Kate Forbes: When people start to see change, I believe they’ll start to trust again

A sense of great satisfaction emanates from Kate Forbes as she talks about an economic boom currently happening in the Highlands and Islands.

No doubt she’d be pleased, as deputy first minister and cabinet secretary for the economy, to be reporting back on investment anywhere in Scotland – but she’s particularly gleeful about what’s going on in her own backyard. It wasn’t that long ago, she tells me, that Highlanders were told the only way to be successful was to move away. Now those areas are “epicentres for investment”, she says.

Beyond making sure GDP goes in the direction, however, Forbes is focused on what that means to people. “It does need to mean more jobs, it does need to mean higher wages – but it also needs to mean more housing, better infrastructure, more population. And so when you ask ‘what does economic growth mean for people?’, it isn’t an abstract term.

“What it needs to mean is that when there is a hive of economic activity we see some of the social issues being resolved – like child poverty, like a lack of housing, like poorer infrastructure. That’s where government intervention is important, because while many employers want to do the right thing, there needs to be an overarching vision for Scotland that everybody can get behind.”

We are seeing more money flowing... There’s more that we need to do, but I think that is the result of our changing rhetoric

It speaks to the Scottish Government’s ambition to create a wellbeing economy. That term might seem a little woolly and intangible, but ultimately to Forbes it means putting more money in people’s pockets. “My definition of economic growth is really prosperity. It’s making Scotland as prosperous as possible, in every community of Scotland.”

And while the last few years have been a “tough time for the economy”, she is determined to meet the challenge. Part of that is about refreshing her government’s relationship with business, which was widely regarded to have stalled towards the tail-end of the Nicola Sturgeon years. Since she re-entered government last spring, Forbes says hitting that reset button has been her priority.

“We’ve been focused on reducing the hurdles, of being clear that Scotland is open for business, and of actively engaging with investors. That has delivered quite a significant increase in opportunities. We are seeing more money flowing, more money being invested... There’s more that we need to do, but I think that is the result of our changing rhetoric, as well as in us trying to streamline processes.”

It’s all part of the grand plan for this (still fairly new) iteration of the Scottish Government. The same week as John Swinney was elected first minister – and Forbes became his deputy – the pair made a visit to the Barclays Campus in Glasgow. In a speech to a room full of bankers and business leaders, Swinney said his number one priority would be eradicating child poverty – and while a financial services district might have been an unusual backdrop for that, it was to symbolise that there was “no conflict” between that and economic growth. “For me, and for my government, eradicating child poverty and boosting economic growth go hand in hand,” Swinney said.

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I ask Forbes, given the high levels of in-work poverty and the fact the Scottish Government can’t increase the minimum wage, how she can ensure the benefits of growth filter down. The answer, she says, is to diversify the economy to increase the number of high-wage sectors. “Our economy is overly reliant on big industries like financial services and energy. They’re both important, but we do need to diversify to a greater extent to ensure that there are higher wages in more sectors.

“It means that when there are downturns, it doesn’t hit incomes to the extent that it currently does. That’s one thing that England does have, a more diversified economy. It’s more protected when there are downturns in particular industries. We have huge growth potential in other industries.”

There are also positives to be found in recent labour market statistics, Forbes says, such as record low unemployment levels. That often leads to higher wages, especially in areas of the economy typically deemed low-wage sectors, like hospitality.

Every day is a case of wrestling with whether or not I will actually be able to juggle a child and work

But those statistics also show the ongoing problem of economic inactivity. Almost a quarter of working-age adults are neither in work nor seeking it, according to the most recent figures. Is this a concern?

“Yes, I am concerned about the high levels of economic inactivity,” Forbes replies. “Some economic inactivity is good, so students that are in higher and further education, unpaid carers – they deserve huge credit for the work that they do and oftentimes they will probably unfairly be caught in those figures. But the workless households figure is a matter for concern.”

The difficulty with bringing down those figures is it requires “very financially intensive schemes”. However, Forbes is hopeful there is buy-in from stakeholders and across the parliament to start to reverse the trend. “These are the hardest to reach people and I think we either have to get real about tackling economic inactivity or not. I want to tackle it; I want to reduce it. We are investing in reducing it, we’re building the relationships with employers and trade unions to reduce it, and my hope would be that parliament gets on board with the fact that it is a financially intensive approach – and it needs to be, to break the cycle of inactivity.”

A significant proportion of economically inactive people are parents – especially mums – who are unable to work due to caring responsibilities. As a working mum, Forbes knows well the juggle. “I am in a very privileged position in terms of income, in terms of flexibility, but every day is an impossibility, and every day is a case of wrestling with whether or not I will actually be able to juggle a child and work. And so it’s no wonder that, for many mothers, it feels like an impossible juggling act, and that’s before you start to look at the financial implications.”

I wonder, therefore, whether more investment into early learning and childcare (ELC) is needed. Forbes agrees ELC is “one of the most powerful economic levers”, and is proud of what the SNP has delivered so far, but acknowledges continued challenges – including the fact the offer doesn’t kick in until a child is age two. “I don’t know anybody who is able to take two years of maternity leave,” she adds.

But as well as funding, she also believes the government and parliament needs to be leading on this – something it is not doing just now.

“I remain frustrated about the fact that the parliament creche is limited to three hours per day. I think that would be a great starting point, to show members of parliament that we really do want them to be able to work as parents. Not a single parliamentarian works for only three hours per day, so that is just a nonstarter.

“I cobble together a total jigsaw of different pieces, but it means it lacks resilience and if one piece falls, you’re really stranded. A few weeks ago when [my daughter] was ill – and every mother can empathise with this – I couldn’t put her into nursery and had no alternative. I was about to meet with a senior diplomat who I couldn’t cancel on with only 30 minutes’ notice. You end up doing things that are not great for the child, in terms of leaving her with people she doesn’t know.

“There’s lots of complexities and I think the parliament and the government need to lead by example. I remain of the view that three hours per day for the parliamentary creche is not leading by example.”

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Another major economic change Forbes must deliver is the transition to a clean economy. She has responsibility for the green industrial strategy, alongside the energy secretary, a key component of the move to net zero. While the 2045 target remains intact, last year the Scottish Parliament had to re-legislate to remove its interim targets following a critical report from the Climate Change Committee.

Forbes says Scotland is at a “very critical crossroads” now. Already some parts of the country are feeling the impact of the change – both positive, in terms of the growing renewables sector, and negative, such as the looming closure of the Grangemouth oil refinery. “We need to keep things moving with the upfront investment, the upfront job creation, the upfront businesses being established, so that as we phase out our reliance on oil and gas, those jobs already exist,” Forbes says.

“I see my job principally as trying to get the investment upfront now, so that when things like Grangemouth happen it isn’t as disruptive as it feels for those who have lost their jobs because there are other opportunities there.”

But the dangers of not delivering a just transition are starting to emerge. Job losses at Grangemouth have led to a great deal of local anger. It is perhaps issues like this which are encouraging some pushback on the net zero agenda across the UK. Coupled with the wider cost-of-living woes, this is translating into dissatisfaction among voters – and pushing some of the electorate towards parties like Reform UK.

Evidence of delivery and a vision that gives hope. That is what will convince people that the SNP is the means of delivering

I ask what the SNP is doing to rebuild trust to ensure that, come 2026, it does not haemorrhage votes. “For me, the question of trust is about whether people right across Scotland see themselves reflected in our policies and our values,” she says. “Uniquely for political parties, the SNP has always had a very broad reach; it can speak to the fishermen in Buchan and the single mum in Glasgow. That is what we are working hard to regain.”

She’s concerned that the actions of the Labour government are undermining trust – particularly because the party ran on a platform of “change” last year. “When you’ve had the most hope in change, and it hasn’t delivered, you feel most let down. My fear is that that disillusionment and that apathy could be doubled unless the SNP can speak into it, and I believe that the polling suggests we have started to turn things around.”

That has meant putting the question of independence on the backburner while the SNP resets after a damaging couple of years. Forbes says: “If you look at John Swinney’s message since he came in, he just keeps talking about delivery, delivery, delivery. No new strategies, just deliver.

“When people start to see change, I believe they’ll start to trust again. And they’re starting to see changes. I believe if we can over the course of the next year, for example, build and deliver far more affordable homes, if we can start to try and tackle some of the issues, if people see more jobs being created, more investment in infrastructure on their doorstep, they start to believe. And if you match that with a positive vision as well, that inspires people to get behind you.

“Then you get the perfect combination for the next election: evidence of delivery and a vision that gives hope. That is what will convince people that the SNP is the means of delivering a better Scotland and that they can get behind that.”

And in terms of the threat from Reform UK, it’s about responding positively. “It puts the responsibility back onto the SNP to make the positive, hopeful vision for centre-left values. I think that’s where the majority of the people of Scotland are, and our responsibility is not to try and compete with Reform and to be dragged onto their territory, but is indeed to continue to make the case for openness, inclusivity, for being pro-international relationships, to be pro-immigration.”

You can disagree with the leader while still engaging with that nation’s economy

The rise of right-wing parties is happening elsewhere, too. In the US, dissatisfaction with the government led to the re-election of Donald Trump. That will have huge global ramifications. Is Forbes worried about potential economic impacts?

“It’s uncertain. We need to plan for all scenarios. The US is the world’s largest economy, it’s a key driver for the global economy, what the US does will reverberate across Scotland. Now we do not want to see, for example, trade and import tariffs. That would be a matter of concern... In 2023, exports of Scottish goods to the USA were worth £4bn. That’s 12 per cent of the value of all Scottish goods exports, so we can’t counter tariffs by just shifting exports. We therefore need to look at other opportunities to do that, and that is where diplomacy does matter.”

And the Scottish Government has reached out to the president-elect, with Swinney having “positive” phone talks last month. That led to some criticism from the Scottish Greens, with co-leader Lorna Slater asking at FMQs: “How can it be in Scotland’s interests to court the favour of someone like Donald Trump?”

For Forbes, the answer is simple. “We have a duty to stand up for Scottish businesses, Scottish workers, Scottish products, Scottish services, Scottish trade. Around the world, there are quite a number of leaders that I would never vote for, and yet we are reliant on trade and investment because we are not an island, we are intimately connected with global trade, with global relationships.

“My argument would be you can disagree with the leader while still engaging with that nation’s economy, and I’m afraid that you also have to work through that leader.”

More positively, she also sees opportunity created by the Trump presidency: uncertainty about clean energy could encourage investors to come to Scotland. “If an investor wishes to invest in clean energy, they may now look again at the United Kingdom, and again at Scotland, because there is that regulatory and that policy certainty about our move over [to net zero]. We have 40GW of offshore wind in the pipeline, and you’ll know if you do the maths, at peak time our needs as a country are far less than that in terms of electricity, so the opportunity to invest in data centres, all these intensive industries that rely on clean energy, is huge.

“An investor has a responsibility to invest in clean energy, and Scotland looks a lot more certain than elsewhere. If we want to see that greater investment, there could be some opportunities too.”