Official Report 239KB pdf
An update from the clerks on our work programme has been circulated to members. There are one or two points that we must consider. We have quite a busy few months ahead of us with the proposed banking and financial services inquiry and budget scrutiny. Those are the two major items between now and Christmas. There are also proposals in the work programme in relation to the annual seminar with the Scottish Trades Union Congress and the business in the Parliament conference. Members may also wish to consider holding a meeting with the Council of Economic Advisers, as we did last year. Two requests were submitted over the summer for additional inquiries, which I will come to in a moment, along with recommendations.
I broadly commend the approach of focusing the financial services inquiry in the first part of the parliamentary year—that is, by the end of the calendar year. That reflects our discussions prior to the summer recess and it is practical and sensible.
So we agree to carry on with the banking inquiry as indicated and to make progress on the innovation/productivity inquiry and the international trade and exports inquiry over the next few months.
I have one suggestion regarding a subject that is mentioned in the paper but that, understandably, does not feature in the timetable. I draw the committee's attention to the issues under "Ongoing tourism scrutiny", including the proposals for a tourism bank and a national tourism investment plan and the evaluation of the year of homecoming. There are also issues about tourism skills. I was struck by how downbeat John Lennon was when we used him as an adviser. He felt that the very robust recommendations on which there was unanimity in the committee had not been progressed. We could maybe slot that into the back half of the year. Let us not lose sight of that, even if we have to come back to it in March or June.
We certainly do have to keep an eye on that and slot it in at an appropriate time when there is a gap in business. There will be opportunities to pick up some of those issues under budget scrutiny, as well, to find out what progress is being made.
There are clearly also issues to be followed up on the basis of the evidence session that we have just had with the National Trust for Scotland. The issues that were raised will probably develop in the autumn and into the early part of next year up to the end of February, when the trust will publish its financial report. I hope that there will be agreement among committee members to follow up those issues, as there are many unanswered questions and lines that need to be pursued before we can be satisfied that the body is functioning in the best interests of the nation. Would that best be fitted in with the tourism scrutiny and so on? That is where it arose from originally. Or do we want to deal with that as a separate item?
I suggest that, at this stage, we keep a watching brief on the matter. If specific issues arise on which we feel that we need to take further evidence, we can try to slot that in at appropriate times. The key point will be the trust's report on its financial year, which will tell us whether the restructuring on which it has embarked is delivering the intended results and whether there are any further potential consequences.
Members indicated agreement.
Members are requested to advise the clerk of their preferred focus for the budget scrutiny. I think that the key focus of our budget scrutiny will be on how the budget is delivering on the Government's economic recovery plan.
The one other area would simply be to reflect on what we were told last year. That applies to budget scrutiny and also the Council of Economic Advisers. I am keen to build some continuity into the scrutiny when we get to year 3 of a parliamentary session, so we should examine the undertakings, rationales and explanations that were given on the issues that we raised last year and consider where we are a year on. In some cases, the position will rightly have changed because of changing economic circumstances, but effective scrutiny is about finding out where we are on the undertakings that were given a year ago. That would be helpful. I do not think that we will all go and find the Official Report, but perhaps somebody else could do so on our behalf and draw that out.
If there are no other comments on that, we will move on to consider events. The paper suggests that the clerk and I be delegated to hold initial discussions with the STUC on themes for this year's annual STUC seminar and bring a further report back to the committee. The seminar is usually in the early part of February.
I have one little reflection on that seminar, which I very much enjoyed. I found out by a head count that the number of trade unionists from the shop floor who were at it was very low indeed. We were getting people from union offices and trades councils—just as, at the Scottish Council for Development and Industry do, the number of entrepreneurs came up to 14 per cent of the total who were there. At both events, there ought to be an attempt to get people from what used to be called the coalface.
Did we not also ask the clerks to consider whether we should have a formal committee session with the STUC to create a parallel with how we handle the Council of Economic Advisers? I take it from the proposal that that has been rejected.
No, the intention is to have discussions with the STUC and make proposals. That is one of them.
We should think about doing it in the same way as we handle the Council of Economic Advisers. That might address the point that Christopher Harvie makes. It may be that the STUC cannot do a Wednesday morning, but that option should be on the table.
The other event is the business in the Parliament conference. A report on that will be discussed later.
Would it not be interesting at that point to have a discussion with the Welsh Assembly Government about its experience of having incorporated the Wales Development Agency into the Government?
That is a valid point. I would be interested to know about some of the things that are happening in Wales, such as how the Welsh are managing to make use of the joint European resources for micro to medium enterprises—JEREMIE—fund, which we do not seem to be doing in Scotland.
That seems a helpful suggestion.
I echo that point. We should not underestimate the urgency of the question about whisky. Today, Diageo said that in the long term the task force's proposals
The suggestion is that we ask SPICe to produce a paper, but I do not know what the timescale for that would be. The paper would then provide us with background information, against which we could make an informed decision about the nature of any inquiry that we wish to undertake. We would look at the whisky industry in general, not at Diageo in particular.
I should perhaps declare an interest—although it is not technically an interest. When I worked in consultancy about a dozen years ago, I did a lot of work on the global consolidation of the spirits industry. The issue then was the loss of brown spirits to white spirits—demand was growing much more quickly for vodka than for whisky—so it seems to me that the note that was sent to all committee members about how the long-term growth trends of white spirits versus brown spirits have not been reversed is at the heart of the issue. Perhaps when the SPICe researchers prepare their paper they can draw on that note—I do not know who sent it to us—as it seemed very well informed. That point would also fit within a wider trade and international exports inquiry, because we would not be discussing whether we need two bottling plants or three if the industry was growing either at the rate of the world economy or at the rate of demand for other distilled spirits. I simply highlight that insightful note to the SPICe researchers because, for self-evident reasons, we do not always hear that point from the Scotch Whisky Association. If we are to do the issue justice—the issue about preserving all these small distilleries—we need to understand why, despite the efforts of major companies such as Diageo, white spirits hugely outperform brown spirits globally.
Some of the issues will no doubt be captured during our inquiry in the early part of the next calendar year, but Rob Gibson is right to point out that the particular circumstances just now merit the committee looking into the whisky industry. Asking SPICe to clarify what the issues are should allow us to see which issues we can cover and which issues are clearly outwith the territory of the inquiry. Given that the issues merit being looked at soon, can the committee request—although I suspect that we cannot put a timeline on this just now—that SPICe undertake the work as quickly as is feasible so that we can consider the issues in the near rather than the distant future?
Certainly, that is sensible. We want a fairly urgent report, but it must be thorough. We do not want a report that cuts corners and does not give us the information that we need. The clerk will discuss timelines with SPICe and will report back to the committee as soon as possible on when we might expect that report so that we can then consider where to go from there.
One issue that ought to be raised is brown spirits, which Wendy Alexander mentioned. It took me some time in my addled state to work out what a brown spirit is.
It is largely a matter of whisky versus vodka.
Quite, but obviously things are shoved in as mixers, and there are alcopops.
It is nothing to do with tall or short drinks. The only reason that we are not declining is because we have managed to substitute short for tall drinks, but brown spirits are still, a decade on, hugely behind white spirits.
In today's appalling parlance, traditional German beer and Scotch whisky would be called "iconic beverages". In Bavaria, which is not known for being desperately socialistic, the Hofbräuhaus in Munich is in state hands. The belief in ever-more perfect markets is not quite what it was a year ago. Should we not be thinking of the notion of having golden stakes in such things?
The right analogy is with French wine production, and the real issue, which the GMB raised, is whether bottling in Scotland is compelled. Because of the influence of some of the large players in the industry, the Scotch Whisky Association does not support bottling in Scotland, which is astonishing. The big players speak with forked tongue and will say that they bottle whiskies abroad only in countries in which there are tariff barriers. If that were the case and 85 per cent was bottled here, there would be every reason to do so. Of course, white spirits can be bottled anywhere in the world. There is no prospect of Finland and Sweden saying that that can be done only there. The big strategic decision on whisky is whether there is a move to insisting on its being distilled and bottled here. It is interesting that the trade body for Scotch whisky does not favour that position. However, the issue is not simple. Diageo's prospects are distinct from the prospects of the industry as a whole and the question whether its fortunes are best preserved by bottling in Scotland.
Any member who has any issues that they want the SPICe team to consider can e-mail them to the clerk. They will then be passed on to SPICe.
Of course, the chair of the Scotch Whisky Association is also the Diageo chief.
I was unaware of that. I should say that on the record.
In the circumstances, we must give the matter priority and start to do something before the end of the year, if possible. I know that SPICe can provide us with something more quickly, but our timetable is extremely tight. I urge the committee to consider such a big player in our economy at an early stage.
I would like to add a caveat. I have spent a little time exploring the matter, and have been told that a decision on bottling in Scotland is a United Kingdom decision. There is a decision pending on the matter for all malts. Whether one compels malts to be bottled here but not blends that are mixed with grain is a genuinely difficult and interesting strategic issue. The critical issue is whether the matter is reserved or devolved. We might take a different view about ways, issues and consideration if the matter is not ours to decide. Clarity on that from SPICe would be helpful.
We will try to get information on that.
We have to assess matters in the light of responses. I am sure that SPICe will provide us with commentary on that. We have to consider matters in that context.
Okay. We will leave that matter on the pending one-off inquiry pile.
That seems entirely sensible.
It was to the Scottish ministers, yes.
We have received only a partial answer that certainly could not be described as a report. There is a reference to a concrete set of proposals that are in hand, but we perhaps need a fuller answer from the Scottish Government before we decide what, if anything, to do.
In the meantime, will we try to contact the Treasury?
Yes. We will write to the Treasury to ask what it is doing in relation to the requests.
That is fine.
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