Realising Scotland’s Potential

– in the Scottish Parliament on 4th June 2019.

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Photo of Linda Fabiani Linda Fabiani Scottish National Party

The next item of business is a debate on motion S5M-17504, in the name of Dean Lockhart, on realising Scotland’s potential.

Photo of Dean Lockhart Dean Lockhart Conservative

The Scottish Conservatives will use our time today to set out a new direction in economic policy and a comprehensive new approach to skills and training.

The need for a new economic model has never been greater. Last week, the Scottish Fiscal Commission forecast that Scotland’s economy will continue to underperform for the next four years. As a result, income tax revenues are forecast to be £1 billion lower than expected. Although there is no doubt that the outcome of Brexit is creating uncertainty, the economic underperformance stretches back 12 years.

According to the Scottish Parliament information centre, had growth in Scotland kept pace with the rest of the United Kingdom over the past 12 years, our economy would be £7 billion larger. We agree with the recent comments of the Fraser of Allander institute, which said:

“Brexit should not be the only focus of attention” and that there has been

“little ... discussion of the ... structural challenges and opportunities” that Scotland’s economy is facing.

Photo of Dean Lockhart Dean Lockhart Conservative

I will later.

That is why we will set out measures to address those challenges and opportunities. With regard to Scotland’s trade, more than 60 per cent of our business is with the rest of the UK, but enterprise policy does not reflect that economic reality. The Scottish Government has set up more than 30 trade offices across the world, but only one trade office in the rest of the UK. No business in the world would neglect its biggest single market in that way. If we can increase our trade with the rest of the UK by just 3 per cent, that would be equivalent to a 10 per cent increase in our trade with the entire European Union. That is why we have announced policies to establish a series of trade hubs across the UK to help Scottish business become part of the supply chains in the major economic regions of the UK.

We need to equip Scotland’s business to expand into new markets—fast-growing economies such as China and south-east Asia. Those countries are moving their global trade on to e-commerce and other technology platforms, and we need to ensure that Scotland keeps pace with such developments. At the moment, only 9 per cent of Scottish business embeds digital in its operations. That is why we have proposed the creation of an institute of technology and e-commerce, an agency that would work with a new Scottish exporting institute to help up to 3,000 firms a year to move their business online in order to access new markets.

We also propose the creation of a new Scottish diaspora network. There is a powerful Scottish diaspora across the world, which is ready to help Scottish business expand into overseas markets. Our proposals would see a new global diaspora network, with more than 5,000 active members across the world, helping Scottish firms to expand into those new markets. The new network would also tap into the expertise of the Scottish domestic diaspora—Scots who have significant overseas contacts and connections and who have returned to Scotland.

The proposals would help Scottish business to increase global exports and, in turn, productivity and wage levels. The proposals could be actioned today, by using the existing powers of the Scottish Government, and would require no additional funding to the overall enterprise and skills budget.

I will give way to the minister, if she wants to intervene.

Photo of Kate Forbes Kate Forbes Scottish National Party

I will intervene on a different point. In the spirit of gaining consensus, on the point around attracting skills, one of the biggest threats to that—particularly in the digital sector—is the restriction on freedom of movement, which some businesses have called an “obstinate approach” that neglects business interests. What does Mr Lockhart say to that?

Photo of Dean Lockhart Dean Lockhart Conservative

Immigration will continue to play an important part in Scotland’s economy, but it is a derogation of duty for any Government to ignore the training needs of its young people and look for immigrants who have been trained in other countries to address the skills gap.

I turn to our proposal to introduce a comprehensive new approach to skills and lifelong training in Scotland. The need for a new approach is clear. Last week’s forecast from the SFC shows that Scotland has become a low-growth, low-wage and low-skilled economy. We need a new skills system that values a vocational education every bit as much as an academic one.

The first thing that we propose is to replace the current school leaving age of 16 and introduce a compulsory skills participation age. That would mean that young people would either stay in education or training until the age of 18, or—if they want to start work earlier—undertake a structured apprenticeship or accredited training programme. That will ensure that they receive relevant and on-going training for their future needs.

Photo of Dean Lockhart Dean Lockhart Conservative

I will in a second

Our skills participation policy, which will focus on those who leave school without going into education or formal training, will be targeted at those who are most in need of extra help and support. The policy is based on an approach that was championed by the Institute for Public Policy Research late last year. It would transform the number of young people who are getting the training that they need, help to address the skills gap in the economy, and help to reduce the gap in attainment between children from rich and poorer areas.

Photo of Clare Adamson Clare Adamson Scottish National Party

Given your commitment to keeping people in education and training, can you explain why the United Kingdom Government did away with the education maintenance allowance, which we maintained in Scotland for the very reason of keeping people from disadvantaged backgrounds in education and training?

The Deputy Presiding Officer:

Members should always speak through the chair, please.

Photo of Dean Lockhart Dean Lockhart Conservative

I will come to that point later. Today we are announcing a comprehensive set of new proposals that will address the skills gap that the Scottish National Party has created.

It is not just young people who need a transformation in the level of support for training. We need a comprehensive new system to prepare our workforce for rapid changes in technology and for workers who will have several jobs in their career. To achieve that, we will introduce a new lifelong skills guarantee. The proposal is that Government, helped by business, would guarantee that anyone who wants to retrain or upskill during their career would get the chance to do so. It would see the introduction of a new scheme in which firms and workers can invest in a personal learning account, match funded by Government for the lowest paid and lowest skilled, to be used for lifelong training and upskilling.

The new policy of a lifelong skills guarantee would include the expansion of the lifelong apprenticeship, aimed specifically at workers over the age of 25, to ensure that apprenticeships are available to all workers who want one.

The increasing emphasis on vocational training and lifelong learning would be supported through a series of additional measures, the first of which would be the expansion of vocational-focused schools for talented pupils aged between 14 and 16 who are disengaged from traditional education. We want to see the creation of a vocational-focused school in every Scottish city, modelled on Newlands Junior College and aimed at talented pupils who do not benefit from a mainstream education.

We would introduce second-chance centres in areas of need across Scotland to give people another chance to get the core skills that they really need. Second-chance centres, which would offer basic qualifications in core subjects, could be set up within colleges or jobcentres or as standalone organisations, depending on the most appropriate approach for the local area.

The measures that I have outlined today would represent a transformation in training and lifelong learning opportunities across Scotland. Those who are most likely to benefit are the lowest paid and lowest skilled, and those who are most at risk from the changing nature of work.

After 12 years in government, the SNP has failed to deliver sustainable economic growth and we have a skills system that is not fit for purpose. It is time for a new approach. Today we have announced ambitious proposals that would transform the skills system in Scotland and boost economic growth. In the months to come, the Scottish Conservatives will announce further proposals to grow Scotland’s economy and deliver on Scotland’s true economic potential.

I move,

That the Parliament notes with concern that economic growth and long-term growth rates for Scotland continue to trail behind the rest of the UK; recognises that the Scottish Government’s Economic Strategy has failed to deliver sustainable growth, meet productivity targets or create a high-wage economy; acknowledges the need to address the skills gap in the economy through a comprehensive new approach to skills and training, and calls on the Scottish Government to use its existing powers to introduce a new policy framework to address the structural challenges facing the Scottish economy.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I welcome the opportunity that the debate provides to outline the strength of Scotland’s economy and labour market. I also welcome the opportunity to recognise the drive and resilience of Scotland’s business community and the ambitions that I believe are shared across the chamber for future success.

A strong economy is essential to supporting jobs, incomes and quality of life. Alongside growing, competitive and innovative businesses, our economy must be environmentally sustainable and inclusive; it must provide benefit and opportunity for all our people and communities.

The value of the Scottish Government’s commitment to securing a sustainable and inclusive economy is widely recognised, both here in Scotland and beyond. Our distinctive approach is built into the national performance framework, which provides a purpose not just for Government but for the whole country. Through the NPF, we measure performance through a range of outcomes that are consistent with the United Nations sustainable development goals.

However, I recognise that there is still much to be done to ensure that our country continues to flourish, while increasing wellbeing for all and tackling the global climate emergency. The greatest challenges that we face in being able to deliver the Scotland of our ambitions are the constraints on the powers of this Parliament, which are compounded by the current uncertainty that is being created by Brexit and the UK Government.

On 30 May, in an open letter to the ever-growing list of candidates who are seeking to become the next leader of the Conservative Party and the next Prime Minister, Carolyn Fairbairn, the Director-General of the Confederation of British Industry, said of where we stand with Brexit:

“Prolonged uncertainty is damaging our economy now—driving up costs and reducing sales. Stockpiling of raw materials and goods among SMEs is at a record high. Billions of pounds in investment are being diverted from the economy, harming future jobs and prosperity.”

Those words resonate with this Government’s analysis and with what we hear from business. A no-deal Brexit remains a significant and live risk that would impact significantly on the Scottish economy through disruption to logistics, supply, trade, investment, migration, skills and market confidence. Brexit is already impacting negatively on the confidence and security of our businesses, regions and communities in Scotland.

Photo of Dean Lockhart Dean Lockhart Conservative

Last week, the Fraser of Allander institute highlighted that Brexit is a UK-wide issue. Why is Scotland’s economy forecast to continue to underperform the rest of the UK?

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

Mr Lockhart says that Scotland underperforms the rest of the UK. However, I was just about to set out the strengths of the Scottish economy. I noticed that there was a distinct absence of that in Dean Lockhart’s opening speech and in his motion.

For the record, Scotland’s economy is growing, unemployment is at a record low, exports are growing faster than anywhere else in the UK and productivity is increasing. Over the past year, the number of people in employment has risen by 23,000; our exports of goods grew by 6 per cent, which was faster than in any other country in the UK; productivity has grown by nearly 4 per cent, compared with 0.5 per cent in the UK as a whole; and business research and development has increased by almost 14 per cent, exceeding the growth of 2.9 per cent that was experienced in the UK. That is the reality of the Scottish economy, not the doom and gloom that Mr Lockhart persists in speaking of in this chamber.

Speaking of doom and gloom, I give way to Neil Findlay.

Photo of Neil Findlay Neil Findlay Labour

Will the minister reflect on what has been done in New Zealand, which has proposed budgets based on wellbeing rather than the continued pursuit of economic growth as a Government objective, which clearly runs contrary to sustainability principles?

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I do not concur that it contradicts sustainability principles. The record on our ambitions with regard to a sustainable and inclusive form of economic growth is well laid out. I may have been uncharitable about Neil Findlay’s intervention, because I think that what has been explored in New Zealand is worthy of our exploration here. I refer the member to my opening remarks, when I said that issues of wellbeing around economic growth are firmly laid out as part of the national performance framework.

It is important to lay out, as I did a few moments ago, that Scotland has the sound economic and labour market foundations to move in a different direction in an inclusive fashion. We have a commitment to inclusive growth, which combines increased prosperity with great opportunities for all and distributes the dividends of that prosperity fairly—I am sure that that will be welcomed by Mr Findlay and other Labour members.

Again, let me say to Dean Lockhart that I do not recognise his characterisation of Scotland’s skills system. I am in the fortunate position of being able to get out and about across the country to engage in the school and college environments and with young and not-so-young people, who are undertaking a variety of training. Every day, I see excellence and people’s commitment to equip themselves with the skills that they need.

However, I recognise that we need to do more, by responding to technological disruption and demographic change, to ensure that people are equipped for our society and for the economy of tomorrow. In recognition of that, we have committed to introducing a future skills action plan, which we will publish shortly, and we continue to engage with the Scottish Trades Union Congress and the CBI on their proposition for a national retraining partnership.

The title of today’s debate is rather more positive than the Conservative motion. I believe that Scotland can realise its potential. I believe that it can best do so by being an independent country with membership of the European Union. However, in advance of that happening, the Government will be ambitious for Scotland and will continue to work tirelessly, day in and day out, to ensure that we have a sustainable and inclusive economic future that works for all the people of this country.

I move amendment S5M-17504.3, to leave out from “with concern” to end and insert:

“that the National Performance Framework’s purpose is to create a sustainable and inclusive economy that increases the wellbeing of people living in Scotland, with outcomes aligned to the UN’s Sustainable Development Goals; recognises that Scotland’s GVA per head is the third highest in the UK behind only London and the south east of England; recognises that productivity growth in Scotland has been 0.9% per year since 2007, compared with 0.2% per year for the UK; acknowledges that unemployment in Scotland is the lowest on record at 3.2%, which is lower than the UK rate of 3.8%, but, in recognition of the need to make sure that Scotland’s labour market works for all, supports efforts to make Scotland a Fair Work Nation as set out in the Fair Work Action Plan; welcomes that the Scottish Government is on track to meet its target of 30,000 modern apprenticeship starts per year by the end of the current parliamentary session; notes that the Scottish Fiscal Commission has downgraded its growth forecast as a result of continued Brexit uncertainty, and considers that Scotland’s sustainable economic future is best served as an independent member of the EU.”

Photo of Richard Leonard Richard Leonard Labour

The Scottish Labour Party is always happy to take any opportunity to make our case for real and radical economic change, for more investment and less austerity, for more planning and less market, and for more democracy, because too much economic power rests in too few hands.

I am bound to begin by making a couple of points to the Conservatives, who called for this afternoon’s debate. First, they are of course right to remind us that, in the last quarter, Scottish gross domestic product growth once again lagged behind total UK GDP growth. However, they should not be supercilious. Last year, output from the manufacturing base in Scotland rose by 2.6 per cent, but output from the UK as a whole contracted by 1.3 per cent. It was only through a growth in services that the UK rate of output moved marginally above the Scottish rate of output.

Secondly, although it is of course good to see a Conservative representative move a motion in this Parliament in favour of a “high-wage economy”, it is a pity that, where they are in Government, the Conservatives will not support a real living wage. They have presided over the biggest fall in real wages for 200 years; not since the great slump of 1798 to 1822 have we seen a wage squeeze quite like it. More than a decade on from the financial crash, the wages of working people are still stuck below the levels that they were at before the crash. The shameful result is that one in four children in Scotland lives in poverty, and two out of three of them are brought up in poverty in households in which at least one adult is in work.

Photo of Elizabeth Smith Elizabeth Smith Conservative

I do not doubt the seriousness of the member’s comments, but does he realise that economic growth is paramount to address those concerns and that Labour’s policies of high taxation would undermine such growth?

Photo of Richard Leonard Richard Leonard Labour

The critical issue is the distribution of economic benefit from economic growth, which is one of the fault lines in our society.

We say to the Scottish Government that the last thing that we need is yet another referendum on the creation of a separate Scottish state. Let me say to the ministers and their party that the people of Scotland do not want yet another referendum on the creation of a separate Scottish state. The figures that the Scottish Government produces tell us that Scottish exports to the European Union were worth £14.9 billion in 2017, whereas our exports to the rest of the UK were worth £48.9 billion in 2017. In other words, our exports to the rest of the UK are worth three times more than our exports to the whole of the European Union put together, which is why we want to remain in the European Union as well as in the United Kingdom union. There are too many national boundaries, not too few; we should be breaking down barriers, not building them up.

The long-term structural weaknesses of the Scottish economy—slow growth and poor rates of investment, a narrow export base, too narrow a concentration of research and development spending, an overreliance on foreign direct investment, endemic low pay and low productivity—do not remain unaddressed because we do not hold the powers in the Scottish Parliament. They remain unaddressed because the current Scottish Government has failed to use the powers that the Parliament has got.

We could have a Scottish industrial strategy in which the Scottish Investment Bank does not just respond to market failure but is a proactive catalyst of economic change. Led by a Government that is prepared to act and not just react, we could have a properly resourced Scottish economic development agency, as well as one for the Highlands and Islands and the south of Scotland. We could have the institutional and investment firepower to diversify our export base and boost R and D.

We could use the powers of public procurement and skills development to better plan our economy in co-operation with trade unions and businesses. We could make the just transition to the sustainable economy that we need to make in the face of the climate emergency. Finally, with an alternative economic strategy, we could spearhead a radical reduction in inequality. That is something that the Government’s own poverty and inequality commissioner has today chastised it for failing to do. In his words:

“very little has changed” to stop

“the rising tide of in-work poverty”.

It is time for a wholly new approach. It is time to end the low pay economy and the failed policies of neoliberal economics. It is time for us to develop a policy that is based on economic diversification and economic democracy, which promotes new forms of ownership as part of a new economic strategy and plan—an economic strategy that puts people first and an economic plan for real change.

I move amendment S5M-17504.4, to insert at end:

“; recognises concerns that Scotland’s economy would be further impacted by uncertainty from another referendum on independence; considers that any such referendum would be a distraction from the issues facing the people of Scotland; believes that the failure to create a Scottish industrial strategy has resulted in low earnings and stagnated economic growth, in particular failing to deliver the much-needed green jobs promised to Scotland, and therefore calls on the Scottish Government to deliver an industrial strategy to a create well-paid jobs and to grow and sustain viable enterprises.”

Photo of Patrick Harvie Patrick Harvie Green

What are the timings for speeches, Presiding Officer?

Photo of Christine Grahame Christine Grahame Scottish National Party

I am sorry, Mr Harvie, I thought that you knew. Mr Harvie and Mr Rennie, you have four minutes, but there is time for interventions.

Photo of Patrick Harvie Patrick Harvie Green

Thank you, Presiding Officer.

On one level, I welcome the fact that the debate is beginning to include a wider range of views on the wider question of economic growth—its meaning, role and place in our economy. For a long time, only the Greens raised an objection to the fixation on economic growth and the primacy that the GDP metric is given in our economy. Relentlessly chasing after economic growth measured in GDP terms has always prioritised private riches over public wealth. It is inextricably linked to climate change and biodiversity loss from the fragmentation, pollution and degradation of habitats, the extraction and depletion of finite resources, and the exploitation of human beings around the world.

GDP growth fails to capture inequality, economic justice, people’s health, the state of our environment or wellbeing. It also fails to recognise the need to share economic benefits or to protect people from the consequences of economic activities. I am not surprised that the Conservative Party has not yet joined us in that deep debate about the meaning and role of GDP growth, although more and more people are having that discussion.

I was interested that Neil Findlay raised that question, too. Although the Labour Party amendment mentions economic growth, there is much in the second half of it that I can agree with. We are not going to agree on the independence question—not at this stage, although perhaps, one day, more people in Labour will come with us on that. However, even if they do not come all the way, there is a lot more that we could be doing to address low wages. We could be doing that here and now if the Labour Party had backed devolution of employment law in the debates in the Smith commission. We could have repealed anti-trade union legislation to help to restore the balance of power in the workplace. Even if the Labour Party does not join us in arguing that independence should be the ultimate trajectory for Scotland, I hope that it will come at least so far as to say that we should be seeking control of employment law.

I have mixed feelings about the Government’s amendment. It is clearly a significant improvement on the motion. It recognises that we should not just trumpet low unemployment and high employment rates, because we need to acknowledge that the canard that work is the route out of poverty no longer applies. That notion is broken. We know that a huge proportion of the poverty in our society is in-work poverty, so the quality of employment matters, too.

However, the amendment describes how the national performance framework should work, not how it works at the moment. The NPF still prioritises and places far too much emphasis on GDP growth. Moreover, the measurements of progress against the NPF show close to zero progress on issues such as poverty wages and income inequality.

The Green amendment, which was not selected for debate, agreed that a new policy framework and a new direction are necessary but asked: to what end? Just to race ahead with more GDP at any cost is not the approach that we should be taking. Instead, we should be learning from the likes of the enough coalition

, which was launched recently. The coalition questions the notion of growth and asks: what is real prosperity? How do we create it and share it, without continuing today’s extractive, polluting and exploitative economy?

I look forward to the debate continuing. I am certain that those questions are the ones that all political parties will have to face up to in the coming years and decades.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I was pleased with Richard Leonard’s speech, because he gave an unequivocal position on Europe. That is to be welcomed. I waited for the caveat that I thought might come, but there was no caveat, which I hope is a positive sign that Richard Leonard will try to influence Jeremy Corbyn in London to adopt a similar position, because we are coming to the critical point at which the Labour Party needs to stand up on Brexit, which is critical to the whole debate about skills, the economy and opportunities in the country. I welcome Richard Leonard’s contribution and I hope that it has an effect elsewhere.

Photo of Neil Findlay Neil Findlay Labour

Will the member take an intervention on that point?

Photo of Neil Findlay Neil Findlay Labour

What influence did Mr Rennie have over the coalition Government, of which his party was a member, which cut budgets in all those sectors across the UK?

Photo of Willie Rennie Willie Rennie Liberal Democrat

That was a nice try from Neil Findlay, but this is a debate about the economy and the future of this country. We can have another debate about the matter that he raised, any time that he wishes. I would be delighted to have that debate. I would also be delighted to debate the performance of the Labour Opposition on Brexit over the past three years, which has been woeful.

We need to focus on the big challenges that Scotland faces. I believe that the answers lie in participation in our economy, which helps the economy to grow while providing opportunities for individuals to succeed. That is why we are strongly in favour of early intervention, particularly through nursery education and in the context of the pupil premium—or pupil equity fund, as we call it in Scotland—which give young people the foundation that they require if they are to grow their skills and get work in future. Participation is the answer to questions about the sustainability of our economy and opportunities for everyone.

I have to say that the start of this debate involved a fruitless trading of statistics on performance. There are marginal differences on growth, productivity and employment, and it is pointless to argue about them as though they were significant. We need to recognise that our economy faces a massive hurdle—indeed, there is a massive cosh over it, because of the threats of Brexit and independence.

Both threats are as bad as each other, and both governing parties are as bad as each other if they think that the differences that they highlighted are significant. We need to recognise that the constitutional upheaval that has been imposed on our country over the past 10 years has had a significant impact on our economy and that we need to make it stop if we are to give people the opportunity to achieve more.

Skills and workforce shortages are at the heart of our problems in this country, too. Today I met pharmacists—there is a big shortage of pharmacists. Yesterday, I heard about the massive shortage of general practitioners in our country. There is a massive shortage of nurses. Processing businesses are struggling to get the workforce that they need. Farms and the hospitality sector are also struggling. There is a shortage of engineers.

There are massive shortages of skills and workers, throughout the country. That is partly to do with fears about freedom of movement and our cutting off opportunities to attract people from other parts of the globe, including Europe. However, some of the problems are born here. We heard this morning about the colleges that are having real problems with their finances. That has gone on for years. We know that, year after year, the SNP Government cut a massive number of college places, and the effects are still being felt. The apprenticeship levy is not working either. Businesses tell me that because of the levy, they are cutting their training budgets rather than increasing them. If that is the effect that the levy is having on training in our businesses, it is not working.

My final point, which I hope the minister addresses in his conclusion, is that the last time that we debated this, Jamie Hepburn said that there would be immediate action to clamp down on regional selective assistance grants going to businesses. I have not yet seen any evidence that any action has been taken. There was a debate about whether it was a pilot. I would be interested to get an update on that.

Finally, 99 per cent of businesses in Scotland have not signed up to Jamie Hepburn’s business pledge. Have more of them signed up since the previous debate?

Photo of John Mason John Mason Scottish National Party

I am pleased to take part in this Conservative debate on the economy. I will first focus on the part of the motion that talks about

“the need to address the skills gap in the economy”.

As others have said, it is true that there are skill shortages, but that is not because we have loads of unemployed people—unemployment is at a record low of 3.2 per cent—or people with the wrong skills. Rather, the biggest problem is that there is a lack of people. When we went into the union, in 1707, we had something like one fifth of the population of England; now it is more like one tenth. It is very hard to grow an economy if the population is not growing. It is a failure of the British project since 1707 that England’s population has grown much more than Scotland’s. Scotland has been let down.

Agriculture, construction and tourism are all sectors that are dependent on EU and other workers coming to Scotland. Tourism specifically is worth some £9.7 billion to the economy, and EU citizens are reckoned to make up 13 per cent of the local tourism workforce, 15 per cent of the workforce in the accommodation sector and 19 per cent of the workforce in hotels and restaurants. If boosting Scotland’s economy is linked to growing Scotland’s population, how can we boost the population? Well, how about being part of the European Union, which would allow the free movement of workers? How about relaxing our immigration policy so that more people can come here and work?

Of course, the UK is going in exactly the opposite direction. The UK wants to leave the EU, stop free movement and tighten immigration policies. Therefore, it seems that the UK is deliberately following policies that will damage the Scottish economy. Is the UK Government consciously following a policy to damage Scotland? Even I do not think that it is quite as bad as that, but, at the very least, the UK is pursuing policies without considering their negative impact on Scotland.

Photo of Dean Lockhart Dean Lockhart Conservative

I would like to bring John Mason into the 21st century by referring to last week’s Scottish Fiscal Commission report, which blamed the £1 billion black hole in the Scottish budget on low wages and the fact that there is now a low-wage and low-skilled economy. Does John Mason not think that the priority is to focus on increasing skills and skills participation in Scotland?

Photo of John Mason John Mason Scottish National Party

If the people are not there, I do not know how we can improve their skills. However, I am happy to make some comments about training in a moment. Bringing the discussion right up to date, the member might note that, this afternoon, at approximately 2.32 pm, NFU Scotland issued a press release about the lack of people to work in the agricultural sector. Perhaps his party should be a little bit more worried about that.

When the Economy, Energy and Fair Work Committee conducted its inquiry into the Scottish economy a few months ago, we found that it compared very favourably with those of most of the English regions, Wales and Northern Ireland. However, we are always struggling to compete with London and the south-east. As the Lib Dems have said, London is like a black hole, sucking the life out of the rest of the UK.

The spread of the skills that are available in our society is an issue that the Economy, Energy and Fair Work Committee has touched on as part of our inquiry into the construction sector, the report on which will, I hope, be published in the next few weeks. We have heard that there is a shortage of several skills, including technical skills. In their evidence, young people have told us that the schools push university far too much and treat trades as a last resort. That should not be the case. We want able young people to be spread across our economy, and it would not be ideal if every young person went to university. If the Conservatives are arguing that more and more young people should go to university, I, for one, would question that.

The Deputy Presiding Officer:

The member is in his final 30 seconds.

Photo of John Mason John Mason Scottish National Party

It is also worth considering the gender stereotypes that are still having an impact on the choice of career of many young people. The economy as a whole is losing out because women are not setting up their own businesses at the same rate as men, nor are they going into science, technology, engineering and mathematics subjects or construction trades as much as men are. We must accept that that is a challenge for businesses, schools, colleges, Scottish Enterprise and others to take up. I was interested in the evidence from City Building in Glasgow, which said that, although it trains only 4 per cent of all the craft apprentices in Scotland, it trains 20 per cent of all the female craft apprentices.

There is a lot to be done, but my key point is that we need more people in this country, so we must allow immigration.

Photo of Elizabeth Smith Elizabeth Smith Conservative

It goes without saying that the ability to harness the vast pool of diverse skills in the working population of any country matters hugely to the likely economic success of that country. It also goes without saying that Scotland has a very proud history when it comes to the mobilisation of her workforce and that we are extremely lucky in modern times to be sitting on huge potential because we have so many different companies that are at the cutting edge of enterprise and innovation, whether in engineering, food and drink, digital technology or medical science. Just yesterday, I had the privilege of visiting the maritime department of the City of Glasgow College, where I saw at first hand the expertise that makes it one of the top five colleges in the world for marine engineering.

We should be clear about the fact that the potential for Scotland to lead the world in so many different sectors is immense, but we should also be clear about the challenges that we face in delivering success. The first of those is the fact that, as the recent Institute for Public Policy Research Scotland survey predicts, by 2030 Scotland will be short of 410,000 skilled workers. That skills gap is costing Scottish organisations £350 million per year according to the Open University. We know, too, that the size of that shortage has doubled since 2011, which is undoubtedly a reflection of the fact that four fifths of Scottish businesses are reporting recruitment difficulties in one form or another.

However, the debate is not just about the numbers; it is about having the right skills and, of course, tapping into as-yet-unused or underutilised potential. For example, the oil and gas sector, which is one of Scotland’s best assets, reports that just under half of its companies are having to deal with shortages in key disciplines such as engineering, information technology and technical skills. It is no coincidence that the Parliament’s Education and Skills Committee begins its inquiry into STEM education tomorrow, in order to understand better why Scotland is failing to recruit more STEM graduates. The committee will look at STEM education in schools, including whether there is any direct correlation between the take-up of such subjects and subject availability and choice, what the barriers are to many women entering STEM professions and why key sectors are failing to attract a sufficient number of quality STEM graduates. Those are serious questions, given the rich potential of our country.

The other worry must be the growth in the number of university graduates who end up in low to medium-skilled jobs when it is clear that Scotland is in greater need of filling higher-skilled jobs with the necessary expertise. Since 2011, the number of university graduates who enter low to medium-skilled jobs has risen from 15 per cent to 19 per cent, and there has been a rise in the number of pupils who leave school with no qualifications at all. That is an added concern that we must take seriously.

That is just one of the powerful reasons for ensuring that all young people are actively involved in training until they are 18 and that we tackle head-on the concerns of entrepreneurs such as Jim McColl, who believe that we need to do much more to encourage young people to achieve positive destinations. Through Newlands Junior College, Jim McColl has done his level best—against some very disappointing opposition—to provide much richer training experiences for young people who have become wholly disengaged from school. We believe that his ideas have considerable merit when it comes to expanding the skills participation programme.

Surely, we need to complement the increased motivation for the majority of young people to stay on in school and training with quality opportunities for those who presently leave school with very little to their name and very little opportunity to succeed in the future. That is why the Scottish Conservatives want to increase the training participation rate among those who have not secured an apprenticeship, college place or university place and among those whose circumstances prohibit their undertaking additional training.

My colleague Dean Lockhart is absolutely right to talk about economic policies, but the skills base of our working population must be at their core.

Photo of Gordon MacDonald Gordon MacDonald Scottish National Party

The latest GDP growth rates, which were issued in May for quarter 1 of 2019, indicate that the UK’s GDP grew by 1.5 per cent. In conjunction with the Office for National Statistics, the Economic Statistics Centre of Excellence has estimated that Scotland’s growth rate was 2 per cent, which was the third highest growth rate of the 12 regions of the UK.

The “State of the Economy” report that the Scottish Government’s chief economist issued in February 2019 opens with the words:

“Overall, 2018 has been a positive year for the Scottish economy, with growth returning across all sectors of the economy, the labour market delivering record levels of performance and further growth in exports.”

A House of Commons library briefing that was published in September 2018 showed that average Scottish regional growth between 1999 and 2016, based on annual gross value added growth, was 1.9 per cent per annum. That was the same as the UK’s rate and was exceeded only by that of London, which was 3.1 per cent.

Growth in Scotland’s economy is driven by consumer spending, business investment, Government spending and export activity. A lack of confidence because of the Brexit referendum resulted in annual GDP growth in Scotland and across the UK dropping significantly in 2016 and 2017. However, there is no mention of that in the Tories’ motion. The motion highlights productivity and wage growth, and the latest data on productivity for Scotland show a significant rise in 2018. Productivity was up 3.8 per cent, which compared with a rise in UK productivity of only 0.5 per cent.

Photo of Gordon MacDonald Gordon MacDonald Scottish National Party

No.

Since 2007, productivity in Scotland has increased by 10.8 per cent, which compares with a 2.7 per cent increase in the UK. In 2018, Scotland’s productivity was 96 per cent of that of the UK—up from 89 per cent in 2007 and 90 per cent when the Scottish Parliament was created. The latest regional productivity analysis, which was released in February, highlighted that Edinburgh was performing 24 per cent better than the UK average and that Aberdeen and Aberdeenshire were performing 13 per cent above the UK level. On international comparisons, Scotland has higher productivity than Italy, Spain, Canada, Japan and New Zealand, to name but a few countries.

On the level of wages, the House of Commons library has highlighted that, under the SNP Government, from 2007 to 2018, wage growth in Scotland—taking the median weekly pay for full-time employees—was 28 per cent, which was four percentage points higher than the UK average of 24 per cent. The increase in the median wage in Scotland over those 11 years was the largest in Britain—it was larger than the increases in London and all the other eight regions of England, which were controlled by the Tories.

Of the 11 regions in the UK that the ONS compared, Scotland had the second lowest percentage of jobs that paid below the real living wage. At 22 per cent, that figure is still too high but is substantially lower than the figures of 29 per cent in the East Midlands and 28 per cent in Wales.

Those improvements in Scotland’s economy are now under threat. The chief economist has stated that

“a no-deal Brexit remains a significant ... risk and would lead to a major dislocation to the Scottish economy.”

A report for the GMB by the Fraser of Allander institute that was published in April found that the European Union is Scotland’s principal international trading partner and that Scotland exports nearly £15 billion of goods and services there. More than 45 per cent of Scotland’s international exports go to the EU, with nearly 144,000 jobs having been linked to EU demand for Scottish exports in 2015. Last week, the independent Scottish Fiscal Commission reduced its growth forecasts for 2019 and 2020 as a direct result of continuing Brexit uncertainty, with no deal being worse than its current projections.

The Deputy Presiding Officer:

There, I am afraid, you must conclude.

The Deputy Presiding Officer:

No. When I say you must conclude, you must conclude. You have had more than your time.

Photo of Alex Rowley Alex Rowley Labour

In order for Scotland to realise its potential, we must ensure that Scotland’s greatest assets—its people—are able to achieve their full potential. For far too many people in Scotland, that is not happening. In further education, we have seen massive cuts from the SNP Government—cuts that have had a detrimental impact on colleges and college places, and particularly on places for adults.

We have to recognise that at the heart of any industrial strategy there must be a link to education and skills, and that in the modern economy skills and reskilling are essential for good jobs and a high-waged, sustainable economy. Across Scotland, we are seeing cuts to school budgets as local education authorities struggle to balance their books. The Tory motion talks about a

“comprehensive new approach to skills and training”, but we know that the plans that the Tories set out for Scotland in the Scottish budget debate would have led to deeper cuts in public services. We cannot make changes or deliver skills or education on the cheap. It is therefore quite staggering for a party that has cut taxes for the better off, given handouts to big businesses, failed to tackle tax avoidance, chosen to force austerity on the poorest and created Brexit in order to sort out internal division to come here today to talk up their economic credentials.

Photo of Alex Rowley Alex Rowley Labour

I am sorry, but I have only four minutes. The Tories should have put in for a longer debate.

I n the time I have left, I want to touch on the Labour amendment and, in particular, another independence referendum. My view is that any attempt to hold another independence referendum without knowing the full implications of Brexit would be irresponsible. Even if a Brexit deal is reached this year, which is unlikely, we will not know enough about the consequences of Brexit to make an informed choice in any independence referendum that takes place before 2021. England, after all, is our largest trading partner, so I ask the SNP Government to think again, take the issue of indyref 2 off the agenda and seek a fresh mandate in 2021, if at that point it still believes that that is the best way forward.

Photo of Alex Rowley Alex Rowley Labour

I have only four minutes.

I do not believe that any politician can tell the people of Scotland that they cannot have a referendum if there is clear majority support for one, but right now, given all the uncertainty, the threat to jobs and the unacceptable cuts that have taken place in public services, there is no appetite for more uncertainty, disruption and division. The majority of people in Scotland want us to get on with fixing those issues.

I say to the SNP that proposing another referendum is music to the Tories’ ears. They do not want to talk about failed Tory austerity, failed welfare reform, failed energy policy and so on. They do not want the people of Scotland to know that under Scottish Tory plans there would be even deeper cuts to public services in Scotland, so they are happy to frame the debate around the constitution. The Tories are happy to stoke division, for it creates a smokescreen that hides their failings from the people of Scotland and the UK.

Let us focus on the big issues impacting on people and communities and get those issues sorted. That is what the people want.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

When I saw the titles of the two debates today, I thought that they might be quite serious in nature, but unfortunately for the Tories, it has been one of those days of knockabout politics.

Earlier, we heard the Tory claims about the whole-life sentences that would happen under a Tory-led Scottish Government. Unfortunately, in this debate about Scotland’s economy, once again the Tories have talked down Scotland’s economy, to feed into the narrative of the so-called strong and stable Tories who know best.

Photo of Dean Lockhart Dean Lockhart Conservative

I highlight to the member that we are not talking down Scotland’s economy; we are talking down the SNP’s performance over the past 12 years. We now see a £1 billion hole in the public finances that will have a direct impact on public services in Scotland.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

Mr Lockhart obviously forgets that that is a forecast about the future. We already know, because of their plans for this year’s budget, that if the Tories were in power, there would be a £500 million cut to Scotland’s budget.

Let us look at the record. Under the SNP, Scotland’s economy is growing faster than that in the rest of the UK; unemployment is at a record low; exports are growing faster than of the rest of the UK; and productivity growth is outpacing that in the rest of the United Kingdom. That is positive, but there is still more to do. It is not a bad record, but nobody can be complacent, and I know that the Scottish Government is certainly not complacent.

The biggest threat to our economy is Brexit, and no matter how many legions of Tory MPs put their names forward to captain the political equivalent of the Titanic, it is clear to almost everyone that Brexit will have economic consequences for all parts of the UK, particularly if it is a no-deal Brexit. On that point, I do not know whether the Tories are aware of this, but in the European election last month, Scottish voters gave the Tories their worst result in a national election since 1865. I think that that tells a story about what the Scottish voters think about them.

We have heard from the Tories about last week’s report from the Scottish Fiscal Commission, but the SFC reduced its forecast as a direct result of the continuing Brexit uncertainty and a no-deal option that was worse than its current projections.

The Fraser of Allander institute has suggested that a no-deal Brexit could push Scotland into recession, highlighting the challenges to Scotland’s economy. According to the ITV news website on 18 April, Graeme Roy said:

“The lack of clarity about the UK’s terms of exit from the EU continues to cast a shadow over day-to-day decision making, with businesses clearly struggling to make long-term plans in such times.”

Scottish Government analysis also suggested that Scotland would go into recession and that unemployment would increase by up to 100,000.

In earlier comments, Dean Lockhart spoke about it being a dereliction of duty by any Government to reduce the skills and training of its young people. I hope that that is an admission of guilt from the Tories, and an apology for what they did to the population of Scotland—and the rest of the UK—when they came to power in 1979, cut apprenticeships across the board and introduced a youth training scheme.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

I am sorry, but I do not have any more time. I have taken an intervention from Dean Lockhart already, and I am conscious of the time.

Scotland has a good story to tell, but there is still more to do. Liz Smith spoke about skills shortages. That takes us back to the point that the Tories cut apprenticeships, which led to some of the skills shortages that Scotland and the UK have faced over the last 20 to 30 years.

There is still more to do, but I encourage colleagues in the chamber to reject the Tories, just as the population of Scotland have, and to back the Scottish Government’s amendment.

Photo of Gordon Lindhurst Gordon Lindhurst Conservative

The debate comes at a critical time for Scotland’s economy. As the convener of the Economy, Energy and Fair Work Committee, I am acutely aware of the challenges facing our economy in the coming years. Representing the capital and the wider Lothian region, I think that we can be at the heart of an economic revolution, but that will require a bold economic vision.

It is clear that a skills shortage is severely hampering future growth prospects, and that is why the Scottish Conservatives are using this debate to outline policy that is led by a focus on technology, innovation, global trade, employment and regional growth.

We plan to introduce a new skills participation age, so that everyone up to the age of 18 is required to go to school, college or university, or, if they want to start work, to do so through a structured apprenticeship or traineeship.

There has been too much focus on pushing our youngsters through to university. That may be appropriate and it can work for many, but there needs to be a shift away from seeing vocational education as the poorer relation of the academic route.

Photo of Tom Arthur Tom Arthur Scottish National Party

Would the proposal that the member has outlined still allow 16 and 17-year-olds who wish to start their own businesses to do so, independently of his scheme?

Photo of Gordon Lindhurst Gordon Lindhurst Conservative

Yes, it would.

With the IPPR highlighting a worker shortage in Scotland of 410,000 by 2030, we need to give businesses the support that will bolster skills training. The skills shortage has doubled since 2011 on the SNP’s watch; in 2018, 6 per cent of employers reported vacancies linked to the skills shortage, with such vacancies at STEM employers also on the increase.

I am therefore pleased that the UK Government has provided £270 million for data skills training over the next decade, as part of the Edinburgh and south-east Scotland city region deal. The data innovation project will train 100,000 Scots and ensure that the country can be at the forefront of exciting technological advancements. That needs to be combined with a boost in productivity, which has been one of the SNP’s greatest failures when it comes to our economy.

Scotland has not progressed up productivity league tables, despite the number of hours that Scottish workers work being the highest since 1998. It is time that Scotland had an economic plan that gives a lifelong skills guarantee to anyone who wishes to retrain or upskill during their career. That would give businesses confidence that they can provide workers with greater opportunities, especially low-paid and low-skilled workers, whatever their age and whatever stage of their career they may be at.

During its 12 years in charge, the SNP Government has presided over many failures when it comes to delivering for Scotland’s economy. In 12 out of the last 15 economic quarters, growth across the UK has outpaced that in Scotland—a trend that is set to continue until 2023.

Scotland’s economy continues to stagnate under the SNP, which continues to create uncertainty with its plans for independence and referenda as well as making us the highest taxed part of the UK and failing to seriously address the major skills shortage that is facing our economy.

That is the challenge for the SNP in the coming years—otherwise, Scotland’s economy will continue to lag behind not only the UK but other equivalently sized European nations.

Photo of Clare Adamson Clare Adamson Scottish National Party

I have been listening with interest, and it seems that the Tories want to talk about everything but Brexit this afternoon. There is certainly no mention of Brexit in the Tory motion.

They should reflect on their dreadful performance in the European Parliament elections just a week ago.

Photo of Dean Lockhart Dean Lockhart Conservative

The Fraser of Allander institute said last week that Brexit is a UK-wide issue. Can Clare Adamson explain why Scotland is underperforming compared with the rest of the UK and will do so for the next five years?

Photo of Clare Adamson Clare Adamson Scottish National Party

I do not agree with Dean Lockhart’s assertion. We do not control all the powers that we need to grow Scotland’s economy. I will outline reasons for the Westminster Government’s failure in this area.

We are in a parliamentary chamber—not an echo chamber for the Tories’ empty rhetoric. If they will not listen to the verdict of the Scottish people, they should listen to our universities, our medical staff and our science and technology professionals, who tell us that the biggest threats to our economy and to skills are Brexit and the policies that have been adopted by the UK Government.

The issue is not just about the economy; it is also about demography. Scotland faces a big demographic problem that is intrinsically tied to our economic future. Ending of freedom of movement will not help, and the hostile environment will not help. Cancellation of the post-study work visa for our universities certainly did not help. It has been reintroduced for some universities down south, but where is the equity for Scotland in that? Another way in which Scotland has been disadvantaged, in the context of Brexit, is that the UK Government is talking about introducing three-year study visas for students, which completely ignores the fact that Scotland has a tradition of four-year undergraduate degrees.

The motion mentions growth. In 2018, GDP per person grew more rapidly in Scotland than it did in the UK as a whole. The motion mentions productivity. In 2018, Scotland’s productivity grew by 3.8 per cent, compared to 0.5 per cent for the UK as a whole. The motion mentions wages. In 2018, Scotland had the highest proportion of employees being paid the real living wage of all the countries in the UK, with a figure of 80.6 per cent. That is a success for Scotland.

The motion also mentions skills. Last Friday, I was privileged to witness the prodigious talent that was on display at the Scottish Council for Development and Industry’s STEM showcase in Glasgow. The event, which was run by the SCDI’s young engineers and science clubs programme, was a demonstration of the skills of the future, with more than 300 young people representing 50 schools demonstrating the skills that will take us into the fourth industrial revolution. The event was supported by business and by organisations including the Royal Society of Chemistry, and was an excellent example of what we are doing to ensure that the skills for the future exist here, in Scotland.

Dean Lockhart talked about second-chance centres and vocational schools. I say to him that all Scotland’s schools are vocational, because we are implementing the developing the young workforce programme. The programme will run until 2021, and our schools are embracing it, along with curriculum for excellence. Our young people can take up foundation apprenticeships and can work in college and school to do vocational courses. The Tories talk down that approach as somehow disadvantaging our young people. Let us get behind Scotland and our pupils and teachers, and let us get behind the spirit of the developing the young workforce programme, which seeks to do exactly what the Tories’ new ideas suggest. The Tories speak as if we are not doing anything, but we are getting on with the day job.

The Deputy Presiding Officer:

Excuse me just a minute, Ms Adamson. I am listening to you, but two front-bench members—I will not shame them by naming them—are talking across you, which is not polite, and I want them to stop.

Photo of Clare Adamson Clare Adamson Scottish National Party

We have a hulking spectre coming to haunt our doorsteps on Halloween. It is Brexit, and it is time that the Tories recognised the impact that it will have on Scotland’s economy.

The Deputy Presiding Officer:

I apologise for interrupting you, but members were just getting away with it, and that is not going to happen.

We move to the closing speeches.

Photo of Rhoda Grant Rhoda Grant Labour

To protect our citizens and to build a fair country, we need to get the economy right—to quote a phrase, “It’s the economy, stupid.” None of our aspirations can be realised without a fair and inclusive economy that meets our citizens’ needs. If people are not working and paying taxes, we cannot fund an inclusive welfare state. Daily, we see the failings that arise from not doing that. Last week, we learned that there is a black hole in the Scottish finances, and that the only way to plug it is to build the economy. We need an economy that is built on fair pay and secure employment.

There are many opportunities to do that, but instead of capitalising on them, we watch many of them go abroad while our Governments cause uncertainty at home with nationalist constitutional wrangling. It is time that the SNP refocused its efforts on the domestic issues at hand, rather than wasting time on a second independence referendum. We could be building our economy, but instead the SNP wishes to cause further chaos and uncertainty. Willie Rennie said that Brexit is “as bad as” independence, but if Brexit is bad, independence will be at least four times worse.

Jamie Hepburn talked about the constraints on the powers that he has, but the Scottish Government cannot set up a welfare system in the time that has been allowed, far less set up the institutions that we would need to run an independent country. The SNP should aspire to use the powers that we have before it asks for more.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

I was referring to our fair work agenda, our ability to implement the real living wage as a statutory minimum wage, and our desire to see the Trade Union Act 2016 repealed. Does Rhoda Grant regret that, during the Smith commission process, the Labour Party opposed devolution of employment law to the Scottish Parliament?

Photo of Rhoda Grant Rhoda Grant Labour

I wonder whether, had employment law been devolved, the Scottish Government would have been able to implement it. It has not been able to implement a lot of the powers that it received through the Smith commission process, and it has handed some back, so I would have no confidence in its being able to implement any other powers that it might get. Instead, it has given us a cuts commission, and under independence it would give us a decade of austerity and would cut off our biggest trading partner. As Richard Leonard told us, that would involve £14.9 billion-worth of trade with the EU and £48.9 million-worth of trade with the UK. How can the SNP think that our economy would work if we cut off our nearest neighbours?

Richard Leonard also spoke of the need for a Scottish industrial strategy. The Scottish Labour Party is firmly behind that, and it should be a top priority for the Scottish Government. We believe that it is time for a new approach to industry. We should rebalance and grow the economy differently, while retaining and building on the sectors on which Scotland once thrived, and of which it was proud, and we should pursue opportunities in new technology in order to broaden our economic base, and to help to pave the way for a green industrial revolution.

It is sad that the Scottish Trades Union Congress’s report has shown how past promises of employment in the low-carbon and renewable energy economy have not yet been delivered, and that the number of people who are employed in that economy has fallen.

Many members have spoken about the skills gap. I agree that our workforce needs to be better skilled. Alex Rowley mentioned the cuts that have been made to further education. It is not only young people who need skills in STEM subjects; people who are working also need to reskill in order that they can keep up with new technologies. We cannot afford to leave behind anyone in our economy.

To create a fairer society, we need to grow our economy. I agree with Patrick Harvie that using GDP to measure progress on that leaves much to be desired. We need to consider whether we could do something similar to what New Zealand is doing. However, we still need secure and well-paid jobs if we are to build our economy and share wealth and power. The Scottish Government has the levers to do that, if it would only use them.

The Deputy Presiding Officer:

Kate Forbes will close the debate on behalf of the Government. You have five minutes.

Photo of Kate Forbes Kate Forbes Scottish National Party

I will start on a point of consensus. Some good ideas have been debated today.

The debate has focused on the Scottish Government’s responsibilities for the economy. I am happy to concede that we should, because the Scottish Government has partial responsibility for the economy, celebrate our role in achieving record low unemployment, in exports growing faster than they are anywhere else in the UK, and in productivity increasing. As the EY attractiveness survey that was published today recognises, Scotland has proven strengths in its record on attracting new investment and in respect of the perception of Scotland as an investment destination. Just under a year ago, Barclays announced that it was setting up its tech hub in Scotland, thereby creating more than 2,500 new jobs. Further, last week, I welcomed the newest fintechs in Scotland. There is a lot to celebrate.

However, if we look at independent research from the Fraser of Allander institute or the Scottish Fiscal Commission, or if we speak to most businesses in Scotland, they would identify two key problems. As Stuart McMillan and Gordon MacDonald outlined, the first is Brexit. However, the second, which is particularly relevant to the debate, relates to restrictions on freedom of movement. No matter how hard Dean Lockhart tries to spin it or weasel out of it, the party that has brought the motion to the chamber is responsible for those.

Photo of Dean Lockhart Dean Lockhart Conservative

The minister mentioned the Fraser of Allander institute. Last week, it said that

Brexit is a UK-wide factor. The cuts to income tax that have been forecast by the SFC arise because income tax receipts per head in Scotland are growing more slowly than those elsewhere in the UK. Is that because the SNP has created a low-skilled and low-wage economy?

Photo of Kate Forbes Kate Forbes Scottish National Party

The fact that the Tories keep talking about a black hole, and displaying their misunderstanding of the whole concept of forecasts, shows that we should never let them near implementing economic policies.

The Fraser of Allander institute has shown that a disorderly no-deal Brexit could push the Scottish economy into recession. No matter how much Dean Lockhart tries to whitewash reality, he cannot get away from that independent analysis.

Liz Smith talked quite powerfully about the skills base and the need for STEM skills. Having responsibility for digital skills, I take a keen interest in those matters. Tech is forecast to be the fastest-growing sector in Scotland by 2024, and only last week I launched the new £1 million fund to upskill and retrain people, which will target in particular people who are in low-wage jobs or in no job, but who have aptitude, so that we expand the workforce.

The point of all of this is that the pace of change and the changing demand for skills mean that Governments need to be agile and quick to respond—not just the Scottish Government, but all Governments around the world.

However, unemployment is at a record low, with Scotland outperforming the UK on overall unemployment, youth unemployment and women’s unemployment. In the light of the figures, immigration is important. When I intervened on Dean Lockhart, in his answer he dismissed the need for immigration. That will not reassure the business community, which says that the UK Government’s immigration policy is “obstinate” and “economically illogical” and that it shows that the UK Government is

“hell-bent on ignoring the business community.”

Those are not my words; that was a quotation.

Photo of Dean Lockhart Dean Lockhart Conservative

Actually, I stressed the importance of immigration, going forward. I said that it is the primary responsibility of the minister’s Government to make sure that young people in Scotland are fully trained.

Photo of Kate Forbes Kate Forbes Scottish National Party

I do not dismiss the point about adequate training, which is why I talked initially about the need to retrain and reskill. However, Dean Lockhart cannot just dismiss the end of the post-study work visa, the minimum earnings level of £30,000 and the hostile environment as though they do not have a current and present impact on our skills base, as Clare Adamson powerfully set out.

We could dwell on the negatives, but we are getting on with supporting the economy. Last month, we published “A Trading Nation: a plan for growing Scotland’s exports”, which sets out how we will grow the value of Scotland’s exports as a percentage of GDP from 20 per cent to 25 per cent over the next 10 years. Over the next year, we will establish a Scottish national investment bank, with funds for precursor activities of £130 million. We will continue to support the building Scotland fund, which supports the Scottish economy through loans and equity investments. We have established the national retraining partnership and invested £6.3 million of capital in order to continue the national manufacturing institute for Scotland.

The Tories came to the chamber today with a wish list for a strong economy, but it was just a wish list. It utterly ignored both their role right now in jeopardising the economy, and the well-articulated views of the business community. We do not have a wish list: we have an action plan that is upskilling and retraining the workforce as well as boosting exports and supporting innovation.

The Deputy Presiding Officer:

Thank you. I call on Jamie Halcro Johnston to close for the Conservatives. You have until decision time, Mr Halcro Johnston.

Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

Thank you, Presiding Officer.

We have had a number of debates, in recent months, looking at aspects of Scotland’s economy. We have looked at trade, specific sectors such as energy, and—all too briefly, unfortunately—entrepreneurship. However, those are only small parts of a far larger overall picture. In bringing this debate to the chamber, we wanted to consider the deeper structural challenges that our economy faces, as well as the need for a fresh approach from Government.

Many of the problems are easy to identify. Scotland’s growth is predicted to lag behind that of the rest of the UK. Many employers report skills shortages in their sectors and have real concerns for the future. While we look to address the real issues that Brexit undoubtedly forces us to face, we have a Scottish Government that is obsessed—despite the minister’s rosy appraisal of Scotland’s economy—with adding to that uncertainty by pushing a damaging second referendum and building barriers with the UK, which is our largest trading partner.

Scotland must strive for economic growth, yet business confidence is low and the various strategies that the Scottish Government has produced have resulted in little real progress—just a far more cluttered landscape.

We hear again and again from businesses that the most important requirement for investment is a skilled workforce, and I am sure that many members across the chamber can agree on at least some of the principles, such as that we need to value vocational education at least as much as we value the more academic routes, that there must be recognition that the labour market is changing, that there are few jobs for life and that, over their working lives, most people will change jobs and even sectors a number of times.

Photo of Jamie Hepburn Jamie Hepburn Scottish National Party

Does Mr Halcro Johnston acknowledge that the Government recognises those issues, which is why we have established the developing the young workforce programme, to tackle the misperceptions about undertaking vocational education as opposed to academic education and, with regard to the wider challenges in having a skilled population, why we have committed to the new skills action plan and a national retraining partnership?

Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

I am happy to look at where the Scottish Government has taken action and praise it, but it has had 12 years to get this right and we are still in the same situation. The problem is that business does not think that it is going to get better in the future, and that is what the Government should be hearing.

There must be a real recognition that the labour market is changing and that there are few jobs for life. That is why we believe that a lifelong skills guarantee is so important. It will acknowledge that many people will have more than one career in their lifetime and that the ability for all to reskill is becoming increasingly essential.

As Dean Lockhart said, we want to see a new skills participation age and thereby ensure that everybody under 18 is in school, college or university, or is receiving structured training while in work. We want to ensure that no young person is left behind.

In several speeches in the chamber, I have emphasised the need for both a national and a local approach. Our economic statistics are generally national, and they often neglect the underlying problems in Scotland’s regions, as we heard in the Economy, Jobs and Fair Work Committee. For too many parts of Scotland, the experience of the past decade has been of being left behind. UK-wide measures, such as building a national living wage, have had a truly national impact, but the reach of many initiatives that have been heralded in the chamber are often slow to develop.

For example, foundation apprenticeships begin with a poor level of choice for pupils in many parts of Scotland outside the central belt. Today, there are still shortcomings, and some frameworks are simply unavailable in certain regions. More than ever, improving skills is an essential step towards solving our productivity challenge, raising incomes and building a strong economy for future generations in Scotland.

There have been some insightful, and some less-insightful, speeches today, and I am sorry that I will not have time to cover all of them. Dean Lockhart spoke about how, if Scottish growth had even kept pace with that of the rest of the UK over the past 12 years, our economy would be £7 billion larger. He highlighted that, although 43 per cent of businesses in our competitor countries embed digital in their operations, only a staggering 9 per cent of Scottish businesses do so. He laid out why we are proposing an institute of technology and e-commerce, which would have the aim of supporting between 2,000 and 3,000 businesses every year—[

Interruption

.]

The Deputy Presiding Officer:

Please sit down, Mr Halcro Johnston. You are not at fault. I give the usual Presiding Officer’s warning that is given at this time: members strolling into the chamber and saying hello to their pals is not on. I want to hear the closing speeches and members who have been present during the debate want to hear them. Wait until 5 o’clock. Thank you.

Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

I was just going to get louder and louder, Presiding Officer.

The new institute would have the aim of supporting between 2,000 and 3,000 businesses every year to access new markets by moving their business on to a dedicated e-commerce platform.

Gordon Lindhurst highlighted the need to boost productivity. He acknowledged that, despite the number of hours that Scottish workers are working being the highest that it has been since 1998, there has been no progression up the productivity league tables. Liz Smith spoke about the immense potential for Scotland to lead the world in many different sectors, but she also highlighted the challenges that we face. She and Gordon Lindhurst both referred to the recent IPPR Scotland survey, which warns that by 2030, we risk being short of 410,000 skilled workers. The Open University estimates that that skills gap will cost Scottish organisations £350 million every year.

At a time when we need young people to engage in more vocational courses, when we want to promote that crucial and rewarding route, and when we should be looking to create a parity of esteem between educational and vocational paths, it is disappointing that the Scottish Government has failed to properly support Newlands Junior College. Liz Smith is quite right that initiatives such as Jim McColl’s must be a crucial part of our skills offering in the future and must engage in particular with those who are currently disengaged from our schools.

Economic policy is about facing the future and seizing opportunities, rather than being overwhelmed by new challenges. In Scotland, we have many strengths, but we must not ignore our weaknesses. In every generation since the industrial revolution, the speed of economic change has accelerated. More than ever, it seems that the Scottish Government is simply failing to keep pace.

As Rhoda Grant suggested, it is not just about the economy. Many of the privileges that we enjoy as a society depend on our economic success. We can look starkly at recent forecasts from the Scottish Fiscal Commission about the impact that weak growth in income tax revenues will have on Scottish budgets.

For many years, the devolution settlement almost completely sheltered Scottish Administrations from the impact of their economic decisions. That time has passed and we now have an immediate and real need for investment in our economy. The stark truth is that, if the Government does not get it right, the Government will not be able to do or provide the things that it currently does. Trying to squeeze the same out of our devolved revenue powers will require more and more pain.

That is why we need a workforce that has the skills to participate in current and emergent sectors. That is why we need the support in place to ensure that workers can retrain when required, whatever the stage of their working career. That is why Scotland needs a Scottish Conservative Government that is willing and able to take on the opportunities of the future, and to build an economy that works for all of Scotland.