European and External Relations Committee

Meeting date: Thursday, September 19, 2013

Official Report 482KB pdf

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Scottish Government’s Country Plan for China and International Framework Inquiry

Item 4 is our China plan inquiry. We will consider the Scottish Government’s response to our inquiry report—we are getting through a lot of responses from the Government this morning. The inquiry involved looking at the Scottish Government’s country plans, and the committee focused very much on China with regard to industry and business, which involved some very good visits to companies.

The Government’s response is comprehensive and offers some resolution to some of the issues that we raised. Specifically, it addresses a specific issue that was raised by an individual company, and I am glad to see that Scottish Government officials are dealing with that.

I note that the report—the initial draft of which was written by Lauren Spaven-Donn—got amazing coverage in the media. We ran a very good experiment involving an embedded reporter—Colin Donald from the Herald business pages—which seemed to work extremely well. It gave the report a bit of gravitas, not only in terms of the committee’s work but the work of the clerks too. It is very welcome to see a comprehensive response from the Scottish Government that addresses some of the challenges.

I welcome any comments from my colleagues.

The Government’s response seems to cover most of the issues.

I am pleased to see the Scottish Government’s response to the recommendation on direct air links between China and Scotland. I understand that the Minister for External Affairs and International Development, Humza Yousaf, held talks in China with vice-minister Xia on that matter. We are clearly progressing in that regard, but we are also reliant on the resolution of the air passenger duty issue. The response from the Scottish Government in that respect informs us that air passenger duty is approximately £83 per passenger, which is a significant deterrent to establishing those direct air links.

I hope that colleagues can impress on their colleagues in the UK Government the need to take a serious look at that issue, because there is amazing potential for Scotland in direct air links to China. I welcome the Scottish Government’s response, but I back up its call for the UK Government to take a closer look at the air passenger duty issue.

As I have said many times in this committee, I also sit on the Education and Culture Committee. The section of the Government’s response that deals with the importance of educational links and what institutions are doing at an educational and a cultural level is hugely important. Perhaps the convener could write to the convener of the Education and Culture Committee to highlight the report and its implications for that committee.

Thank you. Are there any more comments?

Recommendation 9 in our report states:

“The Committee would welcome updates on the Government’s investigations into the hubs option, and details of any advances made in developing existing hubs.”

The Government’s reply stated:

“SDl has an office in Hong Kong and this works closely with our three offices in mainland China”.

In taking evidence, we heard that the companies that are doing well in China—such as Marine Harvest—already have offices over there, but the report does not mention that. It should probably include the fact that anybody with a base of their own in China is at a distinct advantage. In other words, not everything has to be done through the Government’s offices.

There is a suggestion that we should write to the Scottish Government and ask it to map the geographical location of the offices. We can then make a comparison.

My point was more that some businesses do not necessarily rely on Government help but already have their own bases there. I was concerned about the inference. It was brought forward as important that one company did better than another company because it already had links with China—that is the point I want to make.

I think that you are absolutely right. The point on the hubs is that a number of companies have head offices in Hong Kong and that having a stepping stone into China is very important for newer companies.

I agree entirely—

I think that we should write to the Scottish Government and ask for a mapping exercise to show where the offices are.

Okay. Thank you very much.

Jamie makes a very important point, which I think was covered in our report. We have to remember that this is the Scottish Government’s response to that report, but I am happy for us to follow through on the mapping exercise.

Do members think that there is any other action that we should raise with the Scottish Government, other than those actions that we have raised this morning?

I am not sure how we can keep a handle on recommendation 6 on the tax rebates issue. The Foreign and Commonwealth Office is talking to Todd & Duncan, so perhaps we may want to ask the Scottish Government whether it could keep us advised of any information that it receives on this issue.

Is everybody content with that course of action?

Members indicated agreement.