Clydesdale Bank Job Losses

– in the Scottish Parliament on 20th December 2012.

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Photo of John Scott John Scott Conservative

The next item of business is a members’ business debate on motion S4M-05153, in the name of Drew Smith, on job losses at the Clydesdale bank. The debate will be concluded without any question being put.

Motion debated,

That the Parliament notes with disappointment the announcement by National Australia Group that over 200 people in Scotland will lose their jobs at Clydesdale Bank sites across Scotland, including in the Glasgow region; understands that this brings the total number of jobs lost to 400 since 2011; regrets that, as part of the strategic review outcome for the Clydesdale and Yorkshire banks, four financial solution centres will close in Scotland, in Paisley, Bearsden, Dunfermline and Inverurie; believes that this will have a negative impact on staff and their families who are affected by the closure, and regrets the loss of developed skills at sites across Scotland.

Photo of Drew Smith Drew Smith Labour

I am grateful that the motion has been selected for debate and thank all those members who have signed up to both the motion that we are debating today and my earlier motion on the same subject. I welcome to the public gallery Alison MacLean, senior Unite the union official for the finance sector, and Jenni Brown, chair of the National Australia Group committee of Unite and chair of the Unite finance sector committee. I refer members to my entry in the register of members’ interests, which shows that I am a member of the same union.

The Clydesdale Bank is an important institution in Scottish banking. It was founded in Glasgow in 1838 and it is the personal bank of many Scots and of many small and medium-sized Scottish businesses in all parts of the country. Since 1987, the Clydesdale has been part of National Australia Group but has retained its focus as a Scottish clearing bank, headquartered in Glasgow, continuing to issue Scottish bank notes and giving support to many Scottish causes. That is particularly true in the field of sport, where it has been a sponsor of the Scottish Premier League since 2007 and of the Scottish Commonwealth games team since 2005. There are 300 Clydesdale branches throughout the United Kingdom, but around half of them are in Scotland and Clydesdale employs 3,670 staff here. For all those reasons and more, it is right that the Parliament takes a close interest in Clydesdale and the workers who are employed by it.

In February, National Australia Group announced a strategic review of its UK operations by Clydesdale, including Yorkshire Bank, and I raised the issue in this chamber with the First Minister. At that time, I wanted to ensure that the most robust defence possible was mounted to protect Scottish jobs both because of the value of the jobs to those who do them and because of the strategic importance to the Scottish banking industry and the wider Scottish economy of this Glasgow institution, which has been the subject of previous speculation about National Australia Group wanting to divest itself of the bank.

Throughout the review period, I have kept in close contact with the banking section of Unite, and I have asked the First Minister to agree to meet union representatives to discuss their concerns. The Scottish Government met Clydesdale management and I am grateful for that, but I am disappointed that correspondence that I have had with the First Minister appears to indicate that no specific meeting with Unite took place that was focused on the uncertainty that has been experienced by Clydesdale workers.

Members who have supported the motion in my name will share my concern about the news that has since emerged from the bank—specifically, the bank’s decision to close a number of financial solutions centres in Scotland. Two business and private banking centres in Dunfermline and Paisley will close; two so-called “satellite” centres at Inverurie and Bearsden will also close; and the business and private bank centre in Stirling will be subsumed into the town branch.

Those closures reflect the bank’s desire to cut costs. National Australia Group’s intention is to withdraw Clydesdale Bank and Yorkshire Bank from property development and investment lending and to concentrate their activities on personal lending and private banking accounts. Obviously, I welcome any move that has as its objective the correcting of past mistakes, but the staff who are to retain their jobs will want to be certain that the new course that National Australia Group has set for the Clydesdale is the correct one.

Prior to today’s debate, I have been advised by Clydesdale Bank and the union that—and I welcome this—many of the affected staff will have the opportunity to transfer within the business and most of those who leave will do so through voluntary redundancy. However, it is a matter of great regret that some will be made compulsorily redundant. The figures that I have been given by the bank indicate that 20 Scottish staff are to be forced out in that way. I understand that a number of staff from across the United Kingdom who are to leave their jobs will do so today.

In some respects, Glasgow is likely to be a beneficiary of centralisation of some of the bank's activities, so I can hardly fail to welcome any new jobs that might be created in, or moved to, my city. However, that does not lessen my concern that, as a result of the changes, the Scottish banking sector will lose almost 100 jobs, which is up from the previously suggested figure of 60. That follows on from the considerable pain that has been experienced by workers at Clydesdale’s larger competitors in Scotland over recent years and, indeed, weeks given the news that Lloyds Banking Group is to close its call centre in Motherwell.

It could be said that Scotland will fare better from the changes at Clydesdale and Yorkshire because the majority of the 1,400 jobs that are going will be lost in other parts of the UK—in particular, as I understand it, in the south of England. However, redundancy, whether voluntary or compulsory, will be difficult for many of the bank’s hard-working and loyal staff, particularly—it may be a cliché—at this time of year, although, in truth, to be told that one’s job is no longer required by an employer is always a traumatic experience, whenever and under whatever circumstances it occurs. For many of those who will leave Clydesdale Bank, where they will find new employment is uncertain, and it is concerning that many of their skills will be lost.

In seeking a debate in Parliament, I sought to highlight the changes that are occurring at Clydesdale, which essentially involve a retreat by the bank into its traditional heartlands and into more traditional banking products. The bank’s future success is important for its customers, who include a significant proportion of small and medium-sized businesses in Scotland, and as a source of good-quality employment in the banking industry.

Photo of Roderick Campbell Roderick Campbell Scottish National Party

Does the member accept that the fact that many of the Clydesdale Bank’s lending products to small businesses are now the subject of a review by the Financial Services Authority cannot do much good for the bank’s long-term reputation?

Photo of Drew Smith Drew Smith Labour

I am not aware of all the details of that review, so I would not wish to comment on it other than to say that, by debating the motion in the chamber, my concern is to shine a light on Clydesdale Bank so that we can do all that we can to ensure that the bank remains an important part of the Scottish banking industry. Clearly, maintaining the bank’s reputation in all respects is absolutely vital to that.

In closing, I take the opportunity again to urge the management of Clydesdale Bank and its owners in National Australia Group to continue discussing the future of the bank with their staff and with Unite representatives, not least because I know that the many changes to the bank’s internal structures and the need to manage the staff who will remain will require the close co-operation of the staff side if the changes are not to be a precursor to further retrenchment in years to come. National Australia Group also needs to make it clear that it has a long-term commitment to Clydesdale and is not simply preparing to sell up when it believes that the market is right.

I urge the minister and the Scottish Government to take a close interest in the decisions that are being taken. A close eye will help to ensure that the Clydesdale Bank remains an important name on Scotland’s high streets, a vital banker and lender to Scotland’s small businesses and a significant employer of bank workers in the years ahead.

Photo of Richard Lyle Richard Lyle Scottish National Party

I congratulate Drew Smith on securing today’s debate on the proposed job losses at Clydesdale Bank. As a Clydesdale customer for more than 40 years, I am surprised by the bank’s actions, as reported by the BBC, to reduce its workforce by nearly 1,400 by 2015.

The Glasgow-based lender, which includes Yorkshire Bank, says that bad debts have risen by almost 90 per cent to reach £631 million. Its bad debt problem has been attributed to falling commercial property values. The bank made an underlying profit when bad debts were excluded, but it reported that the profit was down 16 per cent to £448 million—as reported by BBC news Scotland business.

Along with the Yorkshire Bank, the Clydesdale Bank has cut costs, with 468 jobs shed during the year to September. The chief executive of the Clydesdale Bank has said that the UK Government’s austerity programme has contributed to the harsh business environment and its decision to carry out the review.

The two bank brands run out of Glasgow have been the subject of long-running speculation, as the National Bank of Australia, the parent company, has sent out conflicting signals on what it wants to do with its only European operation. The Australian economy is doing relatively well and, with opportunities to expand in Asia, the Clydesdale Bank has increasingly been seen as a problem for its owner. The group chief executive has stated that UK gross domestic product has declined by 0.2 per cent in the quarter to December and that those difficult conditions have adversely affected the performance of UK banking.

Over the past few years, we have heard and read about the banking crisis. Household name banks have been partly taken over by the UK Government through the buying of shares. For 10 years, I worked for one of those household names—the Royal Bank of Scotland. Our division was made redundant, so I know what redundancy feels like.

In the 10 years prior to the millennium, everything was rosy, particularly for the Royal Bank of Scotland. Management wanted to mark the millennium, which it did by making a £2 billion profit in the year 2000. Banks could do no wrong, the money poured in and out, profits grew and the share prices rose. They thought that it could never end, but we had forgotten about black Monday and black Wednesday in the prior decades.

With the on-going financial crisis, over the past number of years household banks have paid the price. I would suggest that too many jobs have been lost in the branches and centres in the banking sector, and I will speak about those.

The Clydesdale Bank has not been swept up in the storm that has erupted. The bank has not had the same daily publicity as other national banks have had. The management of the bank needs to look at its future decisions. As I have said, I am a customer of the Clydesdale Bank. I believe in that bank—I still believe in the Royal Bank of Scotland—but I get annoyed when I have to wait in a queue, when there are not enough tellers on the desks, when I have to wait for phones to be answered or when I receive an automated answer when I phone a call centre. I get annoyed when the Clydesdale bank in my local town is not open on a Saturday when the Royal Bank of Scotland across the road is.

Not everyone has a computer; not everyone wants to do money transfers over the internet. Some customers believe in counter transactions and want to have a face-to-face conversation in their local bank. They also want call centres and financial solutions centres, which are required for customers who do internet banking.

I know that some banks close early because they say that customers are not coming into the branch. They do not come in because they are working. I strongly suggest that banks should stay open late for their customers. They do not cater for customers through their call centres and they do not cater for customers now as they did in the past. They must cater for all customers who use branches and call centres.

I get annoyed when people who have worked for a firm for many years, have given good service and commitment and have made profits for the firm, and who have rent or mortgages to pay, car payments to make and families to look after, are cast on to the scrap heap because a firm wants to restructure.

The Clydesdale Bank is a good bank and I hope that it will still accept my business, even after this speech today, but I ask the Clydesdale Bank to reconsider its proposals for further redundancies in its centres. I also ask all banks to provide a better service. I am sure that the Clydesdale Bank could show the way to other banks by providing confidence in the way that it carries out its business. The Clydesdale Bank is an asset to Scotland and its staff deserve better. I ask its owners to reconsider their plans and to give their call centre staff the Christmas that they deserve. I support Drew Smith’s motion.

Photo of James Kelly James Kelly Labour

I congratulate Drew Smith on securing the debate on the important issue of job losses at the Clydesdale Bank.

The motion focuses on the recent spate of job losses, which build on the previous announcement in 2011. As Drew Smith said in his speech, the most recent run of job losses numbers 100. However, the issue is not just that statistic, but the impact that the losses have on individuals’ lives.

Particularly in the run-up to Christmas, the prospect of losing a job is deeply unsettling for families, and that feeds into local communities. The proposal to close four solutions centres in different communities in Scotland means that jobs will be lost in each of those areas. That has a knock-on effect not only on families but on local businesses and local economies. We should reflect on that.

Like Drew Smith, I pay tribute to the campaign that the Unite trade union has led, opposing the job losses and speaking up in support of its members. It shows the importance of trade unions in the workplace, representing people and giving voice to their concerns and anxieties.

Another deeply regrettable aspect of the job losses is that the jobs that are going are skilled jobs. We hear a lot of talk about the importance of growing the economy, and we will no doubt hear it again this afternoon in the Finance Committee debate on the draft budget. One aspect of that is the need for skilled jobs and skilled workers. It is to be regretted that the Clydesdale Bank’s downsizing is taking skilled jobs out of the economy. That has an impact not only on people’s lives but on economic growth.

Richard Lyle poses an interesting question. The Clydesdale Bank has advanced a model to try to make its business more successful but, as he pointed out, some of the measures that it has introduced result in longer queues and people being stuck on the telephone for longer than they would wish. That has an impact on the bank’s customer base. People, understandably, do not like such treatment and will go to other banks. The bank must reflect on the proposals that it is making and whether they will lead to good business.

The Clydesdale Bank has a good record of supporting community events but if a business is going to talk that up, it needs to be prepared to give something back to the community. That is not what it is doing by closing down the four solutions centres in different parts of Scotland.

It is important that the bank reflects on the business model that it is advancing and the impact that it will have on people and communities. I also urge the Scottish Government to use its influence in discussions with the bank to minimise the impact of the job losses and to try to advance an alternative business model that will not only safeguard the jobs but benefit the wider Scottish economy.

Photo of Gavin Brown Gavin Brown Conservative

I, too, congratulate Drew Smith on securing the debate.

There is bound to be disappointment across the chamber at the loss of jobs being suffered in the Clydesdale Bank. There is genuine regret at the closure of the financial solutions centres. I thought that they were a particularly innovative invention and it is disappointing to see any of them go.

We must all acknowledge the effects on those who will lose their jobs and on their families—particularly, as has been highlighted, those who are not given voluntary redundancy but are forced into it.

Members will probably be united in their emotions about these issues. However, two points on the strategic review of the bank are worth noting and give us some hope for the future.

First, it is the bank’s intention to concentrate, in future, on its heartland, which it describes as Scotland and Yorkshire. If that intention is carried through at an operational level, that will be welcomed not just in Glasgow, which Drew Smith spoke about, but in other parts of Scotland.

Secondly, although painful short-term decisions are being made, we must hope that if a more sustainable and secure operation is created, that will be better for Scotland and the Clydesdale in the long as well as the medium term. Only time will tell whether the strategic review achieves that, but if it does, it will make the jobs that still exist more secure. In addition, it will—we hope—enable the bank to attract more business and start to grow successfully again.

I suspect that the minister is bound to address this when she sums up, but I would be interested to know, just for the record, what work the Government has done with the Clydesdale in relation to the redundancies, what meetings have taken place that are allowed to be talked about and whether any action is planned in the coming months to assist those workers who have lost their jobs. I suspect that there are some issues that cannot be discussed in the public domain, but I would be grateful for anything that the minister can put on the record.

It is important that the Clydesdale Bank succeeds in Scotland. It has an extremely good track record over the years. It is an important institution and it has been for a long time, as has been pointed out. We need the bank to succeed, for the good of the Scottish economy. It is a large employer, with branches and important centres all over Scotland. We must hope that that remains the case.

The future of the bank is also critical in the sense that we need competition in our banking sector. If we were to lose a large slice of the Clydesdale’s operations, that would make banking in Scotland even less competitive than it is at the moment, which, ultimately, would be bad news for business, particularly small businesses, which would have even less choice than they do today. Consumers, too, would have less choice.

For all those reasons, I hope that the decisions that the bank has taken prove to be sustainable in the long term, but I openly acknowledge that some short-term pain is being experienced, and I am sure that the effects on those who have lost their jobs and on their families will be remembered by members across the chamber at this time.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

As other members have done, I thank Drew Smith for giving us the opportunity to discuss the issue in Parliament. For the avoidance of doubt, as I will be talking about banking generally, I declare that—regretfully—I continue to have a shareholding in Lloyds Banking Group.

In what has happened in the banking industry, a matter of great regret is the great division between the rewards that there appear to have been for failure at the top of too many banking organisations and the price that has been paid and the hardship that has been experienced by those front-line staff who have not had the luxury of heavily gold-plated pensions and large pay-offs. At Christmas in particular, our thoughts are with those front-line staff and their families.

The broad causes of the banking difficulty have been well discussed, but a couple of the causes of the causes are worthy of a bit of examination. One of those relates to the interaction between investment banking and clearing banking. In the aftermath of the last crash in the 1930s, the Democrats Carter Glass and Henry Steagall introduced legislation that required separation between investment banking and clearing banking. Section 20 of the Banking Act 1933—the Glass-Steagall act—prohibited any bank in the Federal Reserve system from being involved in

“the issue, flotation, underwriting, public sale, or distribution” of securities. That was a successful innovation that protected the clearing bank system across the world for many generations of bankers and bank customers.

The Glass-Steagall act also put a geographic limit on the operation of United States banks: they could operate only in a single state. That did not work so well. Bank of America, which was based in California, simply went international; Citibank, which was based in New York, did the same. Some of the measures in the act worked and some of them did not work.

In the mid-1930s there was an attempt to overturn some of the Glass-Steagall act’s provisions, but President Roosevelt said that the old abuses would come back if underwriting were restored in any shape, manner or form in the clearing bank system. We are here today because that is precisely what happened, first in the US in the 1960s, when the Glass-Steagall act began to be interpreted in a different way and barriers started to be broken down, and then in the 1980s, when Margaret Thatcher’s Government did the same here. That is one of the causes of the causes.

The other cause of the cause is contemporary and is to do with qualifications. Front-line staff are encouraged to study in their spare time and many achieve a qualification from the Chartered Institute of Bankers in Scotland that is at least equivalent to a first degree and, in my view, much harder to achieve than a first degree, given that people have to study in their spare time.

Such qualifications are regarded as necessary for front-line staff, but banking qualifications and the experience that goes with them have been notably absent from the ranks of senior management in the Royal Bank of Scotland, the Bank of Scotland and, to a lesser extent, the Clydesdale Bank. When RBS and the Bank of Scotland got into difficulties, only a single senior manager in each bank had any banking qualification of any kind. We need front-line staff to be qualified and yet somehow we have a system that allows the people who make the key decisions to be unqualified. I cannot help thinking that that contributes to the problem.

In a sense, the Clydesdale Bank has been lucky, in that it was owned by Midland Bank in the 1980s, when everyone was fearful that Midland was going down the tubes—it nearly did, but the Hongkong and Shanghai Banking Corporation saved it. HSBC sold off Clydesdale, which was ill managed and ill served by its new Australian owners. There was rapid turnover of chief executives, who served for a year or 18 months, and the bank did not have the support that would have enabled it to develop a franchise. As luck would have it, that kept the bank out of some of the mires that other banks got into. Nonetheless, that inattention contributes to where we are today.

I remind members that the Clydesdale used to be called Clydesdale & North of Scotland Bank, so the matter does not concern only Glasgow; it touches on the interests of my constituents and people throughout Scotland.

Photo of Neil Bibby Neil Bibby Labour

I refer members to my entry in the register of members’ interests, because I am a member of Unite.

I thank Drew Smith for securing this important debate. As he said, the Clydesdale Bank is an important institution and employer in Scotland. It is right that we recognise the contribution that the bank makes to our economy, but I am sure that all members were concerned to hear about the bank’s decision to close a number of its financial solutions centres in Scotland. The job losses will undoubtedly have a significant impact on staff and their families, as all job losses do.

The Clydesdale Bank centre at Phoenix Business Park in Paisley, in my region, is one of two business and private banking centres that are to close, with the reported loss of about 20 jobs, as part of the restructuring that will lead to the loss of 100 jobs across four Scottish centres. The affected staff in Paisley dealt with private and business interests, and there were some positions in risk control.

I am pleased that a number of employees have had the opportunity to move to another department in the business, but that offers no comfort to the unfortunate members of staff who face compulsory redundancy through no fault of their own. David Fleming, the national officer at Unite, described the move as

“devastating for staff and their families, many of whom have served the bank for many years."

There is no denying the significant impact of redundancy on individuals and families; there is also the wider issue of the loss of skills and experience from the sector.

The most recent unemployment statistics show that just over 2,700 people in Paisley are claiming jobseekers allowance, which is the second-highest overall figure in the West Scotland region. It is therefore clear that those who lose their jobs at the Clydesdale Bank may face a challenge in finding new employment.

I welcome the bank’s desire to become stronger, more secure and better able to challenge larger banks and to offer choice in the market in which it operates. I have no doubt that the bank has business reasons for its decisions. However, staff at the bank want to know that the new path will not result in another round of job losses and further uncertainty.

It is important to recognise that the job losses at the Clydesdale Bank do not stand alone; instead, they represent a further blow to the Paisley area, following a number of decisions that have had an impact on the local economy and local employment. The job losses come while Renfrewshire continues to trail behind other local authority areas on Scottish Government funding; Renfrewshire Council is the only mainland council in Scotland to have been allocated the minimum possible—the funding grant floor—for the past three years in a row.

Renfrewshire is a fantastic place that has hundreds of excellent employers, thousands of skilled and hard-working employees and good infrastructure links, but it is clear that more investment and more employment opportunities are needed. The new Labour council is working hard to bring in the required investment and to boost the local economy, but its ambition for the area must be matched not only by businesses but by the Scottish Government.

I join Drew Smith and others in urging the Clydesdale Bank’s senior management to continue dialogue with staff and Unite representatives—some of whom are here today—and to take into account the bank’s importance to communities such as Paisley not only as a lender but as an employer.

Photo of Angela Constance Angela Constance Scottish National Party

Like other members, I thank Drew Smith for lodging the motion and securing the debate. I understand and very much share his concerns for the workers in his region and across Scotland.

Like all other banks in Scotland and beyond, the Clydesdale Bank faces significant pressures as a result of the financial crisis. As we have heard, in response to those difficulties, National Australia Bank—the owner of the Clydesdale Bank and the Yorkshire Bank—announced on 7 February that it would undertake a strategic review of its UK operations. That review was prompted by poor economic and trading conditions in the UK.

As Mr Smith said, jobs have been lost. Two business and private banking centres in Dunfermline and Paisley are to close and two satellite centres in Inverurie and Bearsden will also close. We heard from Mr Bibby about the community impact of closures, although I say to him that Renfrewshire receives opportunities for all funding in relation to youth employment.

The Clydesdale Bank reports that all bar 14 of the 51 people located in the four affected centres have transferred to new roles in the Clydesdale Bank or the National Australia Bank Group. Of those 14 people, seven applied for voluntary severance and seven were affected by compulsory redundancy. The Clydesdale Bank reports 104 redundancies in Scotland between October 2011 and September 2012, 84 of which were through voluntary severance. The bank’s figures state that, between October and December this year, a further 66 positions were to be made redundant. The number of redundancies is in excess of 170.

As Mr Smith said, we have heard about the new positions that will be created in Glasgow. The Clydesdale Bank’s stated position is that, over the review period, which takes us up to 2015, the net reduction in roles in Scotland will be fewer than 100. However, like Mr Smith, I think that any job loss must be regretted. We heard Richard Lyle’s personal account of being a financial services worker who experienced redundancy. James Kelly was correct to articulate the human costs of redundancy, which affect not just individuals but their families and communities.

The Clydesdale Bank has articulated its intention that, wherever possible, it is seeking to minimise the number of job losses and is striving to preserve the bank’s Scottish base. The bank has said that it will maintain its retail network of 149 Scottish branches and its retail front-line staffing levels.

According to the bank, compulsory redundancies will be made only as a last resort and so far the majority of job losses have been achieved through voluntary severance. Nevertheless, I recognise that every job lost creates enormous difficulty for the employees concerned, particularly at this time of year. There is never a good time for redundancy but it feels so much worse at Christmas, and all our thoughts are with those workers and their families.

I wish to reassure Mr Smith and to answer some of Mr Brown’s points with regard to this Government’s support and the contact that we have had with Unite the union and the Clydesdale Bank. This Government is doing—and will continue to do—all that it can to support those who are affected by redundancies and we are maintaining close contact with the Clydesdale Bank, particularly as the review progresses.

Both the First Minister and the Cabinet Secretary for Finance, Employment and Sustainable Growth spoke to David Thorburn—the chief executive of the Clydesdale and Yorkshire Banks—when the strategic review was first announced and they discussed the protection of employment in Scotland. In May, the First Minister, who chairs the Financial Services Advisory Board, had the opportunity at a FiSAB meeting to be with both David Thorburn and David Fleming from Unite the union. In October, the First Minister had his most recent biannual with the Scottish Trades Union Congress and Agnes Tolmie from Unite was part of that.

Yesterday, 19 December, the First Minister met representatives from Unite the union to discuss the situation. The First Minister has also now written to the Clydesdale Bank to seek reassurances that everything possible is being done to minimise compulsory redundancies and that there will be no branch closures as a result of the review. The First Minister’s letter is also supportive of Unite’s offer to work with the bank to make more training opportunities available to workers. In particular, there is the chartered banker professional standards foundation grade—Stewart Stevenson spoke of the importance of banking qualifications.

Members will be aware of the role and purpose of the finance sector jobs task force, which works directly with companies to co-ordinate public sector support where restructuring may result in reduction in employee numbers. The task force has offered support to the Clydesdale Bank and will continue to do so throughout the review period. In October, the chair of the task force, Jill Farrell from Scottish Enterprise, also met the Clydesdale Bank.

Importantly, the partnership action for continuing employment—PACE—initiative that provides extensive tailored help and support for employees anywhere in Scotland who are affected by redundancy, also stands ready to provide any support that is required. Where PACE can intervene early, even in these difficult economic times it has considerable success in supporting staff who experience redundancy on to further work.

I know that the National Australia Bank has appointed Penna PLC to support staff who are at risk of redundancy and PACE has continued to make an offer to Penna over and above what Penna is contracted to do. Penna has said that it will certainly refer to PACE as required. As the skills minister, I am happy to keep a watchful eye on that.

James Kelly touched on the important issue of skilled jobs. Of the financial services workforce, 38 per cent are graduates and 50 per cent are qualified at Scottish vocational qualification level 4 or above. One of the challenges for the economy right now is not just unemployment but underemployment, so sectors that employ skilled and qualified staff are very important.

We all know that this is a difficult time for the financial services sector in Scotland and globally. However the Government is fully committed to ensuring the success of the industry in Scotland through the work of our enterprise agencies and FiSAB, which is chaired by the First Minister and supported by the highest levels of the industry in Scotland, and we will continue to offer support via PACE.

I reassure the members who have participated in the debate and the workers who are currently experiencing or are at risk of redundancy that the Scottish Government most certainly will continue to take a very close interest in the matter.

13:10 Meeting suspended.

14:15 On resuming—