The judgements of Scottish business are what matter

From his days in the shipyards of the Clyde, Gus Macdonald has shown his value

WHEN I WAS heading this week to yet another media interview to explain why the appointment of Gus Macdonald as Scottish industry minister would be of real value to Scotland - to Scottish firms, to Scottish jobs, and to Scottish people - I ran into the head of one of Scotland's biggest companies. "At last we've got somebody who understands business in government," he said, "who understands what life is like at the coalface." Not that in the past we have not understood business in the Scottish Office. But I am happy to rest on his judgement: that we understand it better now.

Those judgements, and the judgements of the Scottish people, are the judgements that matter. Not the protests of our political opponents - in the case of the Conservatives, out of touch and out of office in Scotland; or in the case of the separatists, trying with their usual base opportunism to wrest Scotland in a direction which the Scottish people do not want.

But the judgement of people who matter in Scotland, who care about the fabric of Scotland, who want Scottish industry and Scottish companies and Scottish employees to succeed. Organisations such as the CBI in Scotland, the Scottish TUC, or Scottish Enterprise. They are unequivocal: they know that the appointment of someone to government in Scotland who understands business, and who understands how business can work best with government to the advantage of both, is what Scotland needs. Now, in Gus Macdonald, they have it. And I believe that once the immediate wrong-headed fuss is over, everyone will come to see how valuable that will be.

Let us not kid ourselves. We should all be aware of how competitive business is now and has to be in a globalised economy. I am proud of the inward investment Scotland has been able to attract from overseas - companies such as IBM at Greenock, NEC at Livingston and Motorola at East Kilbride, which have become an integral part of the texture of business in Scotland. Or companies such as Cadence, a blue-skies research-forcing ground for bright ideas, which will blossom into new businesses - and which Gus Macdonald is closely interested in.

But we have to work, work hard, at ensuring our policies are right, so that these kind of companies still want to keep coming to Scotland. Just over the border, the tragedy of Siemens' decision to leave the North-east of England is a stark warning to us all. If Gus Macdonald's appointment helps us understand business better, helps us to ensure we do not have another Siemens happen in Scotland, then that alone would be justification enough for having his help inside the Scottish Office.

Not that he needs justification. From his days in the shipyards of the Clyde, to the days when he was appearing on our television screens regularly, to the days when, in running one of Scotland's major companies, he transformed it from a business with a market capitalisation of pounds 50m to one of pounds 500m, Macdonald has shown his value - to employers, customers and shareholders. Business in Scotland knows that: not for nothing did Scottish Business Insider name him last year as chairman of the year and corporate leader of the year - the first time that the two awards have been won by the same person.

I know that: that is why I wanted his knowledge, his talent, and his perspective on my ministerial team. I am convinced his performance as a minister, working for Scotland, working for Scottish industry and Scottish employment, will lead to everyone knowing that too.

Scotland has a great future. It deserves the best government it can get. It will get the best government we can give it. I spoke some time ago to Gus, as a leading Scottish business figure, about how we could improve the support we as a government give to business. In the course of those discussions, the idea came up of Gus helping more directly. Then, as Tony Blair was considering his reshuffle, and I was rearranging the portfolios of my ministers, I wanted to separate the responsibilities for education and industry which had previously been carried out by one minister.

With our Government putting pounds 1.3bn into education in Scotland alone, and with the vital importance of education to all our futures, I decided that education needed a minister for itself. So too did supporting and promoting industry in Scotland.

Gus's name immediately suggested itself. Not because he is a friend - he is, but then in Scotland, where the political, the industrial and just about every other circle are close-knit, it is not surprising that people know and get on with one another - but because he was the best person for the job.

Now that does not mean, as has been suggested, that my view is that we have no one on our backbenches who could not carry out that job. I take that as a slur - against me, and against our MPs in Scotland, who stand in their corner, and more, with MPs from anywhere. But there is no doubt that in the modern business world we need the view - the direct view - of modern business.

New Labour is now the party of business, and by and large, business backs the New Labour government. That is good: it is important for the strength of our economy and of our country that business and the Government work closely together to promote prosperity. But it is a relationship we need to look at and nurture if Scotland is to benefit fully.

In government, Tony Blair has been imaginative, drawing in people from the wide range of support New Labour enjoys. Business has contributed many of these - Cranfield University estimates that there are more than 350 key business leaders working on government task-forces on a wide range of vital economic and business issues. But not just taskforces: business leaders are now in government as special advisors, civil servants and ministers. Their expertise and experience has been valuable, and will continue to be so.

I am certain that will be the case with Gus Macdonald. As a man who likes clear language, let me be plain about this. We are lucky to have in government a businessman of Gus Macdonald's success and ability. To have that success and that ability applied in government, working on behalf of Scotland for Scotland, is precisely what we were elected - in Scotland and across the whole country - to do. I am determined to live up to that trust.

The writer is the Secretary of State for Scotland.