Ottakar's (Takeover)

– in the Scottish Parliament at 5:01 pm on 9th November 2005.

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Photo of Murray Tosh Murray Tosh Conservative 5:01 pm, 9th November 2005

The final item of business today is a members' business debate on motion S2M-3325, in the name of Kenny MacAskill, on the HMV/Waterstone's takeover of Ottakar's book stores. The debate will be concluded without any question being put.

Motion debated,

That the Parliament voices its grave concern over, and opposition to, the proposed takeover of Ottakar's book stores by HMV/Waterstones; notes that, if the takeover goes ahead, there will be effectively a monopoly on bookselling in many towns and cities in Scotland; regrets that, despite Edinburgh being the World City of Literature, in recent times it has witnessed the demise of independent Scottish-owned book stores such as Bauermeister and James Thin, meaning that there is now no Scottish-owned book chain in Edinburgh or indeed Scotland; recognises that the internal structure of Ottakar's genuinely reflects the distinctive Scottish book market, with a Scottish range and marketing manager and two Scottish operating managers; contrasts this with the highly centralised structure and purchasing policy of HMV/Waterstones, which has led to a decrease in in-store diversity and availability of Scottish books through Waterstones; thus recognises that this takeover is potentially very damaging for the Scottish publishing industry, the Scottish printing industry and Scottish writers and will have the effect of limiting choice for the Scottish book-buying public and harming our national culture and identity, and considers that the Competition Commission should investigate this takeover on the grounds of market dominance in Scotland.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party 5:05 pm, 9th November 2005

At the outset, I draw the chamber's attention to my declaration in the register of members' interests. Luath Press is publishing a book that I am writing in conjunction with Henry McLeish.

Etched on the wall of the Parliament of the Scottish people are words and prose from Scots throughout the centuries. Why? They are there because they testify to who we are and to what we stand for. It was therefore appropriate that this chamber, restored after 300 years, should embody those words as a salutary reminder, not just of who we are, but of what those who have been elected are to represent.

Why? Literature is a nation's soul. Giving the Nobel lecture in 1970, Alexander Solzhenitsyn stated that literature

"becomes the living memory of the nation. Thus it preserves and kindles within itself the flame of her spent history, in a form which is safe from deformation and slander. In this way literature, together with language, protects the soul of the nation."

A translation might be a masterpiece, but there are often ideas that can never be properly translated or explained except in the language in which they were written. That is why, in learning a language, the study of literature and prose in the native tongue is essential to provide a clear insight into and understanding of language and people.

Writers and poets are revered in nations and by peoples across the globe for reflecting who they are and the events that forged them and values that formed them. Literature and poetry run deep in the psyche as well as the soul of many nations, and help to pen a portrait of them and their people. Zola, Balzac and Voltaire in France; Goethe, Hesse and Grass in Germany, and Tolstoy, Chekhov and Pushkin in Russia all reflect the land of their birth.

Closer to home, while Wordsworth, Shakespeare and Dickens are quintessentially English, Burns, Scott and Stevenson are irredeemably Scottish. Their words and prose define who we are and are reflected in the values that we uphold. It is for those reasons that we celebrate the words of our national bard on Burns night and on many other occasions. Similarly, Scott, Stevenson and others provide a backdrop for the Scottish people. They pen a picture of Scotland, not of "Braveheart".

There was an age when it seemed that literature in Scotland was frozen in time by those greats and one or two others, such as the recently passed away and fondly remembered Robin Jenkins. That has changed recently, with a veritable explosion of works by new and not so new authors. Bookshelves in Scotland are now awash with the young and old, the experienced and inexperienced, trying their hand at writing their prose and reflecting their people. For that, some credit must be given to the Executive for actions and initiatives, but it is all threatened by the potential takeover of Ottakar's by Waterstone's. That is why this is not just a commercial debate that should rest with Westminster, but a cultural matter that goes to Scotland's very soul.

It is not simply the encouragement of Scottish authors and poets in their work, but the ability of those writers to access the Scottish public and the availability of the fruits of their labour in our high street bookshops that matters. Writers require not just support to write their works, but the opportunity for the rest of us to read those works if the history that defines who we are is to be available in future years. That is why this takeover is not just bad news for the staff at Ottakar's but for Scottish writers, publishers, printers and ultimately readers.

Ottakar's has a good name in promoting and supporting not just Scottish writers but local writers in what is, after all, a small land with distinctive communities. Alan Bissett's musings about Falkirk trigger memories for those of us who are from central Scotland, but not necessarily for people who come from elsewhere in Scotland. What reflects Glasgow does not necessarily reflect the northern isles. That ethos is not shared by Waterstone's.

Waterstone's is perceived as being highly centralised in the context not just of Scotland, but of the United Kingdom. For Waterstone's, sales matter more than taste and a book's value to the company's profit margin matters more than the intangible values that are deeply embedded in a nation's soul or psyche.

If the takeover goes through without cast-iron guarantees being obtained, the consequences are potentially catastrophic. If our literature is not available to be read, writing will not flourish but wither and what remains of our publishing sector will follow. Ultimately, our people will be denied what Solzhenitsyn called the flame of their spent history.

It will be the ultimate irony if such an event occurs when Edinburgh has just received the accolade of world city of literature. For sure, the award is merited, but if the city's literature is to have a future as well as a past, it needs a publishing, printing and bookselling sector that is vibrant, not historic.

If our writers are not to join the litany of past greats such as Bartholomew or Collins, they need to be protected and nurtured. The Executive must make it clear that Scotland is unique, as displayed by its literature. We are not a region, but a nation with a soul. That means that we need to be treated distinctly by the Office of Fair Trading. Our needs and wants are unique, as they reflect our past and our desire for a future.

In the event that a takeover proceeds, assurances must be obtained that works of Scottish authors and prints from Scottish publishers will continue to be stocked. Such stocks should not be limited to the greats, such as Ian Rankin and J K Rowling, whose works sell on a global scale, but should include those authors who cater to a Scottish market or to a specific area within our small nation.

This is not a narrow commercial matter but a cultural necessity and potential economic catastrophe, so the Executive must become involved. A takeover by HMV would be bad for writers as well as readers; it would affect our culture as well as our commerce. At worst, it would deprive our writers and publishers of the oxygen that they need to live and breathe; at best, it would denude our high streets of the diversity of outlets that book lovers desire.

Ottakar's might not be Scottish Power, but it is arguably just as vital. Anglophone—never mind Francophone—Canada protects its literature and prose as well as its indigenous publishing and artistic sector. Ireland, too, offers protections and so must Scotland. To say that the issue is a commercial matter that is reserved to Westminster is to abdicate responsibility not just for supporting our country's writers and poets but for protecting our nation's very soul.

I ask the minister to ensure that Scotland's voice on such matters is heard, that the points that I have made are put and that our nation's soul is protected.

Photo of Mike Pringle Mike Pringle Liberal Democrat 5:13 pm, 9th November 2005

At the heart of the culture of any country are writing and literature, and nowhere is that more true than in Scotland. As Kenny MacAskill mentioned, the monuments to Scott and Burns provide visible reminders of that on the skylines around the Parliament. Indeed, the latter's verse was read at the opening of this institution.

It is ironic, therefore, that the period since the Parliament's establishment has seen the systematic destruction of the primary means by which Scotland's writers and readers interact. Bookshops are at the heart of writers' ability to reach their audience, but the Scottish sector has suffered. Companies such as John Smith and Son and James Thin Booksellers are no longer Scottish-owned. Furthermore, no library supply is now done from Scotland. Hundreds of jobs have been lost, yet the Executive has failed to respond to this massive loss of control in a sector that is crucial to ensuring the continued vitality of Scottish literature.

Although it was unfortunate that James Thin's was bought by Ottakar's, the latter has fortunately continued Thin's traditions of autonomy and of commitment to Scottish books and culture. Ottakar's has a Scottish range marketing manager and Scottish operating managers. By contrast, the outcome of a takeover by HMV/Waterstone's will likely be that a small team in Brentford, somewhere south of the border, will decide what the people of Scotland should read.

Kenny MacAskill refers to Scottish writers. I remember about two years ago attending the saltire awards, where I was seriously impressed by the books that people had written. All of them were Scots. Afterwards I asked one of the book publishers how much money the writers made out of their books. He said that they write for the love of writing and make very little—with the exception of those who win a saltire award. Even they do not make much. Will we say to all those writers that they will no longer get the opportunity to publish their books and to have them stocked in Scottish shops?

The takeover would mean massive centralisation of purchasing. Twenty-six of Scotland's 31 reasonably sized bookshops would be in the hands of one group and there would be a loss of competition, resulting in a monopoly. The New Economics Foundation recently warned of Britain's worsening clone town condition. If the takeover goes ahead, it will ensure that the towns of Scotland take a further major step in that direction.

The Executive argues that this is a reserved matter, because it is a competition issue. However, the fact that the motion was chosen for debate indicates that it is aware that this is also a major cultural issue. Whether or not the Executive has power in the matter, it must surely be able to exert influence. Who will speak up for the protection of Scottish culture and literary diversity, if not the Executive?

The Executive may support Scottish writing and publishers, but that is to no avail if their access to the market is stifled by the imposition of large-scale centralised uniformity on the overwhelming majority of major bookshops. Perhaps the Executive's real attitude is shown by the problems that we are seeing in other areas within its competence. Only a few years ago, the percentage of library budgets spent on books was 20 per cent; now it is 9 per cent. Even returning to the previous inadequate figure would inject £10 million pounds of book purchasing into the Scottish economy. Why is only 2 per cent of the current £8 million book spend—30p per head of the population—spent on Scottish cultural material? Why is the Executive not more active, at a time when Northern Ireland and England are beginning to act on the recommendations and searing critique of Westminster's Culture, Media and Sport Committee? Why is there no clear commercial policy of support for Scottish culture in many of the state-controlled quangos in Scotland that sell books? All of those things are in the Executive's power.

For the reasons that I have outlined, I ask what view the Executive takes of the proposed takeover and whether it will make its views known to the OFT. The Scottish Publishers Association and the writing community in Scotland are utterly opposed to the takeover. The staff of Ottakar's have their own views, but we can imagine what those are. We need the Executive to take a lead on the issue.

Photo of Jamie McGrigor Jamie McGrigor Conservative 5:17 pm, 9th November 2005

I congratulate Kenny MacAskill on securing this important debate. My local branch of Ottakar's is in Oban. I often visit the shop both to buy books and to attend the launches of authors and their new works. I must declare an interest; my mother, Mary McGrigor, is an author whose books are regularly and effectively sold through the company. I will not give members a list of titles now.

Ottakar's has consistently been bookseller of the year. It allows its branches enough autonomy prominently to display the books that are important to their locality and region. It is famous for specialising in Scotland and in children's books. For example, many of the books that are displayed in the front window of the Oban shop feature natural history, water sports, sailing and fishing. Ottakar's has the biggest fishing and craft book sales in Scotland and has expanded its section on natural history, birds and marine life. In so doing, it has made itself an extremely profitable concern. It not only gives local residents and visitors what they want to buy, but gives tourists valuable information about the area and an incentive to go exploring. Ottakar's has sponsored a fresh talent tour of new Scottish authors, holding workshops to encourage people to buy and read books and to encourage would-be writers to create.

The Oban branch also has an outreach service called out and about. It is run by the now famous Mr Neil Horn, who takes Ottakar's books in a mobile van to places such as Lochmaddy in Uist, Tarbert in Harris, Barra, Tiree and the Ardnamurchan peninsula. That is why it was possible for the most recent Harry Potter book to be launched in Lochmaddy at midnight—the same time as it was launched throughout the United Kingdom. Ottakar's and Neil Horn's mobile van made that act of inclusion possible.

Ottakar's branches in Aviemore, Elgin and Inverness do the same for their areas. The Inverness branch has been particularly supportive of books that interest the Gaelic-speaking community. Ottakar's has provided and continues to provide a service to Scotland that would be sorely missed if local specialisation were to disappear under new management. Furthermore, through its book of the month promotion it has focused on new authors and promoted new books that would not usually be promoted in other bookshops. Ottakar's therefore also provides a valuable service to Scotland's new authors. What will they do if that policy changes? Where will they find similar opportunities? It is hard for writers to get going and Ottakar's has been a great help to them.

My arguments for the independence of Ottakar's are all cultural arguments, which unfortunately may not affect the thinking of the OFT as it will doubtless be interested only in competition arguments. However, I put it to the OFT that the takeover will create a monopoly far greater than Tesco's. One would think that that should be enough.

I have nothing against HMV/Waterstone's. Unfortunately, the situation has come about because of a shift in the tectonic plates of the industry, mainly due to publishers giving too generous operating terms to supermarkets and to the internet booksellers. That development is forcing the specialist sector to consolidate and that could be harmful to Scottish culture, Scottish publishers and Scottish writers.

Should the takeover go ahead, it will be up to this Parliament to persuade HMV/Waterstone's that the good practice employed by Ottakar's should be continued, not only for the cultural reasons that I have outlined, but because that practice has been a financial success.

Photo of Jim Mather Jim Mather Scottish National Party 5:22 pm, 9th November 2005

I commend MSP and author Kenny MacAskill for securing the debate. I applaud the three members who have spoken; they have all added weight to a very powerful argument.

I speak against a takeover that I believe is against the public interest; it is another takeover that should trigger the UK Competition Commission's involvement. I subscribe to the view that when we have too limited a choice of suppliers we have, in effect, a monopoly. In this case the monopoly would have not only an economic impact on Scotland but a cultural impact. The monopoly would have an impact on staff's terms and conditions and on their job opportunities. It would affect customers because there would be limited choice and perhaps less well-informed sales staff in the future. It would affect writers in particular because it would be much more difficult for them to get published and to get shelf space. I believe that publishers would suffer brutal deals. Publishers in Scotland would find that particularly hard, given their relatively small volumes of sales. Therefore, as Kenny MacAskill says, there is a cultural threat to Scotland.

It is unlikely that the savings will trickle through to customers and the takeover is even unlikely to deliver additional shareholder value. That is not only my opinion: many other business commentators' experience that has been gleaned over many years supports that belief. Tom Peters, the business consultant, says that

"most studies suggest that, in general, mergers don't pan out" for shareholders, employees or customers.

Frederic Scherer, the noted structural economist, has observed after years of meticulous study that

"on average, mergers decrease efficiency."

In this case, efficiency also has a cultural dimension.

Don Young, the former director of Redland Aggregates, has written a book on the subject—I suspect that Ottakar's stocks it—called "Having Their Cake". He states:

"Strictly speaking large acquisitions ought to be regarded with suspicion by institutional investors ... because of their value destructive history".

We must ask who benefits in such situations. Don Young tells us that the people who benefit from such moves are usually only the current senior management of both companies, market makers, stockbrokers, corporate bankers, corporate accountants and corporate lawyers.

Even W Edwards Deming, the man who transformed the Japanese economy in the 1950s and 1960s, said that invariably

"the conqueror demands dividends with the vicious consequences on the vanquished".

The vanquished in this case would be not just Ottakar's and its staff, but Scottish writers and publishers.

Just last week, Professor John Kay said at the cross-party group on the Scottish economy that it was necessary to have national champions. He said that that was "not ludicrous" and that it was necessary for countries to nurture the competitive advantage in having major domestic companies. I contend that that is true for Scotland. However, in the context of the debate, it is also true for the United Kingdom.

I believe that the Executive has a duty of cultural custodianship that it must recognise. It must also recognise the proposed takeover for the threat that it is. I urge the Executive to act to retain the competitive and cultural momentum in publishing and book retailing in Scotland. After all, this is about the knowledge economy. A vigorous and competitive cultural momentum in publishing and book retailing in Scotland is vital in providing a platform for Scottish writers and publishers to access international readers, and in strengthening the knowledge economy in Scotland year in, year out. I support Kenny MacAskill's motion.

Photo of Chris Ballance Chris Ballance Green 5:26 pm, 9th November 2005

For the avoidance of doubt, I should probably first express an interest in that I am a sleeping partner in a second-hand bookshop.

I congratulate Kenny MacAskill on raising this issue in a members' business debate. It is an issue that is of real concern to the literature sector in Scotland, which is an important sector for Scottish employment. Four hundred and eighty professional writers are registered for the live literature Scotland scheme and there are television, radio and drama writers here, too. We have 80 publishers in Scotland, along with printers, distributors and booksellers. Literature in Scotland is a large industry, despite the fact that only 4 per cent of Scottish Arts Council funding goes to the literature sector. It is a large and largely self-financing sector and there is great concern within it.

Local writers depend on having their work promoted locally to maximise sales. For example, writers in my region need the Ottakar's outlets in Dumfries, Ayr and Carlisle, partly because Ottakar's owns the remains of the big Scottish bookselling chain of James Thin, but also because Ottakar's prides itself on having local autonomy. Its website states that Ottakar's

"is a collection of intensely individual bookshops, run with great autonomy by staff whose commitment to books" is supreme.

Waterstone's prides itself on its large, centralised style. It centralises all its buying in Brentford and, more important, it decides nationally on promotion of that stock. Therefore, a local writer who is trying to sell a book in his or her local bookshop will have difficulty not just in getting the book on to the shelves but in getting it promoted where it is likely to achieve maximum sales.

The proposed takeover is particularly bad news for people who write for young people and children, because that audience constitutes a relatively small percentage of the population. Not every children's writer marks up sales like those for the Harry Potter books, but those are the only sales in which Waterstone's has a keen interest. Writers whose interests are more local or who have a Scottish audience are bound to lose out against big-buying mass procurement.

The potential narrowing of choice also alarms people who write specifically Scottish books. Waterstone's is a pan-British company that is unlikely to recognise that a national Scottish interest is important to people who live north of the border when its purchases are entirely controlled from Brentford. The proposed takeover is an example of clone Britain; it is another example of a big multinational taking charge and ensuring that our high streets look the same the length and breadth of the country.

My colleague Robin Harper asked me to mention that there is an inaccuracy in Kenny MacAskill's motion, because it omits reference to the honourable chain of David Flatman Ltd, which is a small, Scottish-owned chain: we are not quite down yet.

This is a Scottish issue and one on which the Scottish Parliament must have a voice. If this takeover goes through, Waterstone's will have a 30 per cent market share. That is significantly different from the 23.6 per cent share that it says it will have in England. Its having such a share in England and Wales would be enough to trigger automatic call-in by the Department of Trade and Industry. The potential takeover would mean that 26 of Scotland's biggest 31 bookshops were owned by one company—a decision made in London would affect Scotland. The Scottish Parliament must have a voice. Across the parties, we ask the minister to ensure, please, that our concerns are relayed to the DTI.

Photo of Donald Gorrie Donald Gorrie Liberal Democrat 5:30 pm, 9th November 2005

I congratulate Kenny MacAskill on securing this debate and on his excellent speech, which has been followed by other good speeches.

Yesterday in the Procedures Committee we had a round-table discussion with six leading citizens of Scotland from different spheres. One of the interesting comments that were made was how much better on the whole members' business debates are than ordinary debates. In ordinary debates, parties rule, boredom rules and abuse rules, but this members' business debate has been excellent. I will not regurgitate the excellent points that have been made by colleagues on all sides.

I have little admiration for people who try to control monopolies. My only experience of them from my days of representing part of Edinburgh at Westminster was when I tried to help a local newsagent who felt that he was getting a raw deal from the firm that then had a monopoly in wholesale distribution of magazines, newspapers and so on. The fair trading people said, "No, no. It isn't a monopoly. It covers only Scotland." The proposition was that this gentleman should get in his car in Corstorphine early in the morning and drive down to Berwick to load up with magazines and newspapers from WH Smith before driving back to Corstorphine to sell them. The whole thing was absurd and the fair trading people did not realise quite how absurd it was. We will have to work very hard to persuade them to accept that a monopoly in Scotland, or a quasi-monopoly, is still a monopoly.

It is important that we pursue the issue and, more generally, that we pursue publishing issues. One of my views on the way in which Government works is this: if a thing fits comfortably into a niche, it is often dealt with quite well, but if it falls between two stools it is dead. Publishing is to do with economics and enterprise, but it is also to do with culture and creativity at the heart of Scotland. The art and creativity side and the enterprise side have each left things to the other.

The Executive should be in contact with publishers and writers—it should not simply be dishing out money to unsuccessful ones but should be talking to successful ones to find out how they can be more successful. I am told that there are obstacles in the way of efficient and successful publishing in Scotland that could be swept away. People are not looking for handouts, but for fairness, which they do not get at the moment.

At the risk of trespassing on dangerous territory, my understanding of devolved government is that we can deal with the problem and put pressure on people in London. We can say that the matter is vital for Scotland and that they really must do something about it. If we fail to do that, we will undermine the legitimacy of devolution. Another option is available and we really have to deliver.

I say to the minister that the issue is important for many Scots. He must show that the Executive is taking the issue seriously and that it is putting maximum pressure on the people in London.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party 5:34 pm, 9th November 2005

The city of Dundee was known for jam, jute and journalism and, of course, the city of Edinburgh is known for print, publishing and pints. Those traditions have continued, although not on the scale of the past. In particular, Scottish book publishing has been a success story that has perhaps not been celebrated as much as it should have been.

In addition to previous generations of writers, we also have the current generation of writers, including A L Kennedy and J K Rowling, I am pleased that Kenny MacAskill mentioned one of my favourite authors, Robin Jenkins.

We should also recognise the publisher Canongate Books, which is the publisher of the award-winning novel "Buddha Da" by Anne Donovan. Members have received in their in-trays the publication that I have with me today, which is Anne Donovan's short story "But". It explains a carer's life in fictional terms and will touch everyone who reads it. Literature does not sit only in a historical context or outside this chamber; it can reflect our current state of affairs and our soul as a nation. I implore the minister to consider the motion; the issue is not one from which the Executive can stand back.

One of the Executive's targets is to achieve a 3 per cent increase in cultural successes. I am not sure how it will measure cultural success in terms of its quantity; surely the issue is more about quality. If a 3 per cent increase in cultural success is Government's target—I understand that there are measures by which to judge the increase—the takeover that we are debating could have a detrimental effect on the target because of its effect on Scottish publishing. If the minister is looking for a reason to get involved, I suggest to him that one reason is that publishing is part and parcel of Scottish life and so the Executive should take a lead role.

I agree that the argument can be made that the subject of the motion is a commercial venture and that Government should therefore not intervene. People will say that takeovers will happen because we live in a global marketplace. I am sorry—I would say to those people that protection of a national interest is an issue on which, even in this day and age, Government can have an impact. I congratulate Kenny MacAskill on the motion and for his suggestion that we involve the Competition Commission. That avenue is real and we should pursue it. As I said, it is not possible to judge culture by the quantity of its production but by its quality. It is also not possible to measure the soul of a nation in terms of pounds, shillings and pence. One can ensure only that there is the political leadership to do something about it.

Members may have heard of the publisher Itchy Coo, which is not a Friesian with skin problems but a Scottish book imprint. It was established in January 2002 to specialise in books in Scots for children. The books are also very entertaining for adults, however. I need only mention titles such as "Blethertoun Braes: Manky Mingin Rhymes fae a Scottish Toun" and the "The Hoose o' Haivers". Itchy Coo's publications bring a cultural resonance to young families. I am reading its counting book with my 16-month-old baby at the moment. The books' Scots perspective makes an important and viable contribution to publishing. The Itchy Coo website says that its books are available online and also at "all good bookshops". I hope that the success of its publications mean that bookshops continue to stock its titles and those of other Scottish publishers. However, if the main book-buying centre of the start-up company or a future new start-up company is located in the south-east of England, will it give that guarantee? I have my doubts.

If we are to ensure that we can have a culture to encourage and protect in future, Scottish book producers need suitable outlets for their titles. I have looked at its management structure and I commend Ottakar's for embracing and taking on board the need to include local markets. Ottakar's has seen its market share increase by 3.5 per cent over the past year as a result of that policy.

Scottish culture can be a success. It is not something that stands outside the chamber in a commercial world; rather, it is a living, breathing part of the political life of Scotland. On that basis, I urge the minister to take whatever action he can.

Photo of Allan Wilson Allan Wilson Labour 5:38 pm, 9th November 2005

I associate myself with the remarks of Jamie McGrigor and other members in congratulating Kenny MacAskill on securing the debate. I also congratulate him on his opening gambit.

Literature has always played a part in shaping the culture and identity of Scotland. I think that it was Edwin Morgan who said:

"Forget your literature? — forget your soul."

Whether he was referring to a national soul is open to interpretation, but who could argue with the sentiment? Certainly not I.

From correspondence that I and other ministerial colleagues have received, I fully appreciate that the views that have been expressed this evening, albeit by a few members in the chamber, reflect the concerns of many in the publishing and literary community on the issue. As members have said, literature is undoubtedly one of our principal national assets. For centuries, Scotland has enjoyed a rich literary tradition. I believe that we have a new writing future, moving from Burns, Scott, Stevenson et al to the new era of McCall Smith, Rankin and Welsh, who were all mentioned earlier. Last year saw the opening of offices for the publishers Penguin and Hodder Headline in Edinburgh and Glasgow, purely for the acquisition of new work from Scotland.

Literature is central to our nation. Writers have always played a key role in helping to articulate and shape Scotland's sense of itself. Today, literature undoubtedly helps every Scot to live and work and to achieve our ambition of a smart, successful Scotland. The Executive wants to place literature at the heart of every community. We want it to be accessible to every citizen.

The Executive supports Scotland's literature community through the Scottish Arts Council. On the Executive's behalf, the SAC sustains and promotes literature in various ways. Indeed, as minister with responsibility for culture some time ago, I played no small part in establishing the writers factory with its then chairman James Boyle. The SAC supports scriptwriters, playwrights, poets, novelists, publishers, readers and literary festivals. It raises Scotland's international profile. It encourages publishing in Gaelic and Scots, as has been mentioned. It supports Edinburgh as world city of literature. It provides new resources for children's literature. Most recently, it funded the new e-commerce portal for Scottish publishing.

Photo of Jamie McGrigor Jamie McGrigor Conservative

Would the Executive accept all the things that the minister mentioned—which I support—being damaged because the OFT does not take notice of regional monopolies?

Photo of Allan Wilson Allan Wilson Labour

The OFT will take into consideration market definition, the nature and extent of competition in the market, entry barriers, buyer power and, critically, customer benefit. Many members have argued that customer benefit would be curtailed following a merger. I believe that the OFT could and should take that into account.

Gavin Wallace, head of literature at the SAC, commented that the council

"has serious concerns that the proposed takeover ... will have far-reaching implications for the stocking of culturally-relevant books in Scotland. This deal may not be in the long-term interests of Scottish publishers, Scottish writers and the Scottish book-buying public".

We have some sympathy with that sentiment, which members, too, have expressed tonight. In that context, I must also note that Dr Wallace went on to say:

"it could also be argued that more outlets for Scottish books may emerge as a result if this takeover goes ahead."

Our commitment to the promotion of a vibrant literary culture in Scotland should not be misunderstood. As I said, an exciting array of new Scottish writing talent is emerging. If the merger goes ahead, it would be foolish in the extreme for Waterstone's to turn its back on that talent and deny it a commercial outlet. Indeed, Alan Giles, chief executive of the HMV Group, in response to the concerns of a group of 40 Scottish writers, wrote that it was in the commercial interests of Waterstone's to provide

"genuine interest, choice and diversity" and to

"continue to play a central role in the promotion of Scotland's literary culture, not to mention the works of Scottish authors north and south of the border."

I hope that, when the OFT considers the proposed merger, it will ensure that it is satisfied that Waterstone's has taken the appropriate steps to keep those promises.

Photo of Chris Ballance Chris Ballance Green

For clarification, is the minister telling us that, following the debate, he intends to make no representation whatever to his colleagues in the Department of Trade and Industry?

Photo of Allan Wilson Allan Wilson Labour

For clarification, strict guidelines apply to ministerial statements at the time of takeovers. The key point of the guidelines is that ministers may comment on wider public policy issues that arise during a case—which members would concede I have done this evening—but they should not comment publicly on the specifics of a live competition case, such as its effects on competition.

That leads me neatly to my next point. Competition policy, including that on mergers and takeovers, is of course a reserved issue. Not only is it reserved, but the United Kingdom Government, much in the same way as it ceded the conduct of monetary policy to the independent monetary policy committee of the Bank of England, has ceded mergers and takeover policy to the equally independent competition authorities: the Office of Fair Trading and the Competition Commission, which operate free from Government interference. The Enterprise Act 2002 means that ministers, both in Westminster and in Holyrood, are removed from competition decisions. We have no power to intervene in any takeover or merger, even if we were minded to do so. Mergers and takeovers are matters for the competition authorities to consider and make recommendations on—it is for them and them alone to decide. The authorities have wide-ranging powers to investigate and deal with mergers or takeovers that they decide could result in a substantial lessening of competition. I gave earlier a brief résumé of the issues that the OFT takes into account.

On a point that Jim Mather made in his interesting speech, decisions in takeover bids should of course, in the first instance, be a matter for the management and shareholders of the companies that are involved. On 1 November, the HMV Group, which owns Waterstone's, announced on the London Stock Exchange that it had extended its offer of 440p per share for a further 18 days until 1 pm on 18 November. It announced at the same time that, as of 3 pm on 31 October, it had received valid acceptances in respect of almost 14.5 million Ottakar's shares, which is two thirds of the issued share capital. So while we discuss and debate our views on the best interests of Scottish authors and publishers and the book-buying public, Ottakar's shareholders have clearly expressed their view.

I turn to the current state of play. Since the OFT began its investigations in early September, when it invited comments from interested parties by means of an invitation-to-comment notice, our officials have kept in touch with the developing situation. The opportunity to comment closed on 23 September. Normally, the OFT works to an administrative timetable of 40 working days, which means that it was expected to announce on 3 November whether it would refer the takeover to the Competition Commission or whether it would impose undertakings on HMV/Waterstone's to remedy any adverse competition effect in lieu of a reference to the Competition Commission.

However, that is an administrative timetable only and is not binding on the OFT. In certain complex cases, the OFT may decide to take longer to examine issues in greater detail. I understand from my officials that, because of the wide and varied representations that have been made—many of which have been raised tonight and which have been the subject of discussion between the parties—the OFT has decided to do just that. It has not reached a decision on whether to refer the takeover to the Competition Commission and that is where the matter rests at the moment. As has been said, the views that have been expressed this evening will undoubtedly be a matter that the OFT will wish to consider as part of the process.

Meeting closed at 17:50.