96.During this inquiry we heard that, despite some extremely successful exporting sectors, there remained more to do to encourage more Scottish business to become exporters. At the moment just 70 companies account for 50% of Scotland’s international exports. As the UK prepares to exit the EU, CBI Scotland told us it was more important than ever to promote the value of exporting to businesses and look at new ways to support and promote Scottish exports.
97.Improving both Governments’ trade promotion effort was identified as one way to address this gap, with both the UK and Scottish Government having their own marketing campaigns supporting Scottish exports. This was coordinated by the Department for International Trade for the UK Government and Scottish Development International for the Scottish Government. During this inquiry we explored how well the two governments work together and where there might be potential for more collaboration.
98.While the UK and Scottish Government run their own export promotion activity, they have agreed a Memorandum of Understanding that commits both Governments to consulting each other on policy developments and activities to “avoid duplication of effort, including double funding activities, and to avoid contradictory actions.” CBI Scotland told us this model worked well for Scottish businesses as they benefited from having two different trade promotion structures in place to champion them abroad. This was echoed by the Scottish Chamber of Commerce (SCC) and Scottish Council for Development and Industry who both agreed that the UK and Scottish Government were providing effective support for businesses through their individual campaigns.
99.While most witnesses were supportive of the promotional work of both governments, we heard concern that overlapping initiatives were creating duplication between the two governments which could create confusion for business. One example of this was in food, where NFU Scotland told us they were unsure how the UK Government’s new Food is GREAT campaign, which advertises products under British branding, sat alongside Scotland Food and Drink, an existing campaign between the private sector and the Scottish Government to promote Scotland as a Land of Food and Drink. The question of duplication was also raised by the Scotch Whisky Association and Scottish Salmon Producers Organisation who said they were unclear how the two governments’ campaigns aligned strategically.
100.Chief Executive of Scotland Food and Drink, James Withers, went further blaming this duplication on the GREAT campaign which he said were using the British brand to “run roughshod” over existing promotional efforts in Scotland that had been going for some time. He argued this was particularly relevant for food promotion, where Scotland had built its own reputation for quality at a time when food and drink was “not a priority” at UK level. This view was shared by Ruth Watson, Founder of Keep Scotland The Brand, who told us that the GREAT campaign was damaging the value and reputation of the Scottish brand.
101.However, we heard from other groups that in some cases UK branding added value to Scottish products. SCC said that Chinese consumers were more receptive to the global branding provided by the UK Government which carried the “British kitemark of quality”. Wendy Alexander of Universities Scotland meanwhile argued that different branding suited different products, telling us that what Scottish exporters needed was flexibility in the trade promotion available to them:
It is the case that there are occasions where you will use a global brand; there are occasions when you will use the city brand; and there are occasions when you will use your institutional reputation, such is the complexity of operation on a global stage.
This view was shared by Allie Renison, of the Institute for Directors, who argued that trade promotion stop being framed as a competitive narrative. Instead she urged both governments to use Brexit as an opportunity to look at how collaboration in trade promotion could be improved. Both the UK and Scottish Government agreed that choice of branding should be a decision for businesses, with different brandings suitable for different markets.
102.Scottish business benefit from having two Governments able and willing to promote their products in overseas markets. While many businesses felt they benefited from this arrangement there is room for the two Governments to improve how they work together. We recommend that the UK and Scottish Governments redouble their efforts to coordinate their trade promotion activities, so they can complement rather than duplicate each other. This could be achieved by arranging regular meetings at ministerial and official level to discuss ongoing and future campaigns and to identify where joint-working may be possible. We ask that the Government provide us with an update on what steps it has taken to improve this coordination in response to this Report.
103.How Scottish products are branded was an issue that a number of our witnesses felt strongly about, and we heard passionate arguments about the benefit of both Scottish and British branding in promoting products abroad. It is clear to us that there is a benefit in Scottish businesses having access to both British and Scottish branding. The choice of branding must be a commercial decision for companies to make based on what they feel will most benefit their products.
104.Another way in which Scottish exports are promoted is through trade missions, which help build business links in new markets. Between 2017–18 the Rt Hon David Mundell MP, Secretary of State for Scotland led ten trade missions for the UK Government which included visits to Chile, Hong Kong and Japan. Similarly, the Scottish Government coordinates its own missions through Scottish Development International, with Trade, Investment and Innovation Minister Ivan McKee MSP recently visiting Germany and Poland. We explored with the Secretary of State whether joint trade missions could be a practical way to improve collaboration between the two governments. While the Secretary of State assured us he worked closely with the Scottish Government ahead of UK missions, he was open to the Scottish Government directly participating in future missions saying:
I would certainly very much welcome an approach where we could move to more joint delegations. That would be a much better way to get the best value for taxpayers in Scotland.
105.We welcome the comments from the Secretary of State that he would be supportive of organising joint trade missions with the Scottish Government. The Government should publish a list of Joint-Trade Missions it expects to undertake with the Scottish Government for the rest of the year and report back to us on how successful they have been.
195 Scottish Government, , 2016
197 , 2013
198 , 2013
210 Office of the Secretary of State for Scotland, , 2018
211 Office of the Secretary of State for Scotland, , 2018 & , 2018 &
212 Scottish Government, 2018 and Energy Voice, , 2019
Published: 10 March 2019