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Scotland’s economic transformation – who will be judged?

Written by Kyle Mcintyre, senior client manager
Edited by Kevin Pringle, senior partner

2 March 2022 

Good morning,

Yesterday, the Scottish government published its much trailed National Strategy for Economic Transformation setting out how the government, public bodies, third sector and businesses can use current economic powers to deliver transformation in the coming decade. Finance Secretary Kate Forbes, addressing a room of businesspeople at the launch in Dundee, said that the strategy would “ensure Scotland is indeed a fairer, wealthier and greener nation by 2032 because we took the decisions required to transform our economy as we emerged from the pandemic.”
 
The strategy sets out how, over the next ten years, the Scottish government aims to deliver economic growth that significantly outperforms the last decade, so that the Scottish economy is more prosperous, more productive, and more internationally competitive.
 
With a heady mix of green and net zero ambitions, reducing poverty by creating a ‘wellbeing economy’ and creating a Scotland recognised as one of the best countries in the world to start and to grow a business, the plan certainly doesn’t lack ambition.
 
So how was it received? Lukewarm. The STUC were quick off the mark, describing it as “more a strategy for economic status quo than economic transformation” while Scottish business titan Sir Tom Hunter said it was “a long wish list with no magic wand to deliver it, which I do not believe is market-tested nor pragmatic.”
 
Others were more positive. The Scottish Council for Development and Industry welcomed the strategy’s “focus on increasing innovation and enterprise” and said “the emphasis on delivering collaboratively is right.” Sandy Begbie, the chief executive of Scottish Financial Enterprise, said “It’s encouraging to see entrepreneurial growth as a core focus of the strategy, something that we have been calling for. The key now is to deliver.”
 
And that’s the point, delivery. The Scottish government is often criticised for being great at setting up ‘advisory panels’ and ‘consultations’, but less effective when it comes to delivery and outcomes. But a plan must surely be welcome, especially after the challenging couple of years business has faced.
 
The government wants to create a fairer, wealthier and greener Scotland, recognising that it’s through a strong successful economy that we can best lift living standards. That means getting behind business and ensuring government promotes, rather than gets in the way, of its success. 
 
Forbes said “as a country we will be judged on the outcomes we deliver, not the strategy we write. Words and intentions matter, but only actions deliver change.”
 
The country and the Scottish government will be judged. We need the outcomes to meet the ambition.

News

Yesterday, Russian missiles struck a television tower next to the burial site of thousands of Jews murdered by the Nazis. (£)
 
While the Russian invasion of Ukraine overshadowed the political disputes at home that have weighed down his presidency, President Biden sought to use his first formal State of the Union address to persuade glum Americans that the country is making impressive progress containing the coronavirus pandemic and rebuilding the economy. (£)
 
Shop prices rose at their fastest rate in over a decade last month, new figures show. Retail price annual inflation accelerated to 1.8% in February, up from 1.5% in January – the highest rate of inflation since November 2011, according to the BRC-NielsenIQ Shop Price Index.

Business and economy

Apple has become the latest major firm to halt all product sales in Russia, in a widening corporate backlash to the country’s invasion of Ukraine. It comes as Finnish network equipment maker Nokia said it would stop deliveries to Russia to comply with sanctions. Nike paused sales in Russia and shipping giants Maersk and MSC suspended container shipping to and from the country.
 
Centrica, the owner of British Gas, is in urgent talks to exit its supply deals with Gazprom amid scrutiny of the Kremlin-backed group’s British operations. Centrica’s contract to buy gas from Gazprom Marketing and Trading, the London based energy trading arm of Gazprom, is due to run until 2025 but it has now begun talks about exiting the agreement. (£)
 
Crypto exchanges are coming under pressure to block transactions with Russia, as western politicians fear that cryptocurrencies provide a back door to move money around the world while they seek to shut Russia out of the global financial system. (£)

Columns of note

In The New York Times, cold war historian Mary Elise Sarotte writes of her fear that Russia’s invasion of Ukraine, regardless of its outcome, portends a new era of immense hostility with Moscow — and that this new cold war will be far worse than the first. She suggests that if Putin continues in his dangerously hostile and reckless position towards the west, he could, through showboating or command, drag NATO member-states into combat and says western nations must continue to avoid inadvertent escalation. (£)
 
The Guardian’s US live news editor, Chris Michael, comments on the surprising stance Russian NHL star Alex Ovechkin has taken on Russia’s invasion of Ukraine. Arguably one of the country’s most famous athletes, and long-time Putin super fan, he told a press conference a few days ago “Please, no more war”: a massive deal from Putin’s favourite athlete of his favourite sport.

Markets

What happened yesterday? 

London stocks fell on Tuesday after Moscow said that it would continue its invasion until it had met its objectives.
 
The FTSE 100 ended 1.72% lower at 7330.20, while the FTSE 250 was down 2.75% at 20,500.64. Sterling was down against the Dollar by 0.73% at $1.33 but up against the euro by 0.12% at €1.20.
 
Over in the US, the Dow Jones Industrial Average was down 1.76% at 33,294.95, while the S&P 500 was 1.55% weaker at 4,306.26 and the Nasdaq Composite saw out the session 1.59% firmer at 13,532.46.
 
In company news:

Abrdn was 5.3% weaker even after the asset manager said annual profit rose, and it posted higher full-year revenue for the first time since it was formed from a merger in 2017.
 
Daily Mirror publisher Reach slid 25.71% after it said higher newsprint inflation would result in a drop in 2022 operating profit.
 
BAE Systems was ahead 3.7% for clear geopolitical reasons, while miners rose as metals prices advanced.
 
Rio Tinto was up 2.21%, Anglo American added 3.47%, and Antofagasta was 3.32% firmer by the close.
 
AstraZeneca pushed up 1.82% after it and Swiss biotechnology firm Neurimmune agreed to develop an antibody-based therapy for a rare, underdiagnosed condition that leads to heart failure in a $760m deal.

What’s happening today?

AGMs
Ecofin Global
Paragon Group
Mila Resources
River & Mercantile Red
 
Annual Reports
Apax Global Alpha
 
Final results
Aviva
Nichols
Vistry Group
Persimmon
Devro
Polymetal International
Trustpilot
Apax Global Alpha
Hiscox
Krmm22 Plc
Musicmagpie

Interim Results
Hotel Chocolat
 
Intl economic announcements
(15:00) ISM Manufacturing (US)
(08:55) Unemployment Rate (GER)
(07:00) Retail Sales (GER)
(12:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)
(15:00) ISM Prices Paid (US)

Source: FTSE 100, Financial Times

did you know

The shape of a Pringles crisp is known as a hyperbolic paraboloid. (Source: Interesting Engineering)

Parliamentary highlights

House of Commons 

Oral questions
COP26 (including Topical Questions)
 
Prime Minister’s Question Time
 
Ten Minute Rule Motion
Firearms and Hate Crime
 
Opposition Day Debate
Subject to be announced
 
Adjournment
Effectiveness of the Vaccine Damage Payments Act 1979
 
Westminster Hall
Effect of remediation works on residents in high rise buildings
Addition of a Centre for Food to the What Works Network
Regional inequalities and child poverty
Prison-based addiction treatment pathways
Funding of the Westminster Foundation for Democracy

House of Lords 

Oral questions
Supporting music education in state schools
Regulation and supervision the use of cryptocurrencies
Level of demand for investments that are advertised as meeting Environmental, Social and Governance (ESG) criteria
Remarks by Minette Batters, president of the National Farmers’ Union on 23 February, about the challenges facing farming
 
Legislation
Coroners (Determination of Suicide) Bill – committee stage
Cigarette Stick Health Warnings Bill – committee stage
Onshore Wind Bill (Private Members’ Bill) – committee stage
Nationality and Borders Bill – report stage (day 2)
 
Grand Committee
Building Safety Bill – committee stage (day 4)

Scottish parliament 

Portfolio Questions
Covid-19 Recovery and Parliamentary Business
 
Constitution, Europe, External Affairs and Culture Committee Debate
UK Internal Market Inquiry
 
Scottish Government Debate
Local Government Finance (Scotland) Order 2022
UK Shared Prosperity Fund – What This Means for Scotland
 
Business Motions
 
Parliamentary Bureau Motions
 
Approval of SSIs (if required)
 
Members’ Business
S6M-02932 Alasdair Allan: Epilepsy and Employment in Scotland

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