Chamber and committees

I can also confirm that stakeholders have noted that they are content for their responses to be provided to the Scottish Parliament for scrutiny, with the possibility that these may be published. A summary of our stakeholder engagement is attached separately for the Committee’s interest.

Late payments on commercial transactions

Jamie Hepburn MSP, Minister for Business, Fair Work and Skills wrote to the Convener of the Economy, Energy and Fair Work Committee on 19 January 2021 to provide an update. Unfortunately an approved provisional framework has yet to be received, therefore parliamentary scrutiny has been unable to take place.

Services

We have expressed reservations in respect of the utility of a services Common Framework, and in discussions with the Department for Business, Energy and Industrial Strategy (BEIS) and other Devolved Administrations (DAs) there has been no agreement on what such a framework would achieve. This is because most services either operate within the principles established under the EU Provision of Services Regulations (2009), as brought into UK law on EU exit, or operate under separate regulations, as is the case for financial services.

BEIS and the DAs will continue to discuss this matter, however there is recognition of the challenges that would arise from a decision to have a services Common Framework in place by the end of December 2021.

Mutual recognition of professional qualifications

Discussions regarding the Common Framework on Mutual Recognition of Professional Qualifications (MRPQ) are ongoing. Following discussions with the DAs on scope, BEIS has indicated that implementation of the UK Internal Market Act should not be included in the Common Framework. In these discussions, the DAs were, in principle, supportive of the idea of the MRPQ Common Framework being a means to facilitate more effective collaboration on Mutual Recognition Agreements through the UK-EU Trade and Cooperation Agreement process and the Common Travel Area.

There is uncertainty around the potential impact of the UK Government’s Professional Qualifications Bill on the MRPQ Common Framework, however BEIS has indicated that the part of the MRPQ Common Framework seeking to implement the provisions of the Bill would need to be kept under consideration as the Bill progresses through parliament, and possibly after the Bill has been given Royal Assent.

The UK Government and the DAs have previously committed to having an MRPQ Common Framework in place by the end of December 2021, though this is subject to the concerns outlined above.

Enterprise and Skills Review Board

As requested, please find attached separately a copy of the Enterprise and Skills Review Board’s Annual Analysis report.

Scottish Government Ownership Stakes

Following the work of the Advisory Group on Economic Recovery and the publication of the Scottish Government’s Economic Recovery Implementation Plan, we have undertaken work to investigate the capability and capacity required across all phases of a transaction, including response, advice and shareholding. This included the establishment of the short life working group.

One of the important lessons we have learned is the need to consolidate expertise and to transfer knowledge between the teams leading these interventions. One improvement has been in bringing together responsibility for management of the Scottish Government’s ongoing interests in Ferguson Marine (Port Glasgow) and Burntisland Fabrications Ltd (BiFab) into a single team, building on their existing commercial finance capacity and enabling the sharing of knowledge and expertise.

Additionally, in Spring this year we established a new division - the Rapid Response Division, whose consolidated expertise and capacity convenes a specialist response service when businesses are in distress and approach the Scottish Government with a request for support. These two teams are contained within the Covid Business Response and Support Directorate in order to maximise synergies and capacity, and capture learning in this area.

The Permanent Secretary provided an update to the Public Audit and Post-Legislative Scrutiny Committee on 19 February 2021, which welcomed the recognition from the Committee and the Auditor General on the improvements made in this area. She set out that further lessons would be learned from Scottish Government investments, and that these would be applied to support continuous improvement. I welcome this approach and would be happy to provide a fuller update to the Economy and Fair Work Committee if that would be helpful.

Financing Scotland’s Recovery Working Group

Our ten year strategy for economic transformation will set out how we can, in partnership with business, become a net-zero economy in a way that enhances prosperity, equality and wellbeing. Some of Mr Higgins’ future-focused recommendations will help to inform our thinking as we develop the strategy.

Throughout the pandemic, the Scottish Government worked closely with banks in Scotland to better understand how we could protect businesses and facilitate economic recovery.

Through the new Banking Barometer, we continue to engage with the main banks to monitor business liquidity. I have quarterly meetings with Scottish Financial Enterprise (SFE), and Ivan McKee MSP, Minister for Business, Trade, Tourism and Enterprise, will meet SFE monthly to discuss intelligence from the barometer, as well as our broader strategy for Financial Services.

My officials are working with SFE to reconvene the Financial Services Advisory Board (FISAB) imminently. We are committed to growing our Digital Financial Services sector, attracting new investment and good jobs to Scotland, building on commitments made by the likes of Barclays, JP Morgan and Morgan Stanley to their Scottish technology hubs.

Mr Higgins' report made a number of specific recommendations to the UK Government on the debt management of Covid-19 loan schemes. The UK Government acknowledged in a letter the points on forbearance and undertook to keep all measures under review. The Minister for Business, Trade, Tourism and Enterprise hopes to meet with HM Treasury shortly to discuss how the specific needs of the Scottish economy can best be understood as we move into the next phase of economic recovery.

Mr Higgins rightly identified the importance of recapitalisation across the economy in his report. Investing with Purpose, the Scottish Government’s Global Capital Investment Plan, focuses on leading with our best opportunities, identifying sectors where Scotland can demonstrate real international comparative advantage, mapped to strong global demand.

These principles are also reflected in the review of the Scottish Tech Ecosystem that I commissioned from Mark Logan, and we are working with business to take forward its recommendations.

Our Vision for Trade also aligns with Mr Higgins’ recommendations on trade and access to markets, and sets out a blueprint for how we will collaborate with partners to see Scotland succeed at doing business around the globe.

I do not view these reports in isolation, nor investment as an end in itself. These reports collectively provide a clear direction for delivery of a bigger and stronger entrepreneurial base in Scotland, aligned with more active investment markets. The work to deliver that is underway and will also be reflected in the National Strategy for Economic Transformation, which we expect to publish this Autumn.

Review of Statutory Debt Solutions

The review of statutory debt solutions is underway and good progress has been made. The first stage was rightly focused on the priorities that would help address the immediate impact of the Covid-19 pandemic, and also considered measures that would be appropriate for permanent change.