Ivan McKee is a busy man. As the Minister for Business, Trade, Tourism and Enterprise he's got several plates spinning at any one time - not to mention all the current distractions of the First Minister race.
Brought up in Glasgow, he got a degree in Manufacturing Sciences and Engineering from Strathclyde University and an MBA from Newcastle University.
After spending two years in Bangladesh with Voluntary Service Overseas, McKee worked for various manufacturing companies. In 2005, he started his own manufacturing consultancy firm and from 2009 to 2015 invested in, and led turnarounds of, several businesses in the sector - including buying assets from Dunfermline-based Simclar out of administration.
This career has included periods living and working in countries including Poland, Croatia, Finland, Norway, Bosnia and Estonia, as well as Scotland and England.
McKee was a member of the Labour Party during much of the 80s and 90s, but returned to political activism during the Scottish Independence Referendum as a director of Business for Scotland, making the economic case for a Yes vote.
After joining the Scottish National Party in 2014, he was elected as MSP for Glasgow Provan in 2016, before becoming Minister for Trade, Investment and Innovation in 2018. This turned into Minister for Trade, Innovation and Public Finance in 2021, before changing again to Minister for Business, Trade, Tourism and Enterprise in 2021.
Despite having a fair amount on, McKee spared Insider half an hour this week, in which we asked him...
- Let's start with the green freeports, something you've been heavily involved in over the last year or two - what are the next practical steps now for both the two winners and the three losers?
As you know, we were initially against the freeport plans, but after lengthy negotiation with Westminster we became happy that they’d accepted our red lines and requirements around net zero goals and employment standards - crucially we didn’t want freeports like we’ve seen in the past and elsewhere in the world.
The Scottish model is very much about a competitive offer for renewable and offshore technologies, with environmental standards and workers rights embedded. From that perspective, they can be seen as a government approved opportunity to invest in the net zero sector, with clear guidelines; which is something that should give us a competitive advantage post-COP26.
In the last few months we've had a number of conversations with big, international, inward investors around the chosen sites, and having the freeport designation gives real impetus, so the successful bidders are now just working through the processes and mechanics of setting things up, with a formal launch to follow.
Of course, we're also conscious of the non-winning bids, and we're working on other things to support them. Conversations are happening with the UK Government on other sources of funding, specific projects and other mechanisms. Plus there's the city region deals too, and innovation money for Glasgow.
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Around this time last year you gave a speech at our Made in Scotland Awards announcing the Scottish Government's Low Carbon Manufacturing Challenge Fund, how are initiatives like this helping to keep manufacturing industries in Scotland alive?
Our Innovation Strategy is actually due to be published soon, looking at how we take research and development from Scotland's universities and translate it into start-ups and spin-outs, as well as how we then grow them at scale.
There's potentially plenty of public and private sector investment, but we need some clarity on the sectors we want to support. It will also look at the broader infrastructure, innovation centres, funding streams, and how that all nits together.
There’s that maxim that we don’t need to be good at everything, but what we are good at, we must be best in the world. I think Scotland is spoilt for choice though, with a genuine claim to leading the world in many sectors, which really puts us on the front foot in terms of industrial interventions.
In building this strategy we've had groups round the table from various sectors and companies, universities are also central - Jim McDonald at Strathclyde University has been a key part of it - as well as road testing ideas with other sub groups and enterprise agencies.
- Another of your ministerial hats is trade, so can you give us an update on how import and export policy is coming along, particularly in terms of how you work with Westminster on things like the big free trade agreements?
Trade technically is reserved of course, but with the FTAs they’re pretty broad and impinge on many developed issues - things like agriculture and environment for instance. For our part, we try to push for best practice, looking to policy in places like Canada, Australia, etc, whereas the UK Government's approach appears a lot more haphazard.
The devolved nations have been keen to be involved early in the process - and we do have engagement on a regular basis with the UK trade ministers - although there have been six changes to that particular post in the few years I've been involved. We certainly try to impress on them the importance of our views.
The bulk of the legwork, of course, is just businesses going out and selling stuff, regardless of the barriers.
We try to be very active in assisting them wherever possible. The Export Plan from three years ago still gives clarity on how we deal with different types of businesses, while Scottish Development International has been focusing on certain sectors - like life sciences, food and drink, renewable technology - getting boots on the ground and arranging ministerial visits or trade envoys.
The statistics are interesting on this: goods exports from Scotland, excluding oil and gas commodities, are currently at twice the rate of the rest of the UK, post-Brexit. Of course the European market is still complex and difficult, but things have stabilised from the early days of us leaving the EU. It’s still messy though, so we do a lot of handholding and work to get the best intelligence on which paperwork businesses need to provide.
It will be interesting how the Northern Ireland Protocol works in practice. We're looking into things like setting up direct shipments from Scotland, looking at some of the fairly dramatic interventions Ireland made on this. It's a bit chicken and egg though, as nobody wants to get involved until it's cheaper and easier, but it won't get cheaper and easier until companies get involved - so we're seeing what could be done to break that down those barriers.
- You also cover tourism and enterprise, so I'm interested in the work being done to support sectors recovering from the pandemic, as well as asking about recent concerns raised about the impact of the Deposit Return Scheme and short-term lets legislation?
We're certainly conscious of the turmoil that the tourism and hospitality sectors have faced in the last few years, and there has been specific financial support given during lockdowns, etc. We also froze poundage, which cost £300m or so to do.
On the regulation and legislation piece, we recognise the problems and we’ve put a business regulation taskforce in place. This has involved discussions with industry leaders, and rather than getting deep into the detail of each issue, we're trying to work out whether the process solid, is the impact assessment correct, what's the cumulative impact of different regulations at different times - and then trying to coordinate that better.
A big part of this is centred around skills too, with labour market inactivity being a key focus. Scottish numbers are coming down below the rest of the UK, which is welcome, but we still want to attract more people to live in Scotland.
Particularly within the rural tourism sector, we're also working on digitisation for smaller businesses, and then on energy costs - which is mostly reserved - we've been keen to impress upon the UK Government the need for more support.
As for actual tourists, things have held up pretty strongly, with European, North American, Asian tourists all returning at levels almost back to pre-Covid; although we're still working to get more direct flights up and running again.
When it comes to tourist taxes, we're working through the detail right now, but it's a pretty internationally accepted way of doing business. Most of the conversations with sector have been about what the money is then used for.
And finally, on short-term lets, it's really about levelling the playing field. Again, the detail is being worked though there, but I do expect that to have an impact.
- You mentioned jobs and skills there, which is an issue which keeps on being raised by people we talk to, so what specific interventions can government make to alleviate some of the shortages in certain areas?
We've got remarkably low unemployment at the moment, but there's still a high level of market inactivity post-pandemic. There are a whole raft of issues why that’s so stubbornly high and we're working our way through solutions - be it childcare, better flexible working, etc.
Within the tourism sector, did some work specifically to communicate how jobs within it can be more of a career than just temporary, seasonal work. Some of that is also to do with pay rates and benefits and we’re focused on getting more companies adopting Real Living Wage minimums.
When I talk to inward investors, they often praise Scotland's skills pipeline from our colleges and universities, so we’re clearly doing something well there. But we have to work to make sure these educational institutions are focused on vocational skills that are required across the economy.
- A final word then on financial services and fintech, which are sectors you've been keen to foster; can you give any updates on work being done to continue growth, from the tech start-ups to global institutions?
We've got a really good ecosystem - I was having conversations with Virgin Money only yesterday, who are setting up their new base in Glasgow - and that's alongside BNP Paribas in the same 177 Bothwell St building, so we're start from solid foundations.
This is a key focus area for inward investment, with much of that coming recently in our vibrant fintech sector, which has seen rapid growth, in part due to our Global Capital Investment Plan.
There's a lot more work happening to help funnel investment, and we're taking on board the recommendations of the Logan review on tech scalers, as well as the Stewart report on women in entrepreneurship; both of which have been an opportunity to ensure clarity on what we need to do.
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