.
Professor Andy Porter, one of Scotland’s most successful scientists, who was able to turn his science into commercial success by finding a new way to fight ‘super-bugs’.
Historic achievements matched by modern achievements.
Look at shipbuilding.
Over a century ago one fifth of the entire tonnage of the world’s shipping was built and launched right here on the Clyde.
Today the Clydeside yards at Govan and Scotstoun are the UK’s centre of excellence for the design and production of high-value, complex warships.
Just a few weeks ago I attended the naming ceremony at Rosyth of our new aircraft carrier HMS Queen Elizabeth – the largest vessel ever built for the Royal Navy.
HMS Queen Elizabeth is an exceptional feat of engineering skill – with yards from across the country working together to provide a magnificent advert for the UK’s enduring manufacturing prowess.
So the restless search for new products and better ways of doing things is never-ending.
That’s why the need for reinvention and renewal is constant.
That’s why – as the Prime Minister has said – we are embarked upon nothing less than the full economic revival of Britain.
And that’s why we are working through a long-term economic plan for our country’s future.
A plan that is pro-business, pro-enterprise and pro-open markets.
Dealing with the deficit.
Creating the conditions for low interest rates.
Cutting corporation and jobs taxes.
Reforming our welfare system.
Investing in skills, science and innovation.
Modernising our nation’s infrastructure to build transport and broadband connections that are fast and effective.
And boosting the support we give to businesses looking to break into new export markets.
Diplomats in our embassies worldwide and government ministers are all part of Team GB’s salesforce.
In the last year I’ve led trade delegations to some of the world’s fastest growing markets.
I’ve been to China, Hong Kong, Singapore, Australia.
I’ve been out to Brazil, helping our companies to get new business there – including major new deals in offshore oil and gas extraction utilising the expertise we developed right here in the North Sea.
In the last month we’ve hosted the Chinese Premier in London – taking the next steps with new nuclear and oil and gas deals, and major new steps that make the UK the western centre for offshore Renminbi trading.
And this month I went to visit the new Prime Minister of India – one of the first senior Western delegations he has received since his election – to make sure our British firms are chosen to help India deliver their economic reforms.
Some of those fastest growing opportunities are in Africa.
That’s why today I can announce that UK Trade and Investment will expand into 7 new markets across Africa – 5 of which are Commonwealth countries – and increase resources in 6 others.
This will increase UKTI’s global presence to 109 countries. A presence that is helping traditional businesses like the Scotch whisky industry…
… to newer sub-sea technology companies exploiting their North Sea experience to create an industry that is now larger than the UK’s entire automotive sector.
And our plan is working.
The fastest growing major economy in the West.
A great record of job creation – 2.1 million new private sector jobs.
A higher employment rate than America.
And on the path to full employment here at home.
The fastest rate of business creation in our history.
And what is the number one destination in Europe for inward investment?
Yes – it’s the UK.
We’ve moved up the rankings of the world’s most attractive investment locations – moving ahead of Germany for the first time.
Only China, the US, India and Brazil are now ahead of us.
So after the Great Recession, Britain is once again on the move.
But the job is far from complete.
The City of London and the closely linked financial centres here in Scotland of Edinburgh, Aberdeen, Dundee and Glasgow are priceless assets.
Yet our economy has been too reliant on financial services.
So we’re giving priority to our science budget and attention to our manufacturing base.
We’re Europe’s top destination for inward investment.
Yet we’re winning only half as many new manufacturing projects as Germany.
So we’ve doubled the support to win high value opportunities.
Scotland is the most popular destination outside London for inward investment – with the number of projects at their highest level for 16 years.
Yet London and the south-east are still seen by too many global executives as the most attractive locations in the UK for inward investment.
So UK Trade and Investment is working with Scottish Development International to bring investment projects to Scotland – 82 last year, creating over 4,000 jobs.
Our exports to China are up by over 100%.
Yet the number of our medium-sized companies who are exporting is still much less than in Germany.
So we’re targeting support to mid-sized Scottish businesses…
…businesses like ClickNetherfield from Livingstone who are exporting display cabinets to Hong Kong and Macao…
…or MDT International from Aberdeen looking to secure export contracts for its oil and gas training.
The government’s mission is clear.
We want to see a country that invents more, designs more, manufactures more and sells more in export markets across the globe.
And we want a recovery that benefits every part of our United Kingdom.
Scotland is at the forefront of our economic revival.
Scotland’s economy has now been growing for 7 quarters in a row.
Nearly a quarter of a million new private sector jobs created in the last 4 years.
Scotland’s contribution to the UK family of nations is as distinct as it is strong.
To put it in business language – Scotland has its own unique brand.
Yet Scotland is also an integral part of what makes the UK brand special too.
The one enhances the other and vice versa.
Surveys show that when foreign investors look at the UK what they value most highly is not just our rule of law, our open markets and competitive taxes, but also our quality of life, our rich culture and language, and also our diversity.
It’s one of the reasons why the UK is the dynamic and successful country it is – and has been over many years.
Because while we are a country bound together by shared values and common purpose, the UK is also a country full of variety and – how can I put it - creative family competitiveness. As we’ll see in the games.
We want to unlock the potential of every part of the country.
That’s why UK governments have actively pursued a de-centralising agenda.
More powers devolved to the Scottish Parliament and the Wales and Northern Ireland Assemblies.
25 deals signed to give cities greater responsibility for supporting economic growth in their area.
Billions of pounds allocated to local enterprise partnerships to invest in projects delivering long term value.
This is an agenda that enables different parts of the country to play to their strengths whilst still being able to capitalise on our core national assets…
…access to a large domestic market…
…availability of a deep pool of skilled workers…
…and integrated research and innovation…
…international influence acquired over many years…
…an established and respected business environment…
…underpinned by one of the strongest and most stable currencies in the world.
In short: all the benefits of local decision-making with the combined strength of the UK.
My final point is the importance of cities like Glasgow as the engines of future growth and development.
The top 600 cities in the world contain just 20% of global population but create 60% of global GDP.
In a modern, knowledge-based economy, size matters like never before.
All the evidence is that businesses and entrepreneurs want to flock together more than ever.
To form clusters where they can learn from and spark off each other.
A great global city has many things.
Great jobs and businesses.
Strong universities and hospitals, colleges and schools for aspirational families.
It will have the entertainment, the green spaces, the housing, culture and sport that make for a good lifestyle.
Fast and effective transport connections.
What could be a better symbol for innovation, ambition and growth for our cities than HS2?
A project that will…
…connect 8 of the 10 largest cities in the UK…
…and provide a vital economic boost to places like Manchester, Liverpool, Leeds and yes Glasgow – cutting up to an hour off the journey from here to London and contributing £3 billion alone to the Scottish economy.
London is a great global city.
But the UK needs other city powerhouses to compete in the world.
I’ve spoken this summer of the Northern powerhouse we can build in England, bringing Liverpool, Manchester, Leeds and Hull together.
Here in Glasgow there are all the ingredients for success on the global stage.
A vibrant city centre.
Three impressive and go-ahead universities.
Iconic museums, galleries and architecture.
Great public spaces.
A rich sporting tradition – with the venues to match.
Civic leaders from across Glasgow and the Clyde Valley who are working together as partners in a common cause with unity of purpose.
It is partnership and co-operation, which makes the difference.
Whether it is people, councils or governments…
…standing together, working together, and winning together.
That’s the ticket for success…
…because in today’s world standing still is to fall behind.
We’re putting partnership into practice right here in Glasgow.
A few weeks ago the Prime Minister announced a billion pound boost for Glasgow and the Clyde Valley.
This largest ever City Deal is a genuine partnership.
The UK is offering £500 million of new funding to create a £1.1 billion infrastructure fund that will support projects such as the city centre-airport rail link, major improvements to the region’s roads and bus network, and the development of new employment sites.
The alliance of local authorities will be contributing £130 million of their own money.
And it’s good that the Scottish government has quickly agreed to match the UK government’s funding.
But City Deals are about so much more than road and rail links.
They provide the catalyst to enable the city’s businesses to harness technology and create new markets.
And we need to look behind the big headline numbers to the targeted initiatives that give a real flavour of the cutting edge opportunities now within Glasgow’s grasp as a result of this deal.
And I can announce today three further measures we are taking to support this City Deal and Glasgow’s vision.
First, the UK government will invest £16 million to support the new £64 million Stratified Medicine Imaging Centre of Excellence at the impressive new South Glasgow Hospital.
This is a hugely exciting new technology that has the potential to improve radically treatments for chronic diseases including cancer, diabetes and dementia – with treatments tailored to the patient’s DNA.
It’s a major investment in Glasgow’s growing life sciences industry – which will keep them at the cutting edge in this global race.
Second, we’re going to invest over £1 million to help establish a MediCity Scotland campus on the outskirts of Glasgow.
Medical Technology is already big business here, with ever more spin outs emerging from universities here.
We’re backing them today with this new a space where academics, entrepreneurs and clinicians will come together to develop new technologies and new businesses.
And third, we are going to invest in a new business incubator in the heart of Glasgow’s historic Merchant City.
It’ll house up to 125 businesses over the first five years – providing them with the very best facilities and mentoring so they can thrive.
These initiatives – taken together with the infrastructure fund – have the potential to create almost 30,000 jobs in the area.
And there is one further announcement I want to make.
I’ve spoken today about some of the things that make Glasgow special.
The things that make people want to work here, locate businesses here, and to live here.
I grew up in a family that valued design. My father created a manufacturing business based on interior design and it has always been part of my life.
The name of Charles Rennie Mackintosh – synonymous with iconic architecture and design - is a magnet that draws people time and again to Glasgow.
And there can be no doubt that the jewel in the Mackintosh crown is the Glasgow School of Art.
The people of Glasgow and many people far beyond were horrified when a few weeks ago fire ripped through the Art School, gutting its priceless library.
The UK government has already made a £5 million contribution to the Mackintosh Appeal to help ensure that the building is restored to its former glory.
And we are today making an additional £5 million contribution to support the School’s new Graduate and Research Centre.
Protecting the school’s strong heritage and equipping it for the future…
…at the forefront of Scotland’s creative industries…
…an institution secure in its position of world renown.
So my message to Glasgow is clear.
Your ambition is to succeed on the world stage.
My ambition is to back you… with new investments in science and arts pledged today.
Inspired by your glorious past.
Driven forward by promise of a more prosperous future.
A Glasgow confident of its place as a bright star in the UK’s galaxy of great cities.
Powering forward our country to greater economic success.
For we can say here on the eve of the Commonwealth Games:
Glasgow is open for business. Scotland is open for business. The United Kingdom is open for business.
Let us prosper together.