Job Losses (Dumfries and Galloway)

– in the Scottish Parliament at 4:43 pm on 16th June 1999.

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Motion debated,

That the Parliament notes with regret the loss of 99 jobs in Dumfries with the closure of the Nestlé factory, in addition to over 2000 jobs in Dumfries and Galloway in the past two years and the potential loss of 1700 jobs in the agricultural sector in the next two years.

Photo of David Mundell David Mundell Conservative 4:58 pm, 16th June 1999

I would like to say how much I welcome this opportunity to raise with the Scottish Executive-and with the other members who I am pleased to see are staying with us-the concerns of the people of the south-west of Scotland. They are witnessing the battering of their local economy by unprecedented levels of job losses in manufacturing and farming.

I also welcome Mr McLeish's letter to me today in which he commits himself to coming to Dumfries at an early opportunity to meet with Dr Murray, Mr Fergusson, Mr Morgan and myself. The letter tacitly recognises that the economic problems of areas such as Dumfries and Galloway have perhaps not always had the attention that they deserve.

I believe that the seriousness of the situation in which we find ourselves merits direct Government action. I will argue for Executive involvement in a task force to develop and implement a jobs strategy; for the Executive to back the area's application for European structural funding under the new objective 2- [Interruption.]

Photo of George Reid George Reid Scottish National Party

Order. Will members engaging in private conversations please do so outside the chamber and not in the course of the member's remarks.

Photo of David Mundell David Mundell Conservative

Thank you, Mr Reid. I will ask the minister to acknowledge that we in Dumfries and Galloway face many of the same problems of remote and rural areas as do the Highlands. Although we do not have our own minister, we merit the same level of attention and funding. There is also a growing feeling of marginalisation in the south-west, so I want this Government, which talks so much about social inclusion, to demonstrate some geographic inclusion so that the people of Dumfries and Galloway can be confident that they are on the agenda of the Executive and this Parliament.

In addition to peripherality-which I am assured is a word-and dispersed communities, the two major problems that the region faces are spiralling job losses in the manufacturing sector and the restructuring and adjustment of the agricultural sector. Dumfries and Galloway has, at 12.8 per cent, the highest mainland level of employment in agriculture. That compares to the Scottish average of 2 per cent. Agricultural output constitutes 23 per cent of the area's gross domestic product. That is why farming's worst crisis since the war has had a particularly devastating effect not only on the farmers, but on their suppliers and the local shops and businesses in the area.

I commend the Scottish Agricultural College report on agriculture and its future in rural Dumfries and Galloway to both Mr McLeish and Mr Finnie. It is an excellent document but it makes troubling reading as it predicts up to 1,700 job losses in that industry unless positive action is taken to restructure.

On the manufacturing side, the closure of the Nestlé plant in Dumfries with the loss of 99 jobs is the latest in a seemingly endless line of bad-news stories that have made the local papers. We have become used to headlines like "New Year Jobs Blow", which greeted the closure of the UCB polypropylene film plant, and "Double Jobs Blow Hits 180" on the shock closure of a showpiece plant. I will not go on, although I must say that I was intrigued by the headline "Crisis Alert-Dewar to Visit Region".

The job losses that we have experienced tend not to make the national news because the numbers are not headline matters. However, the drip, drip loss of 100 jobs in Dumfries, the loss of 20 this week at Cochran Boilers in Annan and 160 jobs lost at Stelrad in Dalbeattie are equivalent to the loss of many hundreds or even thousands of jobs from our large cities.

The psychological effect is the same. An air of gloom has descended on many communities with the inevitable consequence that people move away. The statistics show that depopulation has begun and it is predicted that it will continue. Who is going? Young people and skilled people are going, leaving behind an aging and economically inactive population. Dumfries and Galloway cannot survive on only the income of retired people. Work is needed to sustain and develop vibrant rural communities.

There are bright spots, though. I commend the Langholm initiative to Mr McLeish and I suggest that he visit there. It is a shining example of how a community and local organisations can work together to stimulate economic development and enhance their environment. I welcome the closer working relationship between Dumfries and Galloway Council and the local enterprise company. Their joint economic strategy document is a starting point, but I believe its development and implementation will only be fulfilled, in this time of unprecedented crisis, with the clout and expertise of the Scottish Executive as a full partner also at the table. I call on the Executive to make that level of commitment a reality, whether or not we give it the title of task force.

I want to conclude my remarks with a further plea to the Scottish Executive that it will give a commitment today to support the Dumfries and Galloway European partnership case for rural strand objective 2 support for the years 2000 to 2006. As its lobby document sets out, such funding is needed if the region is to succeed in building on the foundations that were established under the objective 5 programme with the aim of developing a modern, diverse rural economy with an emphasis on employment creation and on knowledge-based and high-value-added activities.

It is always hard to draw attention to a difficult situation without appearing overly negative. Members should be in no doubt that the south-west has a wonderful natural environment, some of the best health and educational facilities in Scotland and, of course, its premier resource, its people. Let us by our actions make this Scottish Parliament the catalyst that will allow the south-west to reach its full economic potential.

Photo of George Reid George Reid Scottish National Party

Five members have indicated that they want to speak. We will get them all in if they keep their remarks to two and a half minutes.

Photo of Michael Russell Michael Russell Scottish National Party 5:06 pm, 16th June 1999

I congratulate Mr Mundell on securing this debate. One of the most important parts of debating in this chamber will be the debates under rule 5.6(c), in which members can express concerns from their area and receive assurance, which I am sure that there will be, and possibly even promises of action from the relevant minister. We look forward to that.

I also want to commend Dr Elaine Murray, who has already taken a useful initiative by inviting members for South of Scotland to meet from time to time to discuss issues. I have been slightly tardy in replying to her, but have done so now and hope that she will take the lead in convening the first of those meetings. The members from the Scottish National party will be happy to attend them and to find a consensual way of addressing the problems in the south of Scotland as far as we can.

Mr Mundell is right to say that when one talks about rural deprivation, as with land reform and other matters, the emphasis is always on the Highlands. All of us who know the south of Scotland know that there are many problems there that are similar to or more grave than the problems in the Highlands and Islands-an area that I know well-but which receive little direct attention.

However, we must not take a simplistic view of any region of Scotland. Alex Johnstone talked earlier about there being a stark difference between rural and urban Scotland. That stark difference does not really exist. There are certainly different problems in rural, urban and small-town Scotland, but they are all problems to do with people. Often they are to do with how people earn their living and how they can continue to live and work in the area that they choose or in which they were born. We must find a way to address that issue. It will be a major job for this Parliament in the next four years.

There must be concern, but also action. Mr Mundell has put together concern with a requirement and a request for action. This Parliament will be better served, because it will focus more closely on the regions of Scotland. Certainly, the fight in the south of Scotland will be helped immensely by the fact that the Government's professional mummers, Mr Brian Wilson and Lord Macdonald, who were always on hand to mourn at the funeral of jobs in the south of Scotland, are no longer with us. Mr McLeish, who will be, I am sure, of a much jollier countenance-

Photo of Henry McLeish Henry McLeish Labour

I will attend a few weddings.

Photo of Michael Russell Michael Russell Scottish National Party

Yes, and bar mitzvahs no doubt. Mr McLeish will focus strongly on the need for jobs of the whole of Scotland and on the particular needs of the south of Scotland, in many areas of which there is, unfortunately, a cycle of decline. Job losses lead to job losses and to a feeling that such things cannot be reversed, which leads to an outflow of population.

I hope that all the members for South of Scotland will concentrate on the issue of not only saving jobs but creating them and on finding new ways in which to attract new jobs and to find indigenous industries to bring in jobs. That is this Parliament's job. I welcome Mr Mundell's initiative and look forward to the minister's response.

Photo of Elaine Murray Elaine Murray Labour 5:09 pm, 16th June 1999

Unemployment is, of course, a personal tragedy for individuals and their families. Although political point scoring may create jobs for politicians, it does little to improve the employment prospects of their constituents. In that spirit, I am happy to concur with many of the remarks made by Mr Mundell and Mr Russell.

I thank the minister for his commitment, in response to my earlier correspondence, to visit Dumfries and to examine not only its problems but, I hope, its great potential.

The whole population of Dumfries must have been shocked to learn that the Nestlé-formerly Carnation-factory, which has long been associated with the town, intends to cease operating in October next year. My discussions with Nestlé's representatives immediately after the announcement brought to light two particular problems that they felt had led to the decision.

The first was the difficulties that continue to exist as a result of the BSE crisis, particularly the loss of exports to the near east and Saudi Arabia, which has seriously reduced Nestlé's market for dried milk products. The second, which has also featured in my discussions with other local manufacturers-Dupont and Cochran's, for example, both of which have recently announced intentions to downsize as it is known-was the effect of the recession in Russia and the far east. As a consequence of the collapse of the markets there, companies trading in those areas have moved in to compete in a significantly smaller marketplace.

I am not quite sure what the Scottish Parliament can do to rectify either of those problems. The joint economic strategy launched by Dumfries and Galloway Enterprise and Dumfries and Galloway Council expressed the view that "the Parliament should offer opportunities for all agencies to work more closely together and with central government."

That sounds good, but somehow we must make it a reality.

Having said all that, I do not think that it helps to talk Dumfries and Galloway down. It is not some bleak unemployment black spot. Although jobs have been lost during the past couple of years, they have also been created. Indeed, the unemployment figures have fallen by approximately a quarter since 1996.

New employers will be attracted to the area because of its advantages and potential. That must be emphasised, but it is not to deny that there are problems that need to be tackled. Even if employment is growing in other sectors, the loss of manufacturing industry is worrying as it offers better paid jobs that help to sustain local economies.

Dumfries and Galloway has a reputation-an unfortunate one in my opinion-for having a low-wage economy. Wages are some 10 per cent less than in other areas. I do not believe that my constituents should be paid lower wages because they happen to live in Dumfries and Galloway and we can ill afford to lose employers who pay better wages.

There are a number of transport issues to consider, such as the poor quality of some of our trunk roads, such as the A76, parts of the A75 and the A7. Public transport, too, is often inadequate.

For example, Dumfries is only 79 miles from Edinburgh and Lockerbie is only 68 miles away. I am off there at 5.30-I think Mr Mundell is too-but I cannot travel by train from my constituency and get to Edinburgh before 10.30 in the morning. That is not just an inconvenience to me; it is a disincentive to business and commuters.

I do not want to concentrate exclusively on negative issues. I am extremely proud to represent such a beautiful area where so many positive developments are taking place and I want to advertise the area so that everyone in and outside Scotland knows how much Dumfries and Galloway has to offer.

Tourism is a major industry in the area. The industry is worth something like £75 million and employs about 9 per cent of the local work force.

Photo of Elaine Murray Elaine Murray Labour

There are plans to expand the tourism industry. We also have the food industry, the forestry industry and, despite the current problems, the agriculture industry. Dumfries is renowned for the quality of its products and will continue to have a future at the quality end of the market.

Positive efforts are being made to try to turn round some of the recent bad news. For example, Nestlé is working closely with the council and the enterprise company to do what it can to find another employer to take over the site. There have been a number of other issues, but I do not have time to go through them all at present.

I wish to draw members' attention to the world-class optical cable communications system that is being installed at the Crichton campus at Dumfries. It will offer business and education a good system and it is something I would like to show the Minister for Enterprise and Lifelong Learning because it is especially relevant and has many advantages.

I believe we must use our strengths to overcome our weaknesses. Neither Dumfriesshire nor Scotland should sell itself short. We should be shouting about what we do well, putting ourselves on the map and marketing ourselves.

Photo of George Reid George Reid Scottish National Party

I now call Ian Jenkins, and ask him to keep his speech short.

Photo of Ian Jenkins Ian Jenkins Liberal Democrat 5:15 pm, 16th June 1999

I come from the Scottish Borders and share many of Dr Murray's views. We faced similar problems recently; we are still facing them. I am sure that there will be more bad news before everything comes good.

Dr Murray can take heart: with the Government- supported Borders working party and the document "New Ways" the Borders have turned the corner. That has happened because everyone has worked together. Problems have been focused on. With a wee bit of backing, a wee bit of control, a bit of determination and by not-as Dr Murray said-talking the place down, but being positive, the tide has started to turn. I hold out that hope to Dr Murray.

I am worried about the south of Scotland not getting recognition. People think about the Highlands and Islands and the rest. The lowlands is not just the lowlands; it is the lowlands and the south of Scotland and we must ensure that that is not forgotten.

Communications, such as roads and high-tech electronics, are deeply important. Education is also important and leads me to the south of Scotland university project, which I wish well and think could make a difference. The Scottish College of Textiles in Galashiels has been incorporated into Heriot-Watt University and now has an office in Hawick. That will make a difference because success breeds success and, therefore, people will stay. Investment is also important.

Small things can make a difference. I have had two letters from constituents that will strike a chord with Dr Murray. Something as simple as the authorities' failure to put back a tourist sign on the A74 serving Moffat and Broughton has cut people's throats in Moffat and Tweedsmuir.

Photo of Alex Fergusson Alex Fergusson Conservative 5:17 pm, 16th June 1999

I will preface my remarks by acknowledging the letter from Mr McLeish that conveniently arrived on my desk at about quarter past two. I acknowledge the £1 million for Dumfries and Galloway's enterprise action plan for 1998-99 and the £2.4 million for the 1999-2000 action plan, but question how much of that money will end up as consultancy fees, feasibility studies and jobs for the boys, rather than jobs for the men and women who need them.

David Mundell described the serious situation in Dumfries and Galloway. While I agree that we must not talk the area down, there are underlying problems with the agriculture and forestry industries, which account for a staggering 30 per cent of the region's gross domestic product. That is a stunningly high level of dependency in anybody's language and the Scottish Agricultural College has projected that there will be 1,700 job losses over three years. The crucial importance of those two basic rural industries is clear to all and the SAC report shows how much the agricultural situation has worsened during the year.

Parliament will not want to hear, nor have I time to give, all the facts and figures that are available to illustrate the demise of agri-forestry, so I will confine myself to a mere two facts. They are stark and sobering. First, in 1996, total farm income in Scotland was £546 million. In 1998, it was £187 million. I still have trouble getting used to the second fact, which is that it is cheaper to import fencing posts from Latvia than it is to manufacture them in Scotland.

That is why 1,700 jobs are at risk in south-west Scotland. Not just farmers' or farm workers' jobs are at stake; the jobs of shop assistants, drainers, fencers, sales reps, forestry workers and saw mill workers-the myriad of jobs that agriculture and forestry help to sustain-are at stake. Entire rural communities are under the severest of threats because of the decline in those most rural of industries.

What can this Parliament do? I strongly maintain that, within the European Union, the Scottish farmer will take lessons from no one on production efficiency. However, perhaps we have lessons to learn in marketing. I hope that the Parliament will be able to promote the benefits of co-operation and co-operative marketing as one positive way of improving agriculture's lot.

I have no doubt that one role of this Scottish Parliament will be to promote Scotland and all things Scottish. I believe strongly that as part of that role the Executive, in conjunction with local authorities and enterprise companies, should work to encourage the further manufacturing of a region's primary produce, so that the region may gain substantially from the added value and increased economic input that rural communities so desperately require.

There is already a deeply held scepticism in many rural areas about whether this Parliament will be of much benefit to them, and I am afraid that the legislative programme that was set out this morning will have done little to alleviate it. We must unite across the parties to set our parliamentary sights on regenerating the rural areas of Scotland. That is the only way in which this Parliament will be deemed a success. Indeed, it is on that that the oft-mentioned but seldom-witnessed new politics will be judged in rural Scotland.

I support totally the call for an Executive-led task force and strenuous backing for the region's efforts to obtain objective 2 funding. In short, I fully support the motion.

Photo of Alasdair Morgan Alasdair Morgan Scottish National Party 5:21 pm, 16th June 1999

I will outline, briefly, some of the things the Government can do to turn the situation round.

In agriculture, there are still great delays in lifting the beef export ban. I think that there is a hold-up among the civil servants in Brussels and with the scientific veterinary committee. The Government should put a political bomb up their backside and get them moving.

We need to encourage growth in small businesses. The factors that affect small businesses in rural areas are different from those that affect small businesses elsewhere. We need a special unit-something like the Small Business Administration in the United States-to consider this issue, so that we can achieve the same kind of success here as they have had in the US.

We need greater certainty of funding for our tourist boards. Tourism is the second biggest industry in Dumfries and Galloway and it is ridiculous that the local tourist board nearly went bust last year. We must not let that happen again.

We need to encourage the growth of electronic commerce. The great thing about economic commerce is that although it is growing throughout the world, it is something in which rural areas can compete with the rest of the country on nearly equal terms. We need to assist that process and to consider, for example, whether we can encourage British Telecommunications and other providers to make local calls free, as they are in the United States.

As has already been said, we need to encourage the south of Scotland university project. The Government should encourage it in the same way, and with the same amount of money, as it encouraged the University of the Highlands and Islands. A centre of academic excellence in the region will encourage businesses to gravitate to, or stay within, it.

Photo of George Reid George Reid Scottish National Party

My apologies go to Mr Robson and Mr Gallie, who wished to speak but who have, unfortunately, been beaten by the clock. I call Mr McLeish to wind up the debate.

Photo of Henry McLeish Henry McLeish Labour 5:23 pm, 16th June 1999

I am very pleased to wind up the debate. There have been some excellent speeches. It has been brief, but I am delighted that so many members have been able to speak. Of necessity, I, too, shall have to be brief. That should not be construed as anything other than sticking to the timetable.

I congratulate Mr Mundell on securing the debate and thank the other participants, including my colleague Dr Elaine Murray. I also want to confirm that I intend to visit Dumfries and Galloway very soon. If there are problems to be addressed, my style will be to visit and encourage local relationships-we have many in the area, and I hope that we can take advantage of them. Economic development powers do not come to the Parliament until 1 July, but I want to make preparations for my visit now.

It is clear that rural economies in Scotland face particular problems. I am aware, because I have heard them say so on many occasions, that people from Dumfries and Galloway and, indeed, the Borders feel disadvantaged by the emphasis that has been placed on the Highlands and Islands. We should not take anything away from the Highlands and Islands, but we can put more emphasis on Dumfries and Galloway and the Borders. That is what a Parliament for the whole of Scotland is all about, and this evening I am committing myself to that aspiration.

The involvement of local authorities, the private sector and public sector bodies in local enterprise companies leads me to believe that local ownership of solutions is vital. That does not mean that the Government can walk away from tackling the problems practically. Adjournment debates in Westminster seemed very remote, geographically and psychologically. This is Edinburgh, we are very close, and I want Mr Mundell to take a strong message back to his community: we want to gel all our commitment locally and work for his area.

We also want to take a new initiative. Debates about rural affairs and rural economies cover virtually every subject in the Parliament. Governments have traditionally not been good at what we call cross-cutting. I want to work closely with Ross Finnie and others to ensure that transport, tourism, the environment, economic development and land issues are brought together, not only in the Executive, but in this Parliament. I would like to think it a challenge to this Parliament, with its subject and mandatory committees, to examine the possibilities of cross-cutting very early on.

The Government has responded over the past two years. It is clear that Dumfries and Galloway has faced difficult times. Last October, Donald Dewar announced an additional £1 million for Dumfries and Galloway Enterprise to start the rebuilding process. Funding has already laid foundations for economic growth: more than 300 people have benefited from training programmes and from early completion of the plastics park in Dumfries, which is a fine example of local skills and strengths being adapted to changing global markets. There has been additional support for small business, which is essential for diversification and the local economy.

An additional £1 million of funding has to be followed through with a clear strategy and additional resources. The situation is developing, and there are perceived problems, but I want to concentrate in the short time available to me on the potential for Dumfries and Galloway. All members who spoke stressed the problems, but every area has potential. It is right that this Parliament and all the agencies involved recognise that fact. Agriculture is facing difficult times, but it has a tremendous future and tourism has grown enormously, to the extent that 9 per cent of the employed population is now working in it.

It is evident that, with a minute remaining, I will not have time to do justice to the myriad points that have been made in this debate. Suffice to say that I want to look, listen and learn about what is happening in Dumfries and Galloway. A raft of reports is already available, but we are also at the start of a new era in which we can do things differently. I think that, over the next few weeks, we will be able to visit Dumfries and Galloway. We want to discuss the situation there with our farming colleagues and to examine assisted area status, European funds and objective 2, which is a current issue-it is reserved to Westminster, but Scottish ministers are closely involved and we want to do the best we can for every part of Scotland.

I would like to think that this debate has illustrated why we fought so long to get it. It has been very constructive and I hope that it will act as a signpost for others. I am delighted that it has taken place. It has been extraordinarily brief, but we will be visiting, building and co-operating not only with MSPs, but with everyone who has the best interests of Dumfries and Galloway and the south of Scotland at heart.

Photo of Murray Tosh Murray Tosh Conservative

On a point of order. I understand that there is provision in the standing orders to extend debates in certain circumstances. It is a pity that two members were unable to participate in this debate and that the comments of the Minister for Enterprise and Lifelong Learning had to be abbreviated. Members are not awfully familiar with many of the niceties of the standing orders, and it might be useful if you, Mr Deputy Presiding Officer, could arrange for an explanation of how we might protract a debate when another 10 minutes might make a difference to be given in a future business bulletin.

Photo of George Reid George Reid Scottish National Party

This is a timed debate and the magic hour of half-past 5 is almost with us, but I will arrange for such information to be brought to the attention of members through the Presiding Officer.

Meeting closed at 17:29.