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Scotland’s Future Economy

– in the Scottish Parliament on 16th January 2019.

Alert me about debates like this

Photo of Linda Fabiani Linda Fabiani Scottish National Party

The next item of business is a debate on motion S5M-15390, in the name of Richard Leonard, on Scotland’s future economy. I invite members who wish to speak to press their request-to-speak buttons. I call Richard Leonard to speak to and move the motion.

Photo of Richard Leonard Richard Leonard Labour

In recent weeks, we have witnessed again the unacceptable face of capitalism, from Kaiam Europe Ltd in West Lothian to Healthcare Environmental Services Ltd in North Lanarkshire. While Parliament was in recess, almost 500 working women and men discovered first that they would not be paid and then that they were losing their livelihoods altogether.

There are outstanding questions about both those recent workplace closures, to which I hope we will get answers this afternoon—questions about who, including Scottish Government officials and even ministers, knew what and when. We will come to them in the debate. The point is that the industrious women and men who worked in those firms and who, through their hard work and endeavour, created the wealth that built those businesses up, were the last to know. By any measure—economic, social or moral—that is simply not right.

We will move the motion and have raised the debate not simply because that is a battle over jobs in the Scottish economy—although it is. We have done so it because it is also a battle over justice in the Scottish economy.

The trouble is that what has happened in recent weeks is not unique. Over the past few months, I have met too many working people whose jobs are under threat. Along with Colin Smyth, who will speak later in the debate, I met Pinneys of Scotland Ltd workers in Annan, where 700 jobs have been lost in a devastating blow to the local community. In fact, I met those people on the day when the first of them were leaving the factory for the last time. They told me that it felt like a bereavement.

Just before Christmas, I met the workers at Gemini Rail Services UK Ltd in Springburn, whose jobs are also now under threat—jobs that have existed for 150 years. I have to say that the economics of neoliberalism, the rule of the market, the push for deregulation, the doctrine of fiscal austerity and the experiment of privatisation are what has led, in the end, to the threat to those jobs in Springburn.

Today’s debate is about Parliament reasserting itself: it is a declaration of intent that the economy not be left to the market, and that we will not stand by while working people are exploited and cast aside. It is a rejection of the creed that the economy is nothing to do with Parliament and politics: it is everything to do with Parliament and politics. This Parliament is nothing if it does not side with the working people whom we represent.

I do not believe that the answer to the crisis in our economy is to be found in nationalism—either Scottish or British. We say to the Scottish National Party that, of course, Brexit represents a major immediate threat to our economy. The reason why many of us not only voted for remain but campaigned for it in 2016 was precisely the big economic shock that withdrawal would bring. It is why we have argued for a customs union with the European Union, for a close economic relationship with access to the single market, and for a commitment to maintenance of worker’s rights, consumer rights and environmental rights. It is why, all along the line, we have implacably opposed a no-deal Brexit.

However, the damage that is posed to the Scottish economy by the threat of independence, about which the First Minister was tweeting just this morning and held a press conference just this afternoon, and the prospectus of the sustainable growth commission, which she was not tweeting about and which the Cabinet Secretary for Finance, Economy and Fair Work sat on, is a far worse threat. Therefore, we will not support the SNP amendment.

Photo of John Mason John Mason Scottish National Party

Apart from the bit about nationalism, I agree with a lot of what Richard Leonard has said. If his attack is on neoliberalism, does he not think that Scotland might be healthier and might have less neoliberalism if we were independent?

Photo of Richard Leonard Richard Leonard Labour

The member should look at the growth commission report. It is a recipe for neoliberalism and further austerity.

Neither will we support the Tory amendment, which advocates the very neoliberal, small-state, free-market economics that created the crisis in the first place, and which is now discredited—not least in the eyes of the people.

The existing imbalance of power in our economy will not be addressed by nationalism, which would simply leave economic relations—and, so, power relations—unreformed. Simply transferring power from one Parliament to another or from one group of politicians to another, whether from Strasbourg and Brussels to London or from London to Edinburgh, will not address the real democratic deficit that exists.

People need more than a vote; they need a voice. That is why for us the answer is to be found first and foremost not in national sovereignty, but in popular sovereignty.

It is not enough to denounce the existing system, either. We have to give people hope. To do nothing is to be complicit in the injustices that we have witnessed in recent weeks. We firmly reject the doctrine of inevitable decline; rather, we need to invest in a modernised industrial base and we need to invest in the workforce to innovate in it and to run it, as well.

Let me be clear. The Scottish Labour Party is not simply calling for a Keynesian-style reflation of the old economy, or asking to

“take the tears out of capitalism”,—[

Official Report

, 1 June 2017; c 61.]

as somebody once said. We are calling for a wholly new approach that is based on popular democracy and workers’ rights, on sustainable development, and on a social as well as an economic purpose. We are calling for an approach to the economy in which the needs of all will count for more than the profits of the few, and in which there is nothing wrong with running industries and services in line with the wider national interest, rather than in the narrow shareholder interest.

It is a transformative change that we are after—change in which we build for full employment, that is investment led, in which we close production and productivity gaps, in which we secure an industrial renaissance that is ecologically sustainable, and with a new investment bank that looks beyond the market and opens up the prospect of public planning. The argument is not about whether we can afford to make the change; it is about a realisation that we cannot afford not to. It is about new ideas, but old ideals, as well.

We are proud of the fact that we are a Labour Party that stands firm with the trade union movement—a Labour Party that is proud of its past, but which is building for a future. We want Scotland—the home of Robert Owen and the birthplace of the Fenwick weavers—to be the co-operative wellspring of democratic ownership and to become the Mondragon Corporation of the north. A report by the New Economics Foundation, entitled “Co-operatives Unleashed”, shows the urgency of the situation.

With that ambition must come investment, but accountability must also come. It is welcome that, last August, the Scottish Government announced that it was setting up a new group to increase employee ownership in Scotland from about 100 to 500 businesses, but it is hugely disappointing that it was given only £75,000 to do it. We know that that is symptomatic of a wider level of mediocrity and malaise in the landscape of industrial development support in Scotland.

Since 2007, Scottish Enterprise has awarded £222 million in regional selective assistance grants. Just £140 million of that has been awarded to Scottish-owned firms. We know, because it is a matter of public record, that Michelin Tyre plc received £4.5 million in regional selective assistance, 2 Sisters Food Group in Cambuslang received £0.5 million and Kaiam in Livingston received £850,000.

There is a wider point to be made about what that bias in grant awards means. It has not challenged, but has entrenched even further the branch-plant model of the Scottish economy, with the result that, according to the Scottish Government’s own statistics, overseas-owned firms now generate a third of all turnover in the Scottish economy. In manufacturing industries, at which much of regional selective assistance is targeted, nearly half of all turnover is now in firms that are owned overseas.

We want a rebalancing of the economy. We want a more mixed economy. That means that Gemini Rail Services UK, which for decades was in public ownership, should be considered once again for public ownership, when we return the railways back to public ownership. It means that Healthcare Environmental Services, which has grown as a result of public sector contracts, largely in the national health service, should be insourced, not outsourced. It also means that we should, with companies that seek RSA grants, or which will in the future seek Scottish national investment bank loans or equity stakes, be entering agreements that include not just job guarantees but investment guarantees.

The Deputy Presiding Officer:

Mr Leonard is in his final minute.

Photo of Richard Leonard Richard Leonard Labour

Here is another radical idea: all workers should be given a statutory preferential right to buy the enterprise that they work for when it is put up for sale or faces closure. If Parliament can back land reform, it can also back industrial reform.

Parliament and the Government have a choice. We can go on as we are or we can take a more radical direction. Ownership is power. We can extend democracy in the economy, we can liberate people at work and we can make a real change. That is what people are crying out for, that is what the Parliament needs to do and that is what the Labour Party will continue to argue and campaign for.

I move,

That the Parliament expresses its solidarity with the people and communities who have suffered as a result of recent workplace closures, including those at sites in Cambuslang, Dingwall, Dumfries and Galloway, Dundee, Livingston and Shotts; believes that Scotland’s future economy needs to be rebalanced with an industrial strategy to promote indigenous business development and to grow a more diverse economy that puts the interests of employees and their communities at its heart, and calls on the Scottish Government to increase support for growing public, co-operative and employee ownership models.

Photo of Derek Mackay Derek Mackay Scottish National Party

I am genuinely pleased to speak in today’s debate on Scotland’s future economy, which follows on from yesterday’s pertinent debate on a just transition to a carbon-neutral economy. I am grateful to Richard Leonard for lodging his motion so that we can consider our efforts on the economy and the important matter of jobs. Across the chamber, we all agree that Scotland has huge economic potential and we all support fairness and quality employment.

Richard Leonard believes that Scotland’s future economy needs an industrial strategy. I say that we already have one—it is focused on the strong, vibrant and diverse economy that is necessary to support quality jobs and strong, resilient regional economies.

Photo of Claudia Beamish Claudia Beamish Labour

As my colleague Richard Leonard highlighted, regional selective assistance is focused heavily on foreign-owned rather than indigenous firms. Why is that? Is there any way in which the Scottish Government could address that quickly?

Photo of Derek Mackay Derek Mackay Scottish National Party

I am genuinely trying to make the debate as consensual as possible, because I think that there is a lot of agreement on what we want to achieve for the economy. I am making a genuine attempt to ensure that we reach a consensus.

The simple answer is that we are bound by some legal impediments with regard to how we can direct financial support; I am referring to state-aid rules and so forth. Do I want to support indigenous companies? Of course I do, but if we take the example of Michelin, which is a foreign-owned company, I do not think that Richard Leonard was suggesting that we should not have supported Michelin to grow, expand and recalibrate. I make the point that, at the same time as we are asked why we do not do more to support companies to provide quality jobs, we are challenged on why we support certain foreign-owned companies to grow. Do we want to do more domestically? Yes, we do. Do we want to do more on the just transition to a carbon-neutral economy, which we debated yesterday? Yes, we do. We are recalibrating the enterprise agencies’ work on upskilling and upscaling domestic and indigenous companies. I am very focused on targeting our financial support on that, and I hope that that reassures Claudia Beamish.

The Government is working to create the conditions for greater and more inclusive economic growth, to raise the standard of living and to better fund our public services. It is right for the Parliament to reassert itself but, over recent times, we have taken action in relation to individual industrial and commercial difficulties. At last week’s meeting of the Economy, Energy and Fair Work Committee, at which I, too, gave evidence, the Minister for Business, Fair Work and Skills, Jamie Hepburn, covered in detail the work that we are doing in relation to some of the companies that Richard Leonard mentioned.

As we might expect, the leader of the Labour Party seeks to abolish capitalism as he sees it, but I have to say that the Scottish Parliament is a wee bit constricted in what it can do from the point of view of macroeconomic policy and the economic model. [

Interruption

.] Murdo Fraser says that that is just as well. When it comes to macroeconomic policy, we are largely bound by Westminster decisions, but we are doing what we can to support an economic strategy that sets out our vision for sustainable and inclusive growth that boosts competitiveness while tackling inequalities and that delivers for our communities, the environment, workers and business.

The economic action plan, which was launched last year, reinforces the vision that we have set out. Examples of the financial investment that we are making to achieve that vision include city region deals, which focus on tackling inequality and supporting those regional economies. So far, we have committed more than £1 billion of investment through the deals across Scotland, and that significant injection of investment to accelerate inclusive economic growth can deliver tangible benefit in the form of jobs and new opportunities for businesses in growth areas to expand in an inclusive way. That is why my amendment refers to the growth deals and demands that the UK Government matches the funding to which the Scottish Government has committed.

In addition to their direct impact, the deals have been the catalyst for the development of the regional economic partnerships that are evolving across Scotland. The partnerships bring together local authorities, education and skills providers, the third sector and the private sector, and they can be powerful tools for creating the linkages across the economy that drive inclusive growth.

I want to refer to some of the current economic indicators to show where we are right now. The unemployment rate sits at 3.8 per cent, which is the joint lowest rate on record and lower than that of the United Kingdom, and our productivity growth has been higher than that in any other country or region of the UK, including London, since 2007—in other words, over the period of this Government. Yes, we want more employee ownership, and we made commitments in that respect in the programme for government. I would also point out that we have had five consecutive quarters of growth in gross domestic product, but that is being challenged by the Brexit chaos that the UK Government has brought upon us.

I have heard what Richard Leonard has said very clearly. Many workers in Cambuslang, Dingwall, Dumfries, Dundee, Livingston and Shotts will take little comfort from the success that is being shown in those economic indicators, and I am absolutely mindful of the fact that those workers are being affected. The Government is putting in place support, with the involvement of partnership action for continuing employment, where that is required. Some companies volunteer to the Scottish Government the fact that they are in financial difficulties, but some do not—

Photo of Derek Mackay Derek Mackay Scottish National Party

No, I want to make progress. I have not much time left, and I want to say a few more things.

Where we can take action, we have done so, as I think that I have been able to show in a number of areas. PACE gets involved when there are redundancy issues, and we try to find the people involved alternative employment. However, we must not forget the example of Michelin in Dundee, which I have already mentioned. That involved a partnership approach that brought together key politicians, the local authority, the company itself and—crucially—the trade unions to ensure that we got the best possible outcome for the site and its workers. It will lead to future growth opportunities with quality employment and innovation that will make a difference to, for example, remanufacturing, recycling and low-carbon transport. It supports the ambitions that we have laid out in recent debates and the workers in what has been a very difficult time.

Of course, each company is different. At this point, I want to mention the biggest threat to our economy right now, and it is significant and real.

Photo of Derek Mackay Derek Mackay Scottish National Party

I think that I am in my last minute.

The Deputy Presiding Officer:

He is indeed, Ms Marra.

Photo of Derek Mackay Derek Mackay Scottish National Party

I just want to say a word about Brexit. The Government’s amendment refers to it because leaving the European Union and taking us out of the single market against our interest will place Scotland at a competitive disadvantage. This debate is focused on business, and it is not unreasonable to expect the UK Government to set out urgently and clearly its plans for supporting the economy and businesses as they face the Brexit challenge. I will set out the further support that we as a Government can deliver, but the chaos that has been created by the UK Government needs to be addressed.

We want Scotland to be the best place to live, work and invest in, and the Government is absolutely committed to that through our economic action plan and economic strategy. We will intervene where we can if there is any way in which we can support companies and the workforce, and, like Richard Leonard, we have a desire to see more employee-owned companies.

Scotland has huge economic potential. We want to work together to unlock it in the interests of all the people of Scotland.

I move amendment S5M-15390.3, to insert at end:

“; urges the UK Government to support Scottish industry by providing an additional £388 million to match the Scottish Government’s commitment of £1,584 million to deals and additional investments in city regions; recognises that the biggest threat to Scotland’s economy, including its industrial sector, is leaving the EU, and calls on the UK Government to rule out a no deal Brexit.”

Photo of Dean Lockhart Dean Lockhart Conservative

The fiscal framework now means that the size of the Scottish Government’s budget will largely be determined by the performance of Scotland’s economy relative to that in the rest of the UK. Over the past 11 years under the Scottish National Party, Scottish economic growth has averaged 0.7 per cent; the Fraser of Allander institute has described that as the longest period of low growth in 60 years, and the rate as half that of UK economic growth. The Scottish Fiscal Commission is forecasting another five years of Scotland’s economy underperforming against that in the rest of the UK, which will have a significantly negative impact on the Scottish budget.

There we have it: after 11 years of SNP Government, we have a low-growth, low-productivity, low-wage economy. We have an SNP Government that has failed to meet every one of its own seven economic targets. Scotland is now the highest-taxed part of the UK for workers who earn more than £26,000 and for businesses that are looking to expand. We have the lowest business creation rate in the UK and have seen a series of large-scale business failures—as referred to in Labour’s motion—which shows that the SNP’s enterprise policy is not working.

It does not have to be that way. Scotland’s long-term economic growth rate is above 2 per cent. Conservative members believe that Scottish economic growth can return to that level. However, for that to happen, we need a new direction in economic policy

.

Photo of Dean Lockhart Dean Lockhart Conservative

I will. P erhaps Derek Mackay is about to tell us what his new economy policy will be.

Photo of Derek Mackay Derek Mackay Scottish National Party

Dean Lockhart just mentioned that there is a different path. Will Brexit assist or be a disadvantage to GDP growth?

Photo of Dean Lockhart Dean Lockhart Conservative

Brexit applies to all of the UK, and the economy of the rest of the UK is growing at a far stronger rate than Scotland’s economy. The cabinet secretary should not try to blame Brexit for the Scottish economy’s underperformance for the past 11 years under the SNP.

Photo of Dean Lockhart Dean Lockhart Conservative

I need to make a bit of progress.

We have long argued that the SNP’s economic policy is not fit for purpose.

The Fraser of Allander institute agrees. Late last year, it called on the SNP to change course—

Photo of Dean Lockhart Dean Lockhart Conservative

Let me make a bit of progress.

The Fraser of Allander institute said that it is

“time that the government looked again at its overall approach to economic policy.”

Commenting on Derek Mackay’s so-called economic action plan, the institute asked:

“where is the clarity of purpose ... that underpins what the government is trying to achieve?”

Our amendment to the Labour motion indicates how the Scottish Government can change course on economic policy and deliver the high-paid jobs that everyone wants. The UK industrial strategy is the most far-reaching and ambitious UK economic policy in decades. Under the strategy, £50 billion of funding will be made available for research and development, investment in new technologies and the commercialisation of innovation across the UK.

The strategy makes available a scale of investment for Scotland’s economic development that would not be possible in a stand-alone Scottish economic policy. Investment of scale, additional R and D and global expertise are precisely what many of Scotland’s innovative new industries—including the life science, low-carbon and fintech sectors—need in order to scale up.

According to the Scotch Whisky Association,

“The UK Industrial Strategy presents an opportunity for ... the Scotch Whisky industry to flourish as a flagship manufacturer and exporter.”

Photo of Dean Lockhart Dean Lockhart Conservative

I will give way in a second.

To address Richard Leonard’s concerns about neoliberalism, I note that the

UK industrial strategy is about creating higher-paid jobs; it is not about trickle-down economics.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

If the UK’s approach to R and D policy is so much better than Scotland’s, can Mr Lockhart explain why, in 2017, R and D spend increased by 13.9 per cent in Scotland, but by only 2.9 per cent in the UK as a whole?

Photo of Dean Lockhart Dean Lockhart Conservative

I think that the minister will find that, over the past 11 years, R and D across the UK as a whole has been higher than in Scotland on business research and development.

To fully capitalise on the opportunities under the UK industrial strategy and to create the high-paid jobs that the Scottish economy needs, the Scottish Government should incorporate elements of the UK industrial strategy into its economic policy and work closely with the UK Government to deliver the full benefits.

We have also long argued that increasing the tax gap between Scotland and the rest of the UK will damage the economy. Scotland needs to attract the brightest and the best from around the world. That is important not just to address the skills gap in highly skilled sectors, but to attract more higher-paid workers to strengthen Scotland’s tax base.

The Finance and Constitution Committee heard evidence that, for every 20 new additional-rate taxpayers in Scotland, the Scottish Government would get an extra £1 million in tax revenue. If we could attract 2,000 new additional-rate taxpayers to Scotland, the Scottish Government’s budget would get an extra £100 million in tax revenue per year. However, instead of trying to attract higher-paid workers to Scotland, the SNP is doing exactly the opposite by making Scotland the highest-taxed part of the UK for them. It is time for the SNP to listen to leading organisations such as the Scottish Lifesciences Association and reverse its policy of increasing the tax gap between Scotland and the rest of the UK.

I turn to the array of enterprise and skills policy. Scotland spends £2.5 billion a year on enterprise, which is over 50 per cent more than what the rest of the UK spends. However, business development rates and economic growth in Scotland are lower than they are in the rest of the UK.

Last year, the Parliament agreed to a motion that recognised the problem of the cluttered enterprise landscape. However, instead of streamlining the enterprise landscape, the SNP has created another two quangos: the Enterprise and Skills Strategic Board and the Scottish national investment bank. It is still not clear how those bodies will help to streamline the enterprise landscape. That is why we are calling for the enterprise landscape to be streamlined. That needs real leadership from the Scottish Government, and taxpayers need to see a better return on their investment.

Government policy needs to prepare Scotland for a digital future. The Economy, Energy and Fair Work Committee has heard that only 9 per cent of businesses in Scotland have embedded digital in their business operations, compared with 43 per cent of businesses in other countries. That digital gap presents a massive challenge for companies that are looking to increase their exports. The global export market is increasingly dominated by e-commerce and digital platforms. Scottish businesses will lose out on those trading opportunities if we do not address the digital gap. That is why we are calling for the establishment of a dedicated institute of e-commerce—a specialist public agency in Scotland that would help to move large and small businesses online in order to take advantage of global opportunities in e-commerce and get the Scottish economy ready for a digital future.

I will wrap up. We have heard yet again the cabinet secretary attempt to hide an 11-year economic failure by blaming Brexit. The reality is that the SNP has been in charge of Scotland’s economy for 11 long years and has turned it into a low-growth, low-productivity and low-wage economy. That is why it is time for a new direction in Scotland’s economic policy.

I move amendment S5M-15390.1, to leave out from “believes that” to end and insert:

“notes the economic forecasts of the Scottish Fiscal Commission, which state that Scotland’s economic growth will continue to be subdued over the next five years and will continue to underperform that of the UK; regrets Scottish Government policies that have made Scotland the highest-taxed part of the UK; believes that it is time for a new direction for Scotland’s economy, and calls on the Scottish Government to work together with the UK Government to capitalise on opportunities arising from the UK-wide industrial strategy.”

The Deputy Presiding Officer:

I call Patrick Harvie. You have a strict six minutes.

Photo of Patrick Harvie Patrick Harvie Green

I am grateful for the opportunity to contribute to the debate. In particular, I am grateful that Richard Leonard’s motion gives us all the opportunity to reinforce its opening sentiment in expressing solidarity with those who have been affected by recent announcements on workplace closures and jobs losses. The individuals, their families and their wider communities should be in all our thoughts.

I am pleased that, in opening the debate, Richard Leonard made it clear that the wealth of our economy is created by all of us—by people who work in the economy, and not by some supernatural small subsection of society called “wealth creators” or “entrepreneurs”. It is not only those who own businesses or those who control capital who create the wealth of our economy; all of us do. Furthermore, it is not only those in paid employment who do so. There is a great deal of unpaid work in our society—caring for one another, looking after our communities and volunteering in our communities—and that is critical to creating the wealth of our whole society in the widest sense.

I am also pleased that the motion offers an opportunity for consensus. My amendment, which was not selected, would have added a little. The Liberal Democrats do not have an amendment, so I assume that they are happy with the motion—we will hear about that in a moment.

The Government’s amendment also adds to the motion. If the Labour Party does not support the Government’s amendment and the opportunity for consensus is not taken, I will regret that. I say bluntly to Richard Leonard in the best and—I hope—the most constructive sense that, if the Government’s amendment had raved on about the growth commission, I would have absolutely voted against it. I would have voted against that kind of agenda without hesitation. However, the Government’s amendment does not do that. It talks about extra investment, although perhaps not as much as is justified. I hope that none of us would be unwilling to welcome extra investment if the UK Government were to give it.

The Government’s amendment also talks about ruling out a no-deal Brexit. I hope that the Labour Party agrees with that. I would regret it if we could not unite on that point.

Photo of Neil Findlay Neil Findlay Labour

I do not know whether Mr Harvie was in the chamber for the cabinet secretary’s statement. I made it absolutely clear, as Richard Leonard did in his speech, that we absolutely oppose a no-deal Brexit and that we will never accept it.

Photo of Patrick Harvie Patrick Harvie Green

I am very pleased to hear that and I hope that we can unite around that position by backing the Government’s amendment.

I am always happy to debate the future of the economy. One of the reasons why the green movement and the Green party exist is to offer different ideas about the future of our economy, because we are convinced that the current extractive, exploitative, fossil fuel-powered and growth-dependent economic model that is dominant in the world has given us a legacy of environmental crisis and inequality. Our approach to that, and to the case for an industrial strategy, was largely set out in yesterday’s debate on just transition. The work that we have done, including our report “Jobs in Scotland’s New Economy”, shows that there is a huge opportunity to create high-value, lasting and genuinely sustainable employment in the industries that can replace the fossil fuel industries. However, we will not see the change take place if we do not recognise the change that is coming.

I will make a comparison between the approach to the fossil fuel industries as they exist in Scotland and, although on a smaller scale, the Longannet power station. For years, we all knew that Longannet was coming to the end of its life. The Government knew it, the local council knew it, the owners and operators of the plant knew it and the workforce knew it. Everybody knew that the plant was coming to the end of its life, but for the most part people buried their heads in the sand and said that they were fully committed to the long-term operation of the plant.

The last 10 years of the plant’s operation should have been dedicated to generating investment in the local area to replace that economic activity.

Photo of Patrick Harvie Patrick Harvie Green

I will do so in a moment.

We are in danger of seeing the same failure to invest on a much bigger scale in relation to the North Sea. The oil and gas industry cannot last in its current form—at least, not on its current scale. It is not the future of our economy and we can make the case for investment in something new—something that can be genuinely sustainable—only if we recognise the change that is coming.

Photo of Rachael Hamilton Rachael Hamilton Conservative

I am interested in Patrick Harvie’s comments on jobs that are reliant on fossil fuel energy production. Going forward, we will be looking at new forms of energy, and I wonder if the Green party has any solutions or suggestions for job recreation, if fewer jobs will be created in the fossil fuel industry.

Photo of Patrick Harvie Patrick Harvie Green

Yes, indeed. I will happily send the member a link to the various reports that we have published on that subject over the years.

I will set out the case for local energy companies as an example. If every local authority in Scotland had the opportunity to create its own local energy company, perhaps in concert with housing associations or other community bodies, such as local development trusts, there would be a huge opportunity to turn more of the energy industry’s economic activity into public investment in the built environment and other areas.

I will make one more point—I know that we are tight for time, Presiding Officer. Brexit is a profound threat—indeed, not only Brexit, but the loss of freedom of movement, which is an historic political achievement that is about empowering people in the economy. I hope that, in his closing speech, Richard Leonard will take the chance to agree that we must not return to the idea of an economy in which capital is more free to move than people are. If his party is committed to that, will he continue to back the principle of freedom of movement, whatever the outcome of the Brexit shambles that we are seeing down south?

Photo of Willie Rennie Willie Rennie Liberal Democrat

We are living at an incredible moment. I agree with the SNP amendment, that Brexit is the biggest threat to our economy, to our cost of living and to our way of life. Breaking from Europe would be damaging and I say to the Labour members who are still in the chamber, that means any form of Brexit, not just a no-deal Brexit. A no-deal Brexit would be damaging, but so, too, would any form of Brexit. Breaking from the UK by way of independence—if we ever agree to it—would be equally damaging, if not more so. We should learn the lessons from Brexit and reject independence, too.

Yes, the Scottish economy is stuttering. Yes, there is a real need to address both the job losses at the specific locations across Scotland that are mentioned in the Labour motion and the pain that those losses cause individuals and families. Yes, city deals are part of the solution. We agree that the UK Government sh ould contribute more to the city deals. The difference between what the Scottish Government is contributing and what the UK Government is contributing is £388 million.

Nick Clegg was the driver behind city deals during the coalition days. I remember that period of politics and wish that we could return to that calm period with Nick Clegg. It is reasonable for me to point out that the one deal that happened before the 2015 election—the Glasgow city deal—saw a broadly equal level of funding from the two Governments. The Conservatives should have stuck to that wise Liberal Democrat approach from the Nick Clegg days.

Today, I want to talk about an issue that does not affect just our economy and way of life, but will affect countries across the world. We are in the midst of a technological age that is transforming the world around us at a pace that we have never seen before.

The internet has fundamentally changed almost every aspect of our lives—how we work, shop and relate to one another. Advances in robotics and artificial intelligence are creating possibilities that, just a few short years ago, were in the realm of science fiction.

However, with the age of the internet, every great liberating advance that is produced throws up new problems, and new risks. Constant technological advances in automation and artificial intelligence threaten many traditional jobs, in manufacturing, retail, transport and professional services.

Over the next 15 years, almost one in every three current jobs in Britain could be automated. That will affect 10 million people. What will we say to the truck driver whose job is a thing of the past; to the shop assistant laid off as robots fill the gap; or to the paralegal or auditor whose knowledge and analysis is no match for the algorithm?

Machines still have limits, and will continue to do so. They cannot empathise or accurately mimic the full complexity of human interaction. Increasingly, that will be what separates us from them. Our very humanity will be more precious than ever.

For example, our ageing population requires a growing care sector. Care work should no longer be dismissed as low paid and unskilled. Instead, we need a care revolution, to place care-giving where it belongs, as a vital and hugely valued part of our society, with well-paid staff who are recognised for the significant skills that they bring.

I believe that we should welcome the advent of new technologies and the opportunities that they bring, but we must anticipate that people without adaptable skills could be hurt badly. One of the answers must be a massive investment in education, skills training and retraining.

New technologies can create high-skilled, well-paid jobs, or turn us into minimum-wage drones. Search for a list of potential new jobs and the roles sound like something straight out of a sci-fi novel: cyber city analyst, man-machine team manager, personal data broker.

There are stories of faceless algorithms bossing around warehouse staff to meet next-day delivery targets, and workers who avoid drinking water so that they do not lose time going to the toilet. Technology is supposed to make work better; it is not supposed to turn us into machines. We must ensure, too, that the proceeds of that progress are not hoarded by the rich and powerful, but shared to create a fair and just society.

The Government must start planning for that future. This is not a time for incremental change. That is why my party has established a technology and artificial intelligence commission to explore how we can make the most of the possibilities that this revolution brings, and to ensure that all of us can benefit from them. The commission is being led by Dr Sue Black, who led the campaign to save Bletchley Park.

The advances in robotics and artificial intelligence will help us to do things that many of us have committed to over generations, on education, transport, poverty, health, care and more, but we must plan, address the challenges that come with that progress and ensure that we all share the proceeds of that change.

The Deputy Presiding Officer:

We move to the open debate. I warn members that we are very short of time, so I ask for strict timings of six minutes, unless otherwise agreed.

Photo of Jenny Marra Jenny Marra Labour

My city of Dundee knows all too well the pain of factory closures and job losses. When globalisation was a new phenomenon, Dundee was at the forefront of it, with the bitter and heartbreaking closure of the Timex factory. Ten years later, the Levi Strauss & Co factory closed its doors, and NCR has gone from employing 6,000 people, including members of my family, to employing 500 today.

Now, the Michelin factory is due to close. At the start of November, Michelin announced that it would end production in Dundee by 2020, with the loss of 845 highly skilled, well-paying jobs and the closure of Dundee’s last large-scale manufacturing plant. The cabinet secretary knows that it was known in the city for years that Michelin owed its survival in a difficult global market to having a productive workforce and a stellar relationship between the trade union and management. However, that was not enough for Michelin to survive today’s environment. We have again seen the flight of capital from our city, and we have the awful knowledge of the impact that that will have on our community.

Just this morning, I visited Her Majesty’s Revenue and Customs offices in Dundee, which are due to close in 2022, with the loss of another 300 jobs. People have planned their lives and families, taken finance on their homes and planned holidays on the basis of expected income and security. During my visit to the HMRC offices, I heard of staff who are married to staff at Michelin, both of whom are expected to lose their jobs in the next two to three years.

As well as the devastating impact on existing workers, the further critical consideration for us, as politicians, is that children who are leaving school and college will have fewer opportunities in the community. If there were only the 850 fewer opportunities at Michelin, that would be bad enough, but I have described some historical closures and the tally of job losses has made the situation much worse for families.

In 2016, I fought unsuccessfully alongside the 115 Flint Group workers to save their plant. A group of workers wanted to buy their plant, as Richard Leonard suggested, but that option was closed to them. In the same year, PressureFab Group Ltd closed, with the loss of 42 jobs. The previous year, Muirfield Contracts shut, with 284 construction workers being made redundant. More job losses in the games sector in Dundee have been announced just this week.

People generally feel more secure in public sector jobs, but that is not the case in Dundee today. There will be 300 job losses at HMRC, and Dundee City Council is expected to make approximately 400 council workers redundant as a result of the SNP’s terrible budget settlement for local government. We now know that NHS Tayside is planning for 1,300 fewer posts over the next few years. Fewer members of staff will never solve NHS Tayside’s well-documented problems, and the politicians who run the Government in Scotland should know that.

I say to Derek Mackay that we cannot go on like this. His Government is adding insult to injury with public sector job cuts. The cabinet secretary will remember that, at the end of November, he admitted to me at a meeting in Dundee that the Government has no economic plan for the city of Dundee. It has supported the waterfront development and put in place a steering group for Michelin, but we need a much wider economic plan for Dundee, where—I hesitate to say this—work is fast becoming a privilege rather than an expectation. That is why the Labour motion is so important. Our politics were founded on the basis that the right to work gives people dignity and brings hope and security. The constitutional debates are clearly critical for the economic conditions that such change creates, but we must not take our eyes off what can be done here and now in Scotland to create a better economy.

The Deputy Presiding Officer:

Ms Marra is just closing.

Photo of Jenny Marra Jenny Marra Labour

I say to the cabinet secretary that we need a proper economic strategy—one that is specifically for Dundee. We have terrible employment figures: we have the lowest male employment rate in Scotland and the highest proportion of males in part-time work. He knows that where there is joblessness, there is poverty and all its associated problems. I would like him to commit, today, to a proper plan for Dundee.

Photo of Jenny Marra Jenny Marra Labour

I was not allowed to take the intervention, but I am sure that the minister will give me that commitment in his closing speech.

Photo of Angela Constance Angela Constance Scottish National Party

Like other members, I am grateful for the opportunity to express my solidarity with all the people who have lost their jobs in Scotland in recent weeks.

I represent the constituency in which I grew up, and I have spoken before about how unemployment marked my upbringing. Whenever there are job losses in my constituency—most recently at Kaiam Europe—it feels as though a scab is being picked or a sore spot is being poked.

Like many members, over the years I have been involved in supporting and representing many people who have lost their jobs. Despite that, it is hard to find the words to express the experience of being present at the meeting on Christmas eve at which Kaiam’s administrator, KPMG, broke the news to more than 300 workers that they were being made redundant without notice or pay. Despite the difficulty and distress of that meeting, I was struck by the dignity of the workforce, who should never have had to endure such treatment.

We should not forget that work is part of our purpose in life and our identity, as well as being how we make a living. The creation of meaningful employment is the most important social policy. The cabinet secretary has rightly made that point on a number of occasions.

I take the opportunity again to pay tribute to the wider West Lothian community for rallying round the Kaiam workforce. On the let’s help Kaiam employees Facebook page, for example, people are posting job vacancies, offering to help with curriculum vitae and working on donations and fundraising.

The Kaiam experience reminds us that there are lessons that we really need to start learning. Our economic strategy needs to be smarter at getting the right balance and the right connections between the local, the national and the international. Globalisation is not new; it is not the discovery of our generation. We need only look at the history of the silk roads to understand that.

Time and time again in West Lothian, public money has been invested in large, often international, companies that have upped sticks at some point later. I want the Scottish Government and Scottish Enterprise to continue to invest wisely in West Lothian, and I recognise that we can only ever reduce risk and that we can never remove it entirely; but our actions and investments must always seek to anchor high-quality jobs in our communities and must be informed by a forensic understanding of the nature of any business and sector and the interplay between local, national and international issues. Kaiam, for example, was dependent on business from big data companies such as Google, Amazon and Facebook and was operating in a highly competitive market, with stiff competition from China.

Kaiam did not just shaft its workforce; it cheated small supply-chain companies out of payments, too. We must scrutinise how Scottish Enterprise and others detect the early warning signs of financial difficulties in companies, particularly the ones that they account manage. Kaiam had a history of late laying of accounts and had not made a profit since 2012. It also had a history of laying off staff.

We know that 95 per cent of companies in this country are small to medium sized. If we truly believe in diversifying the economy and not putting all our eggs in one basket, we need stronger, earlier outreach and support for smaller enterprises of all shapes and sizes, across all sectors, from the grass roots up. Next week’s debate on regional economic partnerships and city deals will be timely.

We need a broad-based economic strategy, which has inclusive growth at its heart. The Government and its agencies should be more assertive and—dare I say—more aggressive about the business pledge and the fair work agenda.

Time is short, so I cannot bear to talk about Brexit.

We look forward to the day when more economic and financial powers—in particular, powers on the national minimum wage—are returned to Scotland.

The lightning rod of our economy should be about tackling inequality, supporting job creators large and small, being serious about diversity in the workforce and diversification in our economy and getting out and about, to widen our horizons beyond the sterile Scotland-versus-the-rest-of-the-UK economic comparators—perhaps along those silk roads.

The Deputy Presiding Officer:

I thank Ms Constance for her brevity and remind members that speeches should be six minutes, unless previously agreed.

Photo of Rachael Hamilton Rachael Hamilton Conservative

I refer members to my entry in the register of members’ interests.

Businesses are the backbone of our economy in Scotland and, indeed, in my Borders constituency. In recent times, we have seen significant job losses and business closures across the region.

Economic mismanagement is at the heart of today’s debate and, for a decade, we have seen the SNP’s fiscal incompetence hit businesses and, in turn, jobs. Scotland’s economic growth forecast is lower than the UK’s, as my colleague Dean Lockhart said; Scotland’s economy is growing at half the rate of the economy in the rest of the UK; and business investment in Scotland is at a lower level than in 2014.

Photo of Rachael Hamilton Rachael Hamilton Conservative

I will do so in a second.

As Angela Constance said, this is not about comparisons with the UK, but I hope that we can get to the point where we are as successful as the rest of the UK is.

Photo of John Mason John Mason Scottish National Party

Does the member accept that at least some of the responsibility for the economy might lie with the Westminster Government?

Photo of Rachael Hamilton Rachael Hamilton Conservative

I would say that perhaps now is the time to consider getting involved in the UK Government’s industrial strategy. It contains a long-term ambition to tackle productivity and the current low-wage economy, which hits families hard.

On the Conservative benches, we all know that one does not grow the economy by hiking up the tax on businesses. Unfortunately, under the SNP, we have seen just that. Whether it is on the high street or on the factory floor, the SNP's assault on business has meant that ordinary hard-working people have lost their jobs and that, in some cases, trading has ceased altogether.

A cacophony of higher taxes—whether the large business supplement or higher income tax—combined with an obsession with independence, has damaged business investment and expansion in Scotland. That is regrettable.

The constituency that I represent—Ettrick, Roxburgh and Berwickshire—has seen its fair share of job losses and workplace closures of late, and that is mirrored across Scotland. Recently we have seen the coat hanger manufacturer Mainetti, in Jedburgh, suffer.

Photo of Rachael Hamilton Rachael Hamilton Conservative

Can I finish the bit about Mainetti please?

Mainetti employs more than 350 staff in Jedburgh. Before Christmas, the company saw 50 jobs cut due to a restructuring programme, which is fair enough, although the situation seems to be mirrored across Scotland, as I have said. However, 50 job losses in a small town such as Jedburgh is significant and the situation was—and still is—distressing for families, friends and all those involved.

Back in 2017, Mainetti made a loss of £561,000 and, this year, they are forecast to make a loss again. I will take the intervention and discuss afterwards how Jim Hutchison believes that has happened.

Photo of Derek Mackay Derek Mackay Scottish National Party

I thank Rachael Hamilton for referencing the economic indicators and the responsibility of the Scottish Government. What does she have to say about the fact that unemployment in Scotland is lower than in the rest of the United Kingdom? It is at a record low level.

Photo of Rachael Hamilton Rachael Hamilton Conservative

I congratulate the Scottish Government on that figure but, since 2010, productivity has been low and the security of jobs and the number of hours that people are working are low. We need to make sure that people have future job security.

I was talking about Mainetti’s troubles. The managing director of Mainetti, Jim Hutchison, could not have been clearer when he said:

“The business is faced with an ever-increasing cost base, with increases to the national minimum wage, higher electricity costs and higher business rates.”

Here, we can look at the things that are the responsibility of the Scottish Government, and the large business supplement has been detrimental to business expansion in the Borders and is now causing firms to cut jobs. Recent analysis has shown that over 320 large businesses in the Borders will fork out over £1.4 million in the upcoming financial year because of the SNP’s large business supplement, while some 10 miles over the border, in England, we see a different picture, with lower rates.

The SNP was warned about such disparity: its Barclay review recommended that the competitive disadvantage caused by the large business supplement should be ended. Jedburgh and Kelso are beautiful places that are wonderful to live and work in, but why would a large business want to trade there if, by relocating to Berwick, it could turn a larger profit, employ more local people and have the opportunity to invest further in its business? We know that policies drive behavioural change. At the moment, when it comes to business rates for large businesses, Scotland is uncompetitive and discouraging. Something could be done about that; Derek Mackay could sort it out.

However, the large business supplement is only one part of the story. The anti-business environment that has been created is evident in the recent start-up figures, highlighted in the

Sunday Times

, which show sharp increases in company formations in other major cities, in the rest of the UK, but tell a different story in Glasgow and Edinburgh: Glasgow saw 4.3 per cent fewer start-ups compared with 2017 figures; and the figures for Edinburgh were worse—they were down by 6.5 per cent.

Presiding Officer, I took two interventions. Will I get back my time for that?

The Deputy Presiding Officer:

No, I have no spare time.

Photo of Rachael Hamilton Rachael Hamilton Conservative

In that case, I come to my conclusion.

The SNP is hitting businesses with higher taxes and that has a consequence: fewer jobs and fewer business start-ups. There is also a lack of focus on supporting mature, job-creating companies. As Labour’s motion highlights, that is where we need to see the focus because, somehow, mature companies are falling off the radar.

Photo of Sandra White Sandra White Scottish National Party

I have been looking forward to this debate. It is unfortunate that Richard Leonard chose to use provocative words; I will give him a couple of lessons in that respect. It seems to me as though everybody is seen as a basket case apart from the UK and the union. The most successful countries in the world are Luxembourg, Norway, Ireland, Switzerland, the Netherlands and Sweden. Those are all small, independent countries, Mr Leonard. It is about time that people learned that we do not have all the levers. I wish that we had.

I did not want to react like that—I am sorry—but it is time that people learned that having only 59 MPs representing them out of 650 MPs at Westminster means that the democratic playing field is not level.

I have said what I want to say on that matter, and I thank the Presiding Officer for bearing with me.

On the Labour Party’s motion, I have been a shop steward and a trade unionist, so “solidarity” is not a strange word to me; the Labour Party does not own that word. I absolutely express

“solidarity with the people and communities who have suffered as a result of recent workplace closures”.

I am concerned about the many people who are unsure and worrying about their jobs and the future, and my concern goes beyond the areas that are mentioned in the motion.

In particular, I am thinking of two huge companies that are based in my constituency. One is HMV. People are worried; they do not know what will happen and they are in limbo. The other is Debenhams. People are worried about that, too. I am thinking particularly about those companies, but I am also thinking about all the others where people are uncertain about their future. I will come on to speak about Brexit, which is certainly making the future uncertain.

I welcome the Scottish Government’s calls in its amendment—others might have called for this too—for the UK Government to provide additional funding

“to match the Scottish Government’s commitment of £1,584 million to city region deals”.

It goes without saying that leaving the EU with a no-deal Brexit will have catastrophic results for Scotland and our economy. The Scotland branch office of the Federation of Small Businesses is in my constituency—I really do thank the FSB for the work that it does. Glasgow Kelvin has one of the highest percentages of SMEs, many of which use local produce in their products and many of which export their products and import parts and ingredients for those products.

On small business Saturday, I visited a number of SMEs in my constituency, as other MSPs did in their constituencies. Brexit loomed large in some of their questions, and concerns were expressed about importing and exporting, the exchange rate, tourism and the eventual viability of their businesses as a whole. It is important that we continue to support and grow our SMEs. They are the backbone and lifeblood of our communities; they are a huge part of our economy and the future. I think that everybody would agree with that.

In the time that I have left, I want to comment on the Fraser of Allander institute’s report entitled “Brexit and the Glasgow City Region”. Before I do so, however, I should say to the Conservative Party that the report says:

“Growth is projected to continue in the Scottish economy this year and next. But should a ‘no-deal’ outcome become an eventuality, then growth is likely to slow sharply.”

That is a lesson, and the Conservatives should not quote various other issues to me when they cannot quote the absolute truth as well.

The report is about Glasgow and what will happen if a no-deal Brexit comes about. It says:

“As a major European city, with a diverse business base, the Glasgow City Region economy cannot expect to be immune from the impact of Brexit.”

It goes on to say:

“Over the years, Glasgow City Region has often punched above its weight in attracting international investment ... Public services also rely upon EU workers to help deliver the care and support that we depend upon ... The City of Glasgow was ranked 6th in the UK in terms of international investment projects gained in 2017 ... There are over 700 EU owned enterprises in Glasgow City region, employing over 46,000 staff.”

So, in contrast to Rachael Hamilton’s saying that their numbers have dropped, SMEs in Glasgow are really booming. However, if Brexit comes about, the big worry is what will happen to people from the EU—the workers and also EU nationals who own such businesses. That is a huge worry in certain areas—and particularly in my area of Glasgow—and probably throughout Scotland.

I do not mind talking about my own area and my own constituency, so I point out that the report says that

“Glasgow City Region is crucial to Scotland’s economy” and goes on to say:

“Glasgow City alone is estimated to have contributed over £20 billion worth of GVA in 2016—over 15% of Scotland’s economic output.”

What could we do if we had the full powers and levers of an independent country? Much more than we can do while we are shackled to what I can only call the basket case of the UK as it stands just now and which will become even worse with Brexit.

I ask once again whether Richard Leonard will support the SNP’s amendment. It is rather sad that he comes to the chamber with a very good motion but divides it like that.

I am now being told to be quiet, so I will conclude there.

Photo of Neil Findlay Neil Findlay Labour

I begin by echoing Angela Constance’s very sensible call to end the banal comparison between Scottish statistics and UK ones. That means absolutely nothing to the workers at Kaiam, Michelin, Healthcare Environmental Services Ltd, Carillion, Gemini Rail Services UK, Spark Energy, Debenhams, HMV, Aulds, Homebase, House of Fraser, Marks and Spencer, STV, Burntisland Fabrications Ltd and Macdonald Hotels—just a few of the companies that have announced closures or significant job losses.

We should not forget that, since 2009, more than 30,000 jobs have been lost in councils alone—the equivalent of a Kaiam a week for 100 weeks. That is the extent of the situation not in the public sector as a whole, but just in councils.

All of that has caused uncertainty, fear and worry for those who remain in employment, as pay is cut in real terms; hours are cut or, at times, increased with no financial reward; and terms and conditions are attacked. That is not good for our economy and society, for people’s wellbeing or for social cohesion.

I was alerted to the situation at Kaiam by a pal of mine who worked at the factory. Quickly thereafter, I received phone calls and emails from staff at the plant who were worried about their future. On the Friday before Christmas, Angela Constance and I met West Lothian Council and Scottish Enterprise to discuss the situation. It was clear then that the company was on the verge of going under. There was an outstanding response to support the workers over that weekend from the community and West Lothian Council, and later from the PACE team and other agencies. On the following Monday, we attended a very busy meeting called by the administrators, at which KPMG advised all workers that their jobs would be lost and that the wages that they were owed on Christmas eve would not be paid. Merry Christmas, indeed.

However, as with much in the corporate world, all was not what it seemed. It soon emerged that, in the previous year, the owner of Kaiam had been involved in the purchase and sale of a business in the north of England, securing what he described as “a windfall” in the process. Rightly, workers are asking where the tens of millions of pounds went.

We know that the company filed its accounts late and that it was threatened with closure by Companies House. At the Economy, Energy and Fair Work Committee yesterday, Scottish Enterprise painted a picture of an improving business and a move to profitability, but staff who worked at the plant have said that, at times, they were sitting around doing nothing and that they regularly asked the company how it was making money when they saw work drying up.

We established that Scottish Enterprise was informed of Kaiam’s troubles on 16 November. Ministers were informed on 22 November, which was more than a month before workers were told that there was no money to pay them. Further, at least one contractor, who I met recently, told us about receiving an order for goods and services on 27 November, which put that contractor out of pocket for a significant sum of money and meant that they have had to make staff redundant. The owner of that business is absolutely furious that they have been put in that position when Scottish Enterprise and the Scottish Government could have helped to avoid that. Instead, workers left that meeting on Christmas eve in tears, with no money.

I find it difficult to comprehend that people simply want to brush aside the fact that Scottish Enterprise and the Scottish ministers knew that the company was in major difficulty, with a serious danger of going under and leaving workers being left unpaid, yet no one thought to alert 300 families of that before Christmas.

Last week, we found out that Government minister Jamie Hepburn did not lift the phone to speak to the company. Minister, if you will not lift the phone to try to save 300 jobs, what will it take for you to act? In the same circumstances, would you do the same again? Will you take the opportunity today to apologise to the workers at Kaiam for your inaction?

The responsibility for the company’s demise lies with the chief executive. However, there is something wrong with a system that hands over public money and allows that to happen. We must have a serious look at how the conditions of grant awards to such companies are managed and enforced, and at the rights of workers to know what is going on in the place where they work and invest their time and effort.

If the recent industrial bad news from Kaiam and elsewhere has taught us anything, it is that we must have an industrial strategy that rebalances our economy. We cannot carry on with the status quo. We need planning, more industrial democracy and greater accountability.

Photo of Christine Grahame Christine Grahame Scottish National Party

I remind members to speak through the chair. I understand why members might use the word “you”, but, as has often been said, they should please speak through the chair.

I call James Dornan, to be followed by Gordon Lindhurst. Time is absolutely tight—not just for you, Mr Dornan, but for everybody.

Photo of James Dornan James Dornan Scottish National Party

There is no doubt that this is an important topic and I am delighted to participate in the debate. I, too, extend my best wishes to the employees affected by recent workplace closures, particularly to those who were made aware of their redundancy during the Christmas period. There is never a good time for someone to lose their job, but that is an especially cruel time of year to do so.

I am under no illusions about the challenges that our economy faces, but there should be recognition that Scotland has recovered comparatively well over the years since the global recession. Our economy has continued to strengthen in the first half of 2018, with annual GDP growth that is the strongest that it has been since 2014 and which is above that of the UK as a whole. Scotland’s labour market also continues to perform strongly, with unemployment numbers falling over the past year and remaining close to record levels.

Scotland has advantages and resources that few nations can match. This SNP Government is committed to building a fairer and more competitive and sustainable economy and, since 2007, it has taken action to support businesses, create jobs and build a more equal country.

Thanks in part to the work of the Scottish Government in encouraging businesses to pay the living wage, as well as to our free access to higher education and our labour market strategies, productivity in Scotland is growing much faster than it is in the UK as a whole, as measured by output per hour worked. Scotland’s best resource has always been its people and SNP policies will continue to support them.

We are assisting our businesses. Scotland’s international exports, which were valued at £29.8 billion in 2016, are up 44 per cent under the SNP. Scotland is the top destination outside of London for foreign direct investment, and we are helping small businesses to expand and create jobs. Thanks to the small business bonus scheme, around 100,000 business premises now pay no rates at all and, to date, small businesses have saved £1.3 billion through the scheme.

We are also standing up for Scottish industry. The Scotland for EO—employee ownership—group has been mentioned. In addition, the Scottish Government has worked to secure futures for Scottish steel, the last remaining aluminium smelter at Lochaber and the Ferguson shipyard, too.

The Scottish Government is taking the steps to help our workers, businesses and industries to grow. Of course, we can always do more to improve the economy, but Scotland does not yet have full control over all the levers to grow the economy. Key powers remain at Westminster: power over tax allowances for business, capital gains tax, corporation tax, employers’ national insurance and tax on dividends and savings, to name but a few. We are trying to run this economy with one hand tied behind our back.

As is shown consistently in polls, the people of Scotland trust MSPs here at Holyrood far more than they trust Westminster to look after their interests. The greater the powers that this Parliament is given, the greater our chance to support our people and our communities. Let us be honest: the public’s lack of confidence in Westminster will only be exacerbated by the carry-on down there over the past few weeks—a carry-on that would have made Sid James and Hattie Jacques blush with embarrassment.

Last night, the Prime Minister lost her Brexit vote, yet, despite the fact that it was obvious to everyone outside the Downing Street bunker that that would be the result, it is clear that she does not have a clue what to do next. It could not be clearer that the main risk faced by Scotland’s economy continues to be the prospect of a hard Brexit. Any Brexit presents a huge threat to jobs, trade, living standards and investment in Scotland, but a Brexit outside the single market could cost Scotland 80,000 jobs over a decade and cost people an average of £2,000 in wages.

All Scotland’s hard work in protecting and improving our economy will be seriously undermined by the Tory Brexit to which we are subject—a Tory Brexit that, it still amazes me, continues to be enabled by Labour. Bear with me, as I read from the

Official Report

“In the wake of the Brexit vote, a survey by the Fraser of Allander institute of 320 firms across Scotland found that 60 per cent believed that the outcome of the EU referendum will have a negative effect on their business and that even more—67 per cent—believed that the uncertainty that it creates is an additional problem. As we all know, the people who suffer most from any business downturn are those working people who are already on the most precarious contracts, who are already the lowest paid, who are in the deepest in-work poverty and who are living from week to week. Those people will be the victims of any economic collapse as a result of Brexit and they are the people the Parliament must speak up for.”—[

Official Report

, 20 September 2016; c 20.]

Those very wise words were from Richard Leonard MSP in 2016. He was right: businesses are weary of Brexit and the losers will be the workers. However, only last week, he refused to confirm whether his party would campaign in a snap election to stay in or out of the European Union. Even worse, last night, Rebecca Long-Bailey confirmed that Labour would campaign to leave the EU in a forthcoming general election.

Given his previous comments, surely it is incumbent on Richard Leonard to back a people’s vote and then ensure that his Scottish Labour colleagues campaign for remain. Labour Party members want him to do that and Scotland wants him to do that, so let us hope that he takes the opportunity. It is clear that the people of Scotland strongly believe that Scotland’s future lies in the EU, as does this Parliament. Of course, we in the SNP believe that Scotland’s future would be best served by being there as an independent nation, which I truly believe will happen before too long. However, in the meantime, I urge Richard Leonard and his colleagues to get behind any move to revisit the most damaging decision that the UK has ever made voluntarily. That way, they really would be protecting Scotland’s future for us all.

Photo of Gordon Lindhurst Gordon Lindhurst Conservative

Other members have spoken about this, but it is important that we emphasise the situation. Just days before Christmas, we learned of the fate of the computer technology firm Kaiam, in West Lothian. As workers across Scotland packed up for the holidays, Kaiam employees were informed en masse that they would not be receiving Christmas wages and told that they would not have jobs to come back to. Whatever beliefs members across the chamber hold about how we run our economy, I am sure that we all agree that the mistreatment of Kaiam workers has been truly shocking in this whole sorry episode. Our immediate thoughts must be with the workers and on how their long-term futures can be secured. It is encouraging to hear of the potential for the company to be purchased as a going concern, with what appear to be more than 20 notes of interest.

However, as well as those immediate tasks, there are clear lessons to be learned for the future of our economy.

In particular, there are lessons about how Government resources can be used more effectively to deliver the sort of growth that is so badly needed in our economy.

During recent meetings of the Economy, Energy and Fair Work Committee, we have had to ask some difficult questions about just how those resources were used in the case of Kaiam. Government financing was intended to bring jobs and grow the economy of Livingston, West Lothian and wider Scotland. However, more than £800,000 later, the company was laying off workers and continues to fail to register a profit. That taxpayers’ money could now be lost to a company whose track record in delivering for Scottish jobs and growth has been sketchy at best. In the interests of the future of our economy, I hope that the due diligence over how these public funds are being used can be reflected on and that lessons can be learned for the future, especially given the sums involved and the jobs that have been lost.

Our best interests are also served by maximising the opportunities that are available to us to succeed in the modern economy. Those opportunities arise from initiatives such as the UK industrial strategy, which identifies and supports areas in which Scotland plays to its strengths and which will be important for the future. Those areas include financial services, life sciences and higher education and research. In those sectors, some of the £1 billion arising from city deal investments will help to deliver the high-quality and diverse jobs that we want. In my region, there has been £300 million-worth of UK Government investment as part of the Edinburgh and south-east deal, which is delivering exciting prospects including major investments that could see the region become the data capital of Europe.

The industrial strategy challenge fund further supports Scottish businesses and researchers, providing, among other elements, a combined £9 million to Heriot-Watt University and the University of Edinburgh, which is used for research into marine offshore infrastructure.

Support is going to a wide variety of worthwhile projects, and funding is being directed to areas in which Scotland already does well. That enables our country to benefit from playing a key role in UK ambitions to be at the forefront of a modern economy in areas such as artificial intelligence and clean growth.

However, as we look forward and consider the future of our economy in a changing world, one thing that remains constant is the importance of our relationship with the rest of the UK. That is important not only with regard to working together on the initiatives that I have outlined but with regard to the importance of that market to our businesses. It is worth nearly four times as much as the EU market is worth to Scotland. Trading across that open border has become the norm for our businesses that export, and 500,000 Scottish jobs remain reliant on that border remaining open and barrier free.

Therefore, rather than sow division within the UK and raise the prospect that that trade could be damaged, the SNP Government should work to maximise the possibilities that being part of the UK market brings. It should take the threat of so-called independence off the table, as it is currently hanging over the heads of businesses for which the UK is the most important export market. By doing that and by working constructively with the rest of the UK to deliver a pro-business environment, Scotland can improve its economic outlook, which currently sees growth at a lower level than in the rest of the UK in the years ahead. I will not go into those figures again, because we have heard about them a number of times already.

We must look ahead optimistically to a positive economic future that we can all work together to secure for Scotland.

Photo of Shona Robison Shona Robison Scottish National Party

I will begin my remarks—as I should—with a well-deserved tribute to the Michelin workforce in my constituency. They are an extraordinary and tenacious group of men and women who, over the years, have overcome many hurdles to keep the Dundee factory open in the face of adversity. The partnership that they have with the management team is a model of good working, which has seen the workforce lead many of the reforms at the plant over the years. I have lost count of the times that I have spoken about Michelin’s positive industrial relations model. Others could take a leaf out of its book.

The response of the Michelin management team stands in marked contrast to that of Healthcare Environmental Services. I recently met with the eight Dundee-based former employees of HES, who have been treated appallingly by the company bosses—there has been no communication and no partnership working, and workers have been left out of pocket with unpaid wages and other entitlements owing. Again, I call for the company to do the right thing and pay the former employees what they are due.

Given the history of strong partnership working at Michelin, it is not surprising that, when the devastating news emerged that Michelin will finally cease tyre production next year, the local management team and the workforce approached that huge challenge in the same spirit, determined to work together to get the best outcome for the workforce and the best legacy for the factory and its site. We all wish that it could have been a different outcome.

The response from the Scottish Government and from the Cabinet Secretary for Finance, Economy and Fair Work, Derek Mackay, has been commendable. The Scottish Government was swift to offer every assistance and to try to persuade Michelin of an alternative course. When that proved impossible, the Scottish Government moved swiftly to establish an action group to examine all the options for retaining tyre production or, if that were not possible, for repurposing the site to secure its long-term economic future.

Those efforts have been recognised by Michelin at the highest level and, unusually for the company, it has agreed to engage with the Scottish Government to ensure that the site can be repurposed and a legacy be created so that there are job opportunities not just for the existing workforce but for the future generations who will need alterative job opportunities to Michelin.

Michelin is working in partnership with the Scottish Government, Scottish Enterprise, Dundee City Council and others to develop the next phase of the company’s presence in Scotland and to transform the site into a key location for new economic opportunities in manufacturing, remanufacturing, recycling and low-carbon transport. It is welcome that Michelin has appointed a senior executive to co-chair the steering group, and we await the group’s proposals, which will emerge in due course. On Monday 17 December, Michelin signed a memorandum of understanding with Scottish Enterprise and Dundee City Council to formalise that commitment.

The £10 million for the Tayside industrial strategy that was announced recently in the Tay cities deal is, of course, welcome. It has, however, always been the case, as Derek Mackay stated, that support for the Michelin plan will need resources beyond that in the Tay cities deal, most of which had already been allocated to projects across Tayside. I was pleased that the First Minister reiterated that commitment as recently as last week at First Minister’s questions, when I asked her to do so. I also reiterate my call for the UK Government to step up to the plate with £50 million that would match the Scottish Government’s contribution, to ensure that Dundee is supported through its manufacturing strategy.

I understand that there has been considerable potential commercial interest from many parties in developing economic opportunities at the Michelin site, and I hope that much of that interest will come to fruition in due course, through the work of the steering group. Our ambition should be that at least as many good, well-paid jobs will be created at the Michelin site as there are at the factory before the final tyres are produced. I believe that that is achievable, but it will require strong leadership, determination and, where necessary, resources deployed strategically to deliver the plan once it is in place.

Photo of Shona Robison Shona Robison Scottish National Party

I hope that we may also retain a political consensus and support for the plan—as, I hope, Jenny Marra will confirm.

Photo of Jenny Marra Jenny Marra Labour

As Shona Robison knows, I have been working closely on the issue and am happy to back solutions for the Michelin plant.

Given the job situation in Dundee, will she confirm her opposition to job losses and redundancies at Dundee City Council?

Photo of Shona Robison Shona Robison Scottish National Party

Money is tight, as Jenny Marra knows, and John Alexander and the SNP administration are working extremely hard to avoid compulsory redundancies. Jenny Marra knows well that Labour is not capable of offering alternative budget proposals, either in Dundee or in this place. That fatally undermines her credibility on the issue, because she has nothing to bring forward as an alternative plan.

John Alexander has led from the front in Dundee, trying to seize every economic and job opportunity, and I hope that Jenny Marra will back him on that. The workforce—whether at Michelin, Dundee City Council or anywhere else—deserves and, indeed, expects nothing less from us as local politicians.

When it comes to how the Scottish Government can best assist with the delivery of the vision for Dundee, it is critical that strategic investment decisions support that vision and that there is strategic investment in renewables and decommissioning in the deep-water port so that it can grow and compete for future offshore wind contracts and become a main player in that field as opportunities emerge. I know that Dundee Decommissioning Ltd and Dundee City Council are working very hard on that.

Dundee is a city that is transforming itself, building on its already strong performance in life sciences and gaming and—now that it has the V&A—as a cultural centre. A strong manufacturing base is equally important for the city and the port has huge importance in that vision. Alongside the redevelopment and repurposing of the Michelin site, it can ensure that Dundee not only retains a strong manufacturing base but expands and diversifies that base.

Photo of James Kelly James Kelly Labour

It is absolutely right for Labour to devote its business to the number of closures that have taken place throughout the country in recent months. It is right to do that for two reasons: to show—as Patrick Harvie mentioned—support for and solidarity with the workers affected in local communities and to learn the lessons from those closures so that we can move forward and avoid such events in the future.

I will draw on my experience of the closure of the 2 Sisters plant in Cambuslang, which I found deeply upsetting, because, as well as representing the area, I grew up there and continue to stay locally in Cambuslang. Some aspects of that closure were deeply unsatisfactory. When Ged Killen—the local member of Parliament—and I went to meet the management when the closure was first mooted, it was quite clear that they had already made up their mind, even though they had still to go through a consultation process. The plant had been there for 40 years, processing chicken, and it was still a viable business. As things unfolded, it became clear that the company had been in collusion with the main supplier, Marks and Spencer, which was supportive—it confirmed this to me in writing—of moving the business from Cambuslang to Suffolk.

In addition, when the 457 jobs were lost, which had a devastating impact on the area, it transpired that, over a period, 2 Sisters had been given grants from Scottish Enterprise totalling £543,000 on condition that it kept the plant operational until 2021. The company turned its back on the community, the workforce and the plant. Through freedom of information requests, it was revealed in November that 2 Sisters had still not paid back the £543,000 despite the fact that it had closed down the plant fully in September. I raised that issue at First Minister’s question time in November, and, when I met Scottish Enterprise just before Christmas, the money had still not been paid back. I urge the cabinet secretary to ensure that that money is returned. When it is returned, it should be reinvested in the Cambuslang community to support the people and families who lost their jobs, many of whom had worked at the plant over a number of generations.

We need to focus on the use of public money—

Photo of Derek Mackay Derek Mackay Scottish National Party

I am listening closely to what members are saying about enterprise support. The purpose of enterprise support is to create sustainable economic growth. We need to make the right interventions and there must be due diligence.

I might have misheard what Richard Leonard said about whether Labour members will vote for the Government’s amendment, but, if they do not, they will miss the opportunity to say to the UK Government that any Brexit would be bad but a no-deal Brexit would be catastrophic. I am listening closely to members’ impassioned—

The Deputy Presiding Officer:

Cabinet secretary, I hear what you are saying, but that has been a long intervention. I will give Mr Kelly the time back, because I think that the point can be dealt with in your summing up. I am sorry.

Photo of James Kelly James Kelly Labour

The cabinet secretary was sitting on the front bench earlier and heard Neil Findlay make it very clear that the Labour Party is totally opposed to a no-deal Brexit.

I go back to the serious point that I was making about loans and the use of public money. Richard Leonard has pointed out that the use of RSA grants has seen £220 million go to foreign companies and only £140 million go to Scottish companies. We need a proper assessment of the economic impact of those grants. As for the loans, they are a matter of real concern. In December, the

Sunday Mail reported that £18 million of loans had gone to firms and companies that operate in tax havens such as Jersey and the Isle of Man and that are, therefore, not paying tax. We should call in any loan that is not being used by an ethical firm.

I think—[

Interruption

.] I am drawing to a conclusion, Presiding Officer. We need another approach that puts people first and that looks at alternative business models such as co-operatives. We need to upskill in those areas where people have lost jobs, and we must look at the challenge of automation. It is crucial that we learn such lessons if we are to show support for these local communities and move things forward.

The Deputy Presiding Officer:

I am sorry, Mr Kelly, but time is tight.

Photo of John Mason John Mason Scottish National Party

I certainly agree with a lot in the Labour motion. However, I have one or two reservations and some questions about it, which I will try to touch on in my speech.

Like others, I agree that we should express solidarity with people who have suffered because of workplace closures. We are all part of a community, and we all have a responsibility to help to ensure that suitable jobs are available to everyone, and to work with employers that are facing difficult times.

At yesterday’s Economy, Energy and Fair Work Committee, we had a useful evidence session with Scottish Enterprise on its involvement with Kaiam. I hope that the plant will have a future, but I want to look back at that meeting and to highlight a number of points that came up.

First, we expect Scottish Enterprise to take some risks, and we have to accept that some investments will not work out as well as we, SE and everyone else hope.

Secondly, we expect Scottish Enterprise to take a hands-on approach, but not to micromanage businesses or take the place of their actual management. Finally, as we have heard, the management of some companies are, at the end of the day, much more proactive and transparent than others when they hit problems, and it is quite difficult to legislate for that sort of thing.

That leads on to the question about the types of jobs and employers that we should be looking for in the future. Perhaps, as others have suggested, we have been too dependent on a few big foreign-owned employers in some of our cities and towns, such that when something has gone wrong with them, the whole town is hit badly. I broadly favour attracting inward investment; however, that comes with risks, so I agree with the use in the motion of the word “indigenous”, which I think is extremely good.

On Monday evening, the Rural Economy and Connectivity Committee, which is currently considering the South of Scotland Enterprise Bill, held a formal meeting in Dumfries. A range of issues came up, including whether in a town such as Annan it is good to have one big employer with 700 staff or whether that puts too many eggs in one basket. Is it better to have 20 organisations with, say, 35 staff each, or does it take too long to grow that number of enterprises?

There is another question about the type of business and what it does. I think that there is broad agreement that Scotland should focus on the high end of the market—in other words, quality food and drink and technology—instead of trying to mass produce cheap widgets. After all, we are never going to be able to undercut India or China on cost. However, that leaves us with a challenge. What happens when one of our more traditional factories that has been going for a long time and produces a lower-end product hits problems and closes, as I have seen in my constituency?

I agree with the motion that we want “indigenous business development” and “a more diverse economy.” The Economy, Energy and Fair Work Committee has looked at those issues, and there are encouraging signs in respect of the level of business start-ups. However, the committee was concerned about what is called “fear of heights” and the tendency for small indigenous businesses in Scotland to be sold off too soon. Often, the owners are from outwith Scotland and potential has not been realised.

I will go back to the motion. I hope that most of us would agree with putting

“the interests of employees and their communities” at the heart of the economy. Enterprises must serve their wider community, rather than the community being there to serve the enterprises. However, there is a balance to be struck, so I am slightly concerned that customers are not mentioned in the Labour motion. In the past, we have had problems with organisations including British Rail and British Airways, when the good of their employees was perhaps overemphasised to the detriment of the organisations’ customers. The result was very poor loss-making public services. I strongly believe in public ownership and would prefer that our gas, electricity and railways were still in public hands. However, we have to strike the right balance: a good enterprise will be good for the customers, the employees and the community.

I agree with the motion that we want more

“co-operative and employee ownership models”.

Last Friday, I visited one of the largest social enterprises in Scotland—the Wise Group, which is based in my constituency. I continue to be impressed by all that it does.

The Conservative amendment is nothing if not predictable. I actually wrote the next bit of my speech before I saw the amendment, which turned out to be just as I had expected. As usual, the Conservatives argue for low taxes to boost the economy, as if cheap and cheerful is always best. I agree about stability in taxation: the SNP Government has provided that, with relatively small adjustments year on year.

However, I challenge the Conservatives on whether business is always attracted to the cheapest place. London seems to remain a very attractive place for the finance sector, despite high office rents, high salaries and high housing costs. I presume that that is because other factors are at play—for example, a large pool of suitable labour and a desire for similar businesses to co-locate.

Equally, places with low taxes and poor public services will not necessarily be attractive to business. Many businesses look for a good education system and a skilled workforce, and their employees want a good health service and good schools for their kids, even if that means paying a bit more tax.

In conclusion, I am pleased that Labour has initiated today’s debate. As a party, Labour is somewhat detached from reality—[

Laughter

.]

The Deputy Presiding Officer:

I am sorry, but you must conclude. I have not even spare seconds. You must sit down.

Photo of John Mason John Mason Scottish National Party

I am much happier to be aligned—

Photo of John Mason John Mason Scottish National Party

I am much happier to be aligned with the Labour Party than with the Conservatives.

The Deputy Presiding Officer:

You must sit down. Do not speak over the chair. I call Jamie Greene.

Photo of Jamie Greene Jamie Greene Conservative

Thank you for ending that speech, Deputy Presiding Officer—much to the benefit of the chamber. Do not get me wrong: bits of Mr Mason’s speech were interesting, such as the bits about diversification in the economy. I will probably also touch on some of those issues.

However, John Mason’s mystical predictions about our amendment fascinated me. Nowhere does our amendment say anything about our wanting Scotland to be a cheap place to come and do business. I am sorry, but the tone of that comment sends out completely the wrong message to any businesses that are listening to their Parliament and watching the debate.

I thank the Labour Party for bringing a debate about the economy to the chamber; it is nice to see some Labour members actually arriving in the chamber as we approach the debate’s final minutes.

Labour’s motion mentions specifically business closures that we have seen. We talk about those issues a lot in the chamber. Throughout the debate, many members from all round the chamber have touched on the important point that when large and medium-sized companies that are very important to small towns and cities go out of business, the effect on those communities is immense and profound. Losing a job is never easy: for many people, redundancy is not just a financial issue but a psychological one.

We have many differences of opinion on issues such as taxation, state intervention and the privatisation versus nationalisation issue that Labour opened with. However, whatever our differences, we should remember that jobs—people’s livelihoods—lie at the heart of the matter. Growing the economy is not just about people having a few extra pounds in their pocket. It is also about the important positive emotional and mental effects that being in work provides.

There are many things to welcome in Labour’s motion. It calls for a new

“industrial strategy ... to promote indigenous business”.

We could argue that we are already doing quite well at that. Scotland is famous for—and is getting better at being famous for—its industries. The whisky industry is the most commonly cited industry, but what about our video games industry in Dundee, the satellite industry in the west, or dairy farming in the south?

The UK Government produced an industrial strategy in 2016. In the interest of time, I will not go into it in too much detail, but it looked at some things that the UK and Scotland need to do to future proof their economies. It set out plans to increase investment in R and D and to attract those types of businesses; to improve productivity, which we all accept is an issue; to promote science, technology, engineering and mathematics subjects to children at an early age; and to significantly upgrade infrastructure, which means digital, housing and transport networks infrastructure, in order to attract people and businesses to the area.

As others have mentioned, the city deals have provided more than £1 billion of investment in Scottish cities and regions. Some of that money will go towards specific projects.

I think that we would see tangible benefits from other projects that I have mentioned before, including the Glasgow airport rail link.

Photo of Jamie Greene Jamie Greene Conservative

I am really tight for time. I am sorry.

I hope that we can all get behind the Glasgow airport rail link. I would like to see some projects that I think would deliver tangible benefits coming to fruition.

However, that is not enough in itself. The Scottish economy faces significant challenges. It is growing at half the rate of the UK economy. That is not a political point. Wage growth is slow, and the forecasts put us behind the rest of the UK. The reality is that, for many quarters, our economy has been teetering on the edge of negative growth. That should not be acceptable to anyone in any party in Parliament.

To Labour’s credit, it outlines in its motion the need for business diversification and for support for indigenous growth. Those are two really important points in the debate. It is important to recognise that many areas of Scotland have suffered as traditional industries have declined.

In my area, we face a problem with Texas Instruments, which is a tech business in Greenock. We have been struggling to find a buyer for that business for quite some time, and significant cross-party effort is going into looking at options for it. If we cannot find a buyer, it will close. That is what it will come down to. What are the options for the people who work there? It is the same story every time there is a significant closure: people need to be reskilled and they need to find other opportunities, or many of them will take early retirement. However, it can be done.

We can future proof our economy, but to do that and truly to have an indigenous economy, we need to support our young people. We need to give them the right skills for the future, and we need to support our new industries, including the gin industry, the tech sector, the games industry and the satellite industry. Improving the STEM skills of transitioning workers can help them to move from old traditional models into the new world.

Conservatives have some ideas of our own. We do not have time to go into them today, but I want to touch on a specific idea of ours: the institute of e-commerce. We think that there should be a specialist public agency that is dedicated to e-commerce in order to bridge the gap between Scotland and some of our competitive markets. Specialist training, support and advice to businesses are needed in order for businesses to get into the digital space. We will miss opportunities unless there is a renewed focus on the digital industries. When I was the digital economy spokesman, I called many times for a dedicated digital minister in the Government. It is good to see the renewed focus on the digital industries. That will help to refocus our minds.

The context is that this is a Labour Party debate, and it thinks that we can just have an academic argument about neoliberalism. I am afraid that Conservative members make no apology for saying that Scotland needs an economy of growth and entrepreneurialism and that “wealth” and “job creation” are not bad words and should not be seen as such in the Parliament.

Photo of Colin Smyth Colin Smyth Labour

However long I have the privilege of serving the people of South Scotland as an MSP, I suspect that I will look back on 3 April 2018 as one of the darkest days. Parliament was in recess. I was sitting in my constituency office that morning when I received a phone call from someone whom I suppose we would call “an insider”. They told me that, later that day, the workforce at Pinneys of Scotland in Annan would be summoned to a meeting with management from the owner, Young’s Seafood, and told that the Pinneys factory on Stapleton road in Annan would be closing.

To say that I felt sick to my stomach would be an understatement. I have lived in Dumfriesshire all my life and I knew that the closure was an economic tsunami for the area. Pinneys was the largest private-sector employer in Dumfries and Galloway and the closure meant the loss of 450 permanent jobs and hundreds more agency and seasonal posts. I will put that into context: Annan has a population of just 8,500 and 600 job losses in the community was the equivalent of 48,000 job losses in Glasgow, 41,000 in Edinburgh, 18,000 in Aberdeen or 12,000 in Dundee.

Pinneys had been part of the economy in Annan since the factory was established more than 40 years ago. Generations of families had worked there, in some cases whole families at the same time. On the evening of the announcement, I spoke to one mum who told me that she worked at Pinneys, as did her husband and her daughter—a whole household facing the loss of their livelihoods in a single day.

The response from the Scottish Government to the closure was to set up a so-called task force. The community was told that no stone would be left unturned in convincing Young’s Seafood to change its mind. The community was then told that everything would be done to find a buyer for the factory and that support would be given to the people who were losing their jobs to find alternative employment. In truth, since the closure announcement was made, just £250,000 has been invested by the Scottish Government directly to support the Pinneys workforce, which came from an existing budget of the south of Scotland economic partnership. We need an investment of £10 million and a proper economic action plan for Annan, not just £250,000. It has been six months since the last worker left Pinneys. The factory has closed and many of the workers feel forgotten. As the trade unions have highlighted, the UK Government’s decision in 2013 to halve the consultation period before large-scale redundancies can take place from 90 days to just 45 days gave no time in which to properly explore alternative options for Pinneys.

The tragedy of the Pinneys closure is not just the way in which so many livelihoods were cast aside so quickly at the whim of big business owners, Young’s Seafood, but the fact that there were simply no alternative employment opportunities in the local area for people to turn to. Fewer than 200 of the workers who held permanent posts at Pinneys have found new employment and just 38 of those jobs are within the town of Annan. Unemployment across Dumfries and Galloway is rising and is now at its highest level in four years.

The closure of Pinneys exposes the neglect of the south-west economy. The gross value added per head in Dumfries and Galloway is just 80 per cent of the Scottish average and it is the lowest paid region in Scotland—earnings are 15 per cent below the national average. The proportion of people of working age who have no qualifications is 12 per cent, which is twice the level that exists in the Highlands and Islands. We have a chronic problem of outward migration of young people, due to the lack of high-skill, high-wage job opportunities. The Government talked about regional equity and inclusive growth in its past two economic strategies, but where has the inclusive growth been for the people of the south-west, which has, for far too long, been a forgotten region? There has been a chronic lack of investment in our infrastructure, both physical and digital, and key trunk roads, such as the A75, A76 and A77, are simply not fit for purpose. The lack of interest in the region from national agencies under Government direction, such as Scottish Enterprise, has meant that opportunities to properly support growth in indigenous businesses have been missed, thereby robbing the Pinneys workers of the opportunities that they so desperately needed.

The tragedy of Pinneys highlights the need for a new approach, one that sees investment in all of Scotland, by expanding further and higher education opportunities in the areas that have been left behind and delivering, for once, a competitive advantage in our rural areas when it comes to the digital economy, where they always have to play catch up. We must ensure that we have a locally accountable south of Scotland enterprise agency that properly supports local businesses, co-operatives and social enterprises in growing and delivering the strong, diversified sustainable economy that we desperately need. We must resolve to pursue that alternative approach, in order to build the economy of south-west Scotland. It may be too late for Pinneys, but it would allow us to say, “never again.”

Photo of Fulton MacGregor Fulton MacGregor Scottish National Party

In all sincerity, I thank Labour for bringing the motion to the chamber. I share Labour’s concern about the number of companies that are going out of business and the impact that that has on their staff.

One of the first issues that came to my attention after being elected in 2016 was the closure of the Tannoy business in my constituency. As members may know, Tannoy had been a major employer in Coatbridge for decades and the closure had a devastating impact on the workforce and their families.

More recently, there was the sudden closure of T.O.M. Vehicle Rental, which, although in nearby Airdrie, impacted a great number of my constituents who worked there, and my colleagues Alex Neil MSP and Neil Gray MP, as well as the Minister for Business, Fair Work and Skills, Jamie Hepburn, have been doing a lot of work on the recent closure of the Healthcare Environmental Services site in Shotts, which is also nearby. I pay tribute to them for that.

I welcome some of the steps taken by this Government to grow our economy. My constituency has, for example, benefited greatly from the Glasgow city region deal through the huge investment in and the delivery of the Gartcosh and Glenboig link road through the community growth area project. I take this opportunity to join calls from my colleagues for the UK Government to be more proactive and to match Scottish Government funding of city deals across the country.

As I have said, I welcome the opportunity to debate this issue, and I commend the Government amendment to the chamber. Both the motion and the amendment raise important issues, and I will put a bit of focus on Brexit.

Despite the people of Scotland voting overwhelmingly to reject Brexit, we are seeing our country and its businesses being affected in a most damaging way by what has gone on since the vote. With less than three months to go before the UK crashes out of the EU, we have probably the most incompetent Prime Minister in history, who led her Government to the biggest defeat in history yesterday over a deal that took her two-and-a-half years to negotiate and would have done nothing but damage to businesses, not only in Scotland but across the whole of the UK.

Like many colleagues, I spend some of my time in the constituency visiting local businesses large and small, and the fear and concern about Brexit—particularly a no-deal Brexit—is very real. Today, my office spoke with the managing director of Chemco International, Colin Wade, whom I will be visiting on Friday. Chemco is based in Shawhead and employs around 30 people locally. It is an international company that recently became employee owned, and it develops the most advanced coatings worldwide. Just this morning, Colin Wade sent a communication to the senior managers in his company to outline the preparations for a no-deal Brexit. In it, he describes the European Union as

“easily the largest single market”.

The communication also outlines that the issue will be not only with shipping finished products to the EU, but that

“Chemco relies significantly on certain raw materials and specialist packaging that are manufactured, else components sourced, from within mainland European Union.”

It goes on to say that a no-deal Brexit will lead to delays in shipping due to queues at ports throughout the UK.

I also want to speak briefly about Clarke Fire Protection, another international company operating on the world stage, which is based in Townhead in Coatbridge and employs almost 100 local people. I had the pleasure of visiting that company recently, and the general manager told me that the complete lack of certainty about what will happen with Brexit has left the company unable to prepare properly, given that, like everyone else, they have no idea what will be happening from one day to the next. She explained to me that more than 80 per cent of the products produced there are exported, and that the business is under threat from its direct competition in mainland European Union. It is simply unacceptable that the UK Government is causing my constituents such uncertainty in relation to their livelihoods.

I am immensely proud to have such multinational companies in my constituency, getting on with their job day in, day out. Those are just some; I could mention many others, including Retronix, Freightliner in Gartsherrie or the collagen casing producer, Devro, which is based in Moodiesburn. It is clear that Coatbridge and Chryston is open for business, supported by initiatives from both North Lanarkshire Council and the Scottish Government. However, the reality is that Brexit is causing significant concerns and there are very real dangers facing businesses up and down Scotland as a result of the shambolic UK Government’s handling of the negotiation process. That is the real threat to businesses in Scotland.

There can be no doubt that Brexit poses that threat and, as discussed earlier, if a hugely damaging no deal cannot be avoided, it will become increasingly clear to a majority in Scotland that our best interests, needs and welfare will be met only as a fully independent nation. I know that such self-determination will protect the businesses that I have mentioned, others in my constituency, and the many workers and their families who depend on the jobs.

I have one last plea, for the Labour Party. Please, when it comes to decision time, if you have not already made your decision about how to vote, do not vote against the SNP amendment for the sake of voting against the SNP. Given what happened yesterday with Brexit, it is time to unite against the Conservative Government and send a message. Please back the Scottish Government amendment.

Photo of Murdo Fraser Murdo Fraser Conservative

This has been an interesting debate, and I thank the Scottish Labour Party for giving us the opportunity to discuss Scotland’s future economy. Despite some of the rhetoric that we heard from Richard Leonard in his rant against neoliberalism—to be fair to him, he does rhetoric very well—we have a number of points of agreement with the Labour Party. In the spirit of consensus, I will deal with those points first, before I come to some points on which we do not agree.

Members from across the chamber talked about the impact of large plant closures on their communities. Jenny Marra and Shona Robison talked about Michelin in Dundee; Angela Constance, Neil Findlay and Gordon Lindhurst talked about Kaiam in West Lothian; Rachael Hamilton talked about Mainetti in Jedburgh; James Kelly talked about the 2 Sisters plant in Cambuslang; and Colin Smyth talked about Pinney’s in Annan—there might have been other references that I missed. It is absolutely right to highlight concern about individuals who have lost their jobs or whose jobs are at risk following those recent workplace closures. That is always a difficult time for such individuals, and any Government must be active in providing support to people who lose their jobs.

It is a sad reality that, in a dynamic economy, businesses will fail from time to time. It is not the business of Government to be involved in trying to save all failing businesses, regardless of the circumstances, otherwise we would still be subsidising candlemakers and wheelwrights. The role of Government should be to support people who lose their jobs, and if it is appropriate through Government intervention to secure a future for a business by going down a new route, that should be explored. Above all, Government should create a supportive business environment that allows successful companies to be created and expand, and which provides jobs for people who might be the victims of redundancies elsewhere. That is precisely what the Scottish Conservatives believe the economy should be all about.

Photo of Derek Mackay Derek Mackay Scottish National Party

Does Murdo Fraser believe that Brexit provides that helpful environment in which businesses can prosper?

Photo of Murdo Fraser Murdo Fraser Conservative

Brexit is creating headwinds, but it is not the biggest threat to the Scottish economy at the moment. We heard a number of speeches from SNP members who were pressing the case for independence at this time. There is no greater threat to Scotland’s economic recovery than the prospect of another independence referendum.

I want to pick up on the suggestion that too much support has been given to foreign-owned companies, which was raised in the debate first by Richard Leonard and then by others, including John Mason. A gentle irony from Richard Leonard’s speech was that he railed against nationalism in all its forms, but then went on to make that comment about foreign-owned companies. I recall the issue of whether Government agencies are more supportive of inward investors than they are of indigenous companies being addressed on the economy committees in the Parliament on which I served in previous sessions. It is a perennial issue but, despite that, it is quite hard to find evidence that supports the contention that more support is given to foreign-owned companies. Scotland has a very good record in attracting inward investment—we have had that record for at least the past three decades. We should not see that as a negative, because many people have had successful careers in such companies, with well-paid and secure jobs.

However, it is fair to recognise that the structure of our economy means that we are not growing enough of our home-grown talent. We have an hour-glass-shaped economy, with a smallish number of very large companies—if they close, there is a major impact on jobs—and a very large number of very small companies, but not enough in the middle. If there has been a failure of enterprise policy over a period of decades, it has been the failure to grow middle-sized economies, which are the mainstay of the economy in many other countries, such as Germany.

Where we depart from Labour is in relation to the solutions. We believe that Scotland needs a competitive tax regime, not one under which business is treated as a cash cow. Corporation tax might not be devolved, but business rates are. As Rachael Hamilton pointed out, it remains a concern that the large business supplement is still set at a much higher rate in Scotland than in the rest of the United Kingdom, which puts our businesses in the sector at a competitive disadvantage. That issue particularly affects areas that are close to the border, as Rachael Hamilton’s constituency is. I fear that the Labour Party would go even further than the SNP has gone in taxing business.

Photo of Murdo Fraser Murdo Fraser Conservative

I need to make progress; I have only a minute left and I want to talk about the industrial strategy, which Dean Lockhart, Gordon Lindhurst and Jamie Greene mentioned.

The industrial strategy is a substantial investment from the United Kingdom Government, to promote innovative ideas, great people, major infrastructure upgrades, the best business environment and prosperous communities across the UK.

We see evidence of that in the city deal projects that are being promoted across the country. In the area that I represent, the UK Government’s contribution to the Tay cities region deal has been supporting innovation. Among other projects, there is £20 million for the international barley hub and £25 million for the advanced plant growth centre at the James Hutton Institute in Invergowrie; £5.7 million for the development of a cybersecurity centre of excellence at Abertay University, which I visited last week; £10 million for the Perth city transformation project, which includes the refurbishment of Perth city hall; and up to £5.2 million for advanced plastic reprocessing in the area. Those are practical examples of how the UK industrial strategy is working to improve the economic environment in our country.

The Deputy Presiding Officer:

And there you must conclude. I am sorry, Mr Fraser. Thank you.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

Like other members, I welcome today’s debate. Although this might not have appeared to be the case at many junctures, there is, across the parties, much agreement with the sentiment of the Labour motion, which we will support at decision time.

I want to talk about the Tory amendment and the opening speech from Dean Lockhart. Ordinarily in debates, the closing speakers reflect on what members said; I want to reflect on what Dean Lockhart did not say. He failed to say that over the past year economic growth in Scotland has outstripped that of the UK as a whole. He could not explain why the most recent figures show that Scotland has outstripped the UK in business research and development expenditure growth, with a rate of 13.9 per cent compared with the UK rate of 2.9 per cent. He did not mention that, since 2007, there has been a 93.6 per cent increase in business research and development expenditure, compared with 27.2 per cent in the rest of the UK. He did not mention that between 2007 and 2016 productivity growth was higher in Scotland than in any other country in the UK and in all regions of England—it was three times the rate of the United Kingdom.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

Mr Lockhart can mention whatever he wants to mention in a minute. Let me continue to tell him what he did not mention.

Mr Lockhart did not mention that we have a joint record low level of unemployment. He did not mention that we have achieved—four years early—our headline target of reducing youth unemployment by 40 per cent by 2021 from the 2014 level. He did not mention that youth employment is 3 per cent higher in Scotland than it is in the UK. He did not mention that the Scottish Fiscal Commission has revised its growth forecast for the Scottish economy in 2018 by double the previous estimate. He did not mention that the number of registered businesses has grown by 16.6 per cent in Scotland since 2007, which belies Rachael Hamilton’s suggestion that there is an unsupportive environment. He did not mention that the value of exports in Scotland went up 45 per cent between 2000 and 2016.

Let us hear what Dean Lockhart wants to mention now.

Photo of Dean Lockhart Dean Lockhart Conservative

I did not mention those because the vast majority of data shows that the Scottish economy is underperforming compared with the rest of the UK.

The minister mentioned productivity. Productivity in Scotland is still below that of the UK, and the SNP has failed to meet every single one of its seven economic targets.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I have systematically gone through indicators that demonstrate the success of the Scottish economy, often by comparison with the rest of the UK, and yet Mr Lockhart wants to tell us about an underperforming economy.

I thought that it was important to put Mr Lockhart’s remarks in context. However, of course we should recognise that we face challenges, locally and nationally. In that regard, let me turn to Labour’s position in respect of our amendment.

It is clear that the most fundamental and immediate danger to our economy is Brexit. Just today, Colin Borland, from the FSB, said:

“We’re not going to find our way out of this mess”— that is, the UK Tory Government mess—

“without cross-party collaboration and co-operation.”

We have heard the Labour Party say clearly, on a number of occasions, that it is against a no-deal Brexit. Labour members today have the chance to put their money where their mouth is and demonstrate that that is the case. Today of all days, when we debate the economy, knowing that Brexit presents the most fundamental risk to the Scottish economy and that a no-deal Brexit will lead to further closures and job losses, this is Labour’s chance to demonstrate that it is against a no-deal Brexit, by backing the Government amendment. It is beyond my understanding why the party refuses to back our amendment. Perhaps Mr Findlay will explain why.

Photo of Neil Findlay Neil Findlay Labour

I say for the third time today that we oppose a no-deal Brexit. What part of that does Jamie Hepburn not get? I gave that commitment. Will he give a commitment to apologise to the Kaiam workers for failing to lift the phone and make any effort to save 300 jobs?

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I will come to Kaiam in a minute. Here is my challenge to Mr Findlay. He says that he has said three times that Labour opposes a no-deal Brexit. Well, I am asking Labour members just one time—they have one chance today—to press their buttons to support our amendment and to demonstrate that they are against a no-deal Brexit.

I will not be able to cover all the other issues that have been raised, but there was a suggestion by the leader of the Scottish Labour Party of bias in regional selective assistance. That is an unfair characterisation. The basis of any consideration is that a proposition for regional selective assistance that is placed before our enterprise agencies will be given full consideration. Of the 75 offers made to companies in 2017-18, 99 per cent were made to small and medium-sized companies, which I am sure that every member would welcome. The idea that regional selective assistance is not supporting Scottish-owned enterprise is not correct. From 2009-10 to 2017-18, 869 offers of RSA were accepted, of which 578, or 66.5 per cent, were made to Scottish companies, 109, or 12.5 per cent, were made to UK but non-Scottish companies, and only 21 per cent were to companies owned outwith the UK. Clearly, we want to do more, and we must and will do more.

Michelin has been mentioned. We very much regret the decision that Michelin took to withdraw from its current activity, but we can see in that situation a positive example of a company that is willing to remain engaged in the city and to work with the Government and unions to secure a positive future. We will take that forward through our Michelin action group and the memorandum of understanding that we have signed with the company. That will secure a positive future for the Dundee site. Jenny Marra asked what support we can give to the city of Dundee. We are providing £200 million for a city region deal for Dundee. The UK Government is short-changing that deal by £50 million.

Here is another challenge to the Labour Party and to Ms Marra. They have the opportunity to demonstrate that they support the Dundee city region and every city region area in Scotland by calling on the UK Government to meet the Scottish Government’s commitment and to provide the same amount of investment.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

Labour can do that again today. Labour can rule out a no-deal Brexit and it can back the Scottish city regions by saying that the UK Government should invest the same amount, and to do that it can back our amendment.

Photo of Rhoda Grant Rhoda Grant Labour

We have brought the debate to Parliament today in the shadow of company closures and huge job losses. The statistics are frightening, and they all represent people’s lives and futures. For a person to be told that they, and possibly others in their household, are losing their jobs is truly terrifying. Their future is in the balance.

Many people are only one pay packet away from a food bank. We saw that graphically illustrated at Christmas when workers were not paid and were forced to resort to food banks.

We need real change in order to rebalance our economy. We need to move away from chasing inward investment from abroad to supporting and promoting our indigenous businesses. We need to put employees and the communities that they support at the heart of our economy.

Workers need to be able to own and run their own companies. We have seen success in many worker-owned businesses and co-operatives, yet those models of ownership are left on the sidelines when it comes to support. That is simply wrong. Those companies endure and they provide jobs and economic development. The wealth that they create is kept in their communities rather than moved overseas.

I am a Scottish Co-operative Party MSP, and proud of it. In the short term, we want the co-operative economy in Scotland to double in size. That would lead to greater wealth in our communities and more socially aware employment.

Richard Leonard and Neil Findlay listed many companies that are under threat of closure. The number is a damning indictment of the SNP’s management of the economy. It knew but did nothing about many of those closure threats. Other closures can be put down to its mismanagement of the Scottish economy. We need real change in economic policy—we need the opportunity for workers to buy failing companies, using the right-to-buy principles of land reform.

Photo of Derek Mackay Derek Mackay Scottish National Party

I simply ask why, if Labour believes that Brexit is a threat to the economy and will lead to more closures, it will not vote against that this evening?

Photo of Rhoda Grant Rhoda Grant Labour

I will come to that. First, I want to point out to the Government that its policies are wrecking the Scottish economy. The cuts that the Government has imposed on councils have led to huge job cuts in our communities. The Government has done nothing about that. Those well-paid jobs are needed in our communities; they support the most vulnerable people.

Jenny Marra talked about the impact of job losses on the wider community in Dundee. She mentioned Michelin, HMRC and local government, and she went all the way back to Timex. The first trade union conference that I attended was addressed by Timex workers. The women who were fighting for their jobs inspired me to get involved in the trade union movement and in politics.

Neil Findlay reminded us of the distress of Kaiam’s workers who went unpaid just before Christmas. They must have been so angry knowing that the Government had pumped in money, but the company, when it knew that it was going under, did not even warn them. Where did its loyalties lie then? Did they lie with its Scottish workforce, or with its overseas owners?

Photo of Neil Findlay Neil Findlay Labour

Does

Rhoda Grant share my frustration that, in a debate on recent job losses and the Scottish economy, the minister who was involved in the Kaiam situation did not even mention it in his speech?

Photo of Rhoda Grant Rhoda Grant Labour

I absolutely agree with that. It is disgusting that the minister

Photo of Rhoda Grant Rhoda Grant Labour

Maybe the minister will address that very comment.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I point out that, of course, I will always reflect on what more I can do personally in any such circumstances. Ms Grant and the Labour Party must surely understand that every effort is made by the Government and our agencies to do whatever we can. That was the case with Kaiam. Unfortunately, things do not always work out as we would like them to. Effort was made there, and that will continue to be the case as we go forward.

Photo of Rhoda Grant Rhoda Grant Labour

That fell short of the apology that we were looking for.

James Kelly talked about 2 Sisters Food Group, which received £540,000 of public money. Had that money been given to the workforce, maybe their jobs would still be here today.

Colin Smyth talked movingly about the impact of the closure of Pinneys, which devastated a whole community. He highlighted that large-scale job losses in small communities can have a disproportionate effect, which I understand, given the job losses in Dingwall, Invergordon and Fort William in the Highlands, and the impact that those have had on their communities.

The SNP amendment talks about the “threat” of Brexit—it is a threat, and it has already damaged our economy. We will never—I repeat, never—support a no-deal Brexit. However, what is lost on the nationalists is that independence is an even bigger threat. We do four times more trade with the rest of the United Kingdom than we do with Europe. If the past few months have told us anything, it is that we must avoid independence at all costs. [

Interruption

.] SNP members do not see it. The SNP’s cuts commission pointed that out, but its members still do not see it. The biggest threat to the Scottish economy is independence. [

Interruption

.]

Photo of Kenneth Macintosh Kenneth Macintosh Labour

That is quite enough. Let Ms Grant conclude her speech.

Order, please.

Photo of Rhoda Grant Rhoda Grant Labour

We need to retain the benefits of industry within our communities, and we need to work with them. That is the way to build our economy and lift people out of poverty. We need an economy that works for the many, not for the few—one in which wealth and power are shared. That will empower our people and should be at the heart of the Scottish industrial strategy.