It is good to be back in Inverness, the fastest growing city in western Europe, and to meet so many representatives from successful local businesses.
Tonight I want to talk about three things. Firstly, I want to look at the opportunities for Scotland in the global economy as I see them.
I also want to talk a bit about the steps the Government took to tackle the global recession and stop Britain going into depression.
And finally, I want to look at the benefits we derive as part of the UK. There are many benefits but specifically I want to talk about the economic benefits of being part of something big. For even though turbulent times lie ahead, as this week's unemployment and inflation figures show, I remain convinced that bigger is best for Scotland.
I believe that twin trends will power global structural change.
First, the balance of global economic power is shifting east - towards the emerging, mass economies of Asia. Meaning that we will face a fiercer competitive challenge than ever before.
And second, we have the advent of the climate change economy. Where the emphasis is on cleaner energy, greater resource efficiency and decarbonising industry.
It's a new world which plays to our strengths. We are open to investment, support enterprise, have a flexible labour market and have invested heavily in our people and infrastructure.
Our target is to secure long-term sustainable, resilient growth. Our capacity for this remains intact. The fundamentals are solid and the pound¿s competitive value is increasing the sourcing of manufactured goods in the UK and helping exports.
Growth will need to be environmentally sustainable. We must secure our share of the £4 trillion world market for environmental goods and services and create 40,000 new green jobs across Scotland by 2015. I hope too that sustainable growth will lead to our businesses becoming more energy efficient and climate-resilient.
Growth must be balanced and resistant to economic shocks. We need the diversity of numerous companies achieving success across sectors and geographical markets. It's an era of nimble niche industries producing components for global supply chains. Meanwhile, our exports balance will gradually shift towards the growing middle class markets in the emerging mass economies.
This Government backs enterprise. Britain is one of the best locations for starting and growing a business.
We are committed to transforming skills and creativity into economic growth. Harnessing our universities and research expertise to drive commercial application and build closer business links. Today's innovator is tomorrow's industrialist. And through various incentives, including tax allowances, we are encouraging businesses to invest in research and development.
We're determined to unlock the competitive potential in growth sectors.
Complementing the market through measures like the £750 million Strategic Investment Fund. Co-investing in diverse and otherwise viable developments where the market has come short.
Across Scotland I have seen encouraging signs in growth sectors crucial for our future prosperity.
Scotland remains a diverse international financial centre. Insurance and asset management are enduring strengths. Indeed, Standard Life has announced a 30% increase in business in China. And major players like Tesco Finance, Esure, Virgin Money, Capita and BNP Paribas are investing here.
We're also entering Scotland's third energy revolution. Our geology gave us the first two - coal, and in my lifetime, North Sea oil and gas. Now our geography has given us the vast potential of wind, wave and tidal power. Opening up the prospect of thousands more low carbon jobs in green construction, research, development and servicing.
Our much lamented Scottish weather is a priceless asset.
We're Europe's windiest country and one-quarter of Europe's tidal power is found around our shores. We're supporting wave and tidal energy. Investing £8 million to expand the groundbreaking EMEC wave test site on Orkney. Launching the £22 million Marine Renewables Proving Fund to help bridge the funding gap for innovative firms. And we're backing oil and gas development west of Shetland - which might contain one-fifth of our remaining reserves.
In the UK marine science sector, this region leads the way. While in Life Sciences, Lifescan Scotland is the lifeblood of the Highlands.
Finally, whisky remains a different type of lifeblood - earning £3 billion or an amazing £97 per second for our trade balance in 2008.
The Speyside distilleries alone account for over 60% of Scotland's single malt production. And our new Whisky Regulations helps drinkers worldwide get the real deal, and avoid being conned by counterfeiters, passing off their inferior product as Scotland's finest.
Scotland has talent in abundance and I am cannily optimistic about our future. By working together we can fully realise Scotland's immense potential.
However, in 2009 we saw the first economic crisis of globalisation. The world economy shrank for the first time in six decades.
Our activist approach helped ensure that recession did not lengthen into depression. Unprecedented fiscal and monetary stimulus gave the hard-pressed economy a welcome boost.
Failure to act would have meant far greater risks to the economy and public finances in the future. Supporting the economy through to recovery goes alongside rebuilding fiscal strength when recovery is established. And we plan to halve the deficit over the next four years while protecting vital frontline services.
This week has also seen inflation rise because of temporary upward pressures. Once these have passed inflation is expected to fall again. But this reflects that the recovery remains fragile and difficult times still lie ahead for the global economy.
Which is why we are helping the jobless and businesses in Britain.
The newly unemployed must not become the long term unemployed.
Highland Region has benefitted from the Future Jobs Fund - 268 positions have been approved since July. It will continue to benefit. Three of the six successful Round Seven bids announced this week will contribute jobs to the region - through the Scottish Wildlife Trust, Project Scotland and the SCVO. We are determined to unlock the workplace potential of unemployed young people.
And I know that small and medium businesses are our economy's beating heart.
We geared Real Help for businesses to mitigate the recession's impact. For instance, the Business Payment Support Service has helped some 780 Highlands businesses reschedule £11 million of tax. The repayment rate is over 90% and the Chancellor has extended the scheme for as long as it is necessary.
We didn't stand about and watch. We acted. Future Jobs Fund and tax deferral I've mentioned. But I could have spoken about the car scrappage scheme, the VAT reduction, the rescue of the banking system, the historically low interest rates, the reduction of stamp duty. And you will be delighted to know that I don't plan to detain you with the merits of quantitative easing.
Despite this, some would rather go it alone. They remain fixated about Scotland's constitutional condition.
But after the year we've had, surely bigger is best for Scotland. Indeed, I'd go further - bigger is vital for Scotland. And economic analysis supports this argument.
Those promoting dramatic constitutional change fail to identify the economic implications of separation.
It is striking that the Scottish Government's National Conversation documents entitled 'fiscal autonomy' and 'supporting business and enterprise' ignore the huge volume of international literature which could identify what devolution, fiscal autonomy or even separation might mean for Scotland's economic future.
The very fact these issues are not addressed might tell us something.
I cannot accept those who argue, without any supporting analysis or evidence, that Scotland would somehow be more prosperous if it left the UK.
It's time to draw on established economic analysis to highlight the economic benefits of being part of a larger economy.
I believe that the benefits are four-fold.
First, central government is better able to respond to local shocks because its revenues are drawn from a much wider spectrum of economic activity. Larger economies spread risks and resources across a large and more diversified economy and geographical area. They can call on a larger tax base and have the safety net of scale. According to the Scottish Parliament's own figures, the bail out of Scotland's banks by the UK taxpayer equated to more than three times Scotland's GDP.
Secondly, in the UK we also have far greater influence in international agreements that govern trade. The UK is part of the G7, G8 and G20, and has 29 votes in the EU Council of Ministers. Ireland has 7. We are therefore better able to argue our preferred case - we set the international agenda rather than have it imposed upon us.
Thirdly, larger economies have a greater internal demand for goods and services. This helps insure them against global economic forces, particularly when there are no barriers to accessing that internal market.
And fourthly, larger countries benefit from economies of scale in certain public services provision and national institutions. In the UK, Scotland does not face the full cost of a tax collection authority, overseas representation or maintaining its own unique currency.
In contrast, small countries are less able to withstand localised shocks and lose potential economies of scale. So Scotland would need its own HMRC, overseas representation, defence, market regulation and potentially its own domestic currency.
Also, a small economy has a smaller internal market, so it is more exposed to international economic events. Ireland and Iceland's experiences shows how such countries were buffeted by global economic winds.
And lastly, separation impedes trade. This is borne out in Canada. Canadian provinces on the US border have greater trade with other provinces thousands of miles away than they do with their American neighbour. Let's be clear. The rest of the UK is Scotland's largest export market. And the Scotland Office's tax paper demonstrated that fiscal autonomy would place a £1 billion burden on Scottish businesses.
Those favouring separation on economic grounds believe that the perceived benefits of a smaller government outweigh the economic resilience of:
I don't believe that is plausible. Perhaps this is why National Conversation documents are couched in the language of 'could be'. The economic arguments do not stack up to anything better.
But we are still encouraged to believe that a separate Scotland would govern itself so much more effectively as to render the benefits of scale and economic security secondary.
I'm convinced that devolution is the right fit. Scotland gets the best of both worlds. A devolved Scotland within the UK is the right economic and patriotic choice. Scotland already allocates its resources to meet our wishes and needs.
And when we make the Scottish Parliament dependent on a share of Scottish taxes, the jigsaw will be complete. The real financial accountability this will deliver will ensure the Scottish Parliament allocates resources as efficiently as it can - it can either raise taxes or deliver less. The blaming London option, deployed frequently at present, will be gone.
With devolution, we benefit from being an integral part of a leading global economy. We have the resilience associated with being diversified across many economic sectors, our unified tax system allows us totally unimpeded access to the world's oldest free trade area whilst we can spread the costs of nationhood across 60 million people rather than 5 million.
To me, it's stating the obvious - the economic arguments for separatism simply do not stack up.
I remain convinced that unity and economic scale will be key factors as a rebalanced Scottish economy rises from recession.