Financial Sector Jobs Task Force
The next item of business is a debate on motion S3M-3384, in the name of Jeremy Purvis, on a financial sector jobs task force.
It is not hyperbole to say that the banking and financial services sector in Scotland is going through the most significant period of concern in its history. The 1772 banking crisis, which led David Hume to suggest to Adam Smith that he insert a new chapter in "The Wealth of Nations", was perhaps less significant than the tumult that we have experienced since last summer—a contagion in the USA that spread across the Atlantic but which sprang from a culture on both sides of the ocean. That culture was highlighted to me best by the fact that, when Lehman Brothers went into administration, its salary bill was £4 billion but its bonus pot stood at £20 billion, skewing almost entirely not only the bank's business culture but the model of financial services in the western hemisphere, which was shared across the sector and across the ocean. Somehow, the sector had forgotten that it had the ability to say no to potential borrowers. When Lehman Brothers went down, the salary of its boss was $484 million.
In Scotland, the collapse of Lehman Brothers was matched by one of our two biggest and most socially and economically important companies, the Royal Bank of Scotland, reporting what will be the biggest loss ever in corporate history in this country. We need to look at some of the consequences of that for our local communities and for the local, regional and national economies of Scotland. The significance of the sector to the Scottish economy cannot be overestimated, whether it be in Perth, Glasgow, Aberdeen or Edinburgh. My colleague Margaret Smith will speak about her constituency, where so much of the country's financial services sector is based. Other members will talk about their local circumstances.
Given the turmoil that has affected the sector, it is critical that we look to the future. A third of financial services firms in Scotland intend to make cuts of 5 per cent or more this year, with investment operations players the most likely to reduce head count. Recruitment is not completely dead in the water. Financial services recruiters estimate that a fifth of the sector's companies in Scotland are likely to increase head count by up to 10 per cent this year, but that compares with more than half of those surveyed in 2007 and a record 82 per cent that forecast growth in 2006. The decline is stark, but the number of companies recruiting has not fallen to zero. I was interested to note that some areas in which there has been depressingly bad news, such as the insurance market and banking, have also been buoyed.
Discussing the shortages that exist, one recruiter stated:
"It's a vicious circle. Job-seekers think there are no jobs, so don't take a look at the market, in turn firms who are recruiting for niche skills can't recruit."
Such niche skills are mainly at the senior end, with companies struggling to find management-level hires. Scottish Enterprise says that there are still some opportunities across the sector. In areas ranging from distribution to senior asset management, there is considerable concern about the skills mix, as well as potential job losses.
Scotland has contributed to the world's financial sector, and now we are being buffeted by the world's financial storm. Employment in the sector has grown exponentially over the past decade. Last summer, we proposed the establishment of a proactive, fully fledged task force for the sector that would include its partners—unions, local authorities, colleges and universities. Today, we seek all-party support for that proposal. The task force would play a key role not only in securing support for the sector in the future but in guarding against the significant impacts that the current situation will have in local areas. Growth in my area of Tweeddale and the north Borders has been dependent on the growth of the financial sector in Scotland.
It is not necessary or desirable to establish a new structure. The Government continues to argue that the Financial Services Advisory Board is the correct structure. FiSAB was established by Jim Wallace in 2005 to oversee the financial services strategy, but that was during the boom time. Although we welcome the fact that FiSAB will meet next week, its previous meeting was in September. We argue that now its structure should provide for a more direct approach.
The member will see from our amendment that we are sympathetic to his proposal. Have the Liberal Democrats had any offline discussions with FiSAB members to seek their views on what they can do and whether the proposed task force would be an effective way of combating the downturn?
I welcome the Conservatives' welcome today for the establishment of a specific group—it is disappointing that yesterday they ridiculed the proposal. My discussions with FiSAB members and others who are involved in the sector have brought sharply into focus the need for a more specific grouping that would look at the skills set of existing staff, the context of unemployment in the sector and the consequences of that for local authority areas. Just before Christmas, I had an interesting discussion with a senior person in the sector in Edinburgh, which focused on the fact that this recession may be different in type from those that Scotland has experienced in the past, given the significant growth in the financial services sector that has taken place recently. In that context, an active group with clear criteria for judging its success and a proper, proactive path forward would contribute to the future success of the sector.
As I indicated, FiSAB last met in September. That is not a sufficient response to the developments in this critical sector. The sector includes a diverse range of jobs, from distribution to asset management. A more specific policy response is needed to address the impact of the current situation on higher-salaried individuals entering the labour market and its knock-on effect, both in Edinburgh and other cities and in the travel-to-work areas around them, given the discretionary and disposable income that those individuals have had. The City of Edinburgh Council and Scottish Enterprise have had discussions, but we believe that the issue must be brought into sharp focus immediately, to allow for a more proactive approach.
Scottish Financial Enterprise is also looking to a more positive future for the sector. It is seeking more proactive co-ordination of public bodies, private sector bodies, unions and councils, both as part of a preventive approach for the sector and to offset the considerable damage that will be caused if our worst fears come to fruition. The sector has a positive future, but we need a much stronger, more critical way of supporting the staff who are involved in it. That is why we have brought our motion before the Parliament today.
I move,
That the Parliament notes the importance of the financial services industry to the Scottish economy; believes that the Financial Services Advisory Board (FiSAB), set up to be the custodian and advocate of the strategy for the industry in Scotland during a time of economic boom, should now be given more powers and a new purpose to focus on protection for this major Scottish industry during the current banking crisis and recession; notes the Scottish Government's commitment that FiSAB should be adapted to deal with the challenges in the sector and should meet more frequently than the present position of twice a year, and calls for the urgent formation of a finance sector jobs taskforce within FiSAB to work proactively to help the staff with essential skills who are losing their jobs and for ministers to report to the Parliament on its work.
It is a pleasure to speak on behalf of the Labour Party in this debate. We have debated the issues facing the financial services sector and banking on many occasions, particularly since the emergency debate on the HBOS-Lloyds TSB merger. It is right that we do that as a Parliament, and it makes our business relevant to what is happening outside. We support the motion and the amendments.
We are now at the stage of debating what we as a Parliament can do here in Scotland, and what the Scottish Government can do under the existing structures—as well as enhancing them—to help and support the workers in particular, but also to assist the organisations in the financial services sector with the problems that they face.
The proposal to have FiSAB meet more regularly is constructive and welcome. The suggestion that we create a financial sector jobs task force is also sensible, and I hope that we get some ideas from the debate about how to pull it together.
I am a little bit worried about the breaking out of consensus over the past 24 to 48 hours—although Mr Whitton tries his best, now and again, to break it. I am sure that normal service will be resumed next week. However, on important issues such as this one, we should try to work together across the chamber to find a way ahead that will make a difference for people outside the Parliament. There needs to be collaboration. We need organisations to come together in difficult times.
The motion is right to note that FiSAB was established at a time of definite growth in the financial services sector, but the challenge now is somewhat different. Our amendment seeks to highlight the role of trade unions and to complement the Liberal Democrat motion. We believe that the trade unions have a unique perspective on our financial services sector, particularly when it comes to employment. They would complement any sub-group and provide a valuable two-way conduit between the workforce and the wider industry.
I am in regular contact with Unite and Accord, and I encourage other members to speak to those unions' representatives. We must remember that, ultimately, those organisations will have to deal with the shake-out. We might think of full-time paid officials when we speak about such organisations, but, in reality, local trade union representatives are unpaid volunteers who have worked in the industry and whose own jobs might be at risk. It is they who have to do the work and deal with issues on a daily basis. I encourage members to engage with local representatives when they can.
I have seen Unite's financial charter, much of which focuses on what might be done through regulation at Westminster, but a lot of it relates to what we can do here. I raised the matter with the First Minister a couple of weeks ago, and I understand from a meeting that I had with the FiSAB member Rob MacGregor—it was one of the offline meetings that Gavin Brown alluded to in his intervention—that the board's next meeting will involve some dialogue with the First Minister on the financial charter. I also mentioned our debate today in that meeting. Such discussion is an important step forward. We should be looking for ideas not just from within the Parliament but from outwith it, too.
If we are being honest with ourselves, we should acknowledge that the issue ultimately concerns the people who are working in the sector. Understandably, they have been concerned about their job security, which is why we tried to secure measures in the budget over the past few weeks in relation to apprenticeships. We have also considered the matter of retraining. The banks are trying to take a sensible approach to employment issues. In the discussions that I have had with senior bank executives, they have indicated that they will have to reshape their businesses and to take some costs out of them. They will want to do that in a sensible way, with the minimum impact on employees. We have an opportunity to ensure that that is the case.
I support interventions from the Government, such as those on apprenticeships. The work of partnership action for continuing employment is important when people leave the financial sector and we need to find other sectors for them to move into. Mr Swinney made an announcement about green jobs this week, and I am sure that skills from the financial services sector could complement growth in that area. The creative industries is another area of growth in the Scottish economy. We need to help people to make the change. Where the financial services sector previously took up the slack from the manufacturing sector, we need to find other areas of the economy that Government interventions can help to grow so that people who come out of the financial services sector have the opportunity to work in them.
One of the key problems that we need to address is a lack of understanding in industry more widely about the skills that exist in the financial services sector. I co-convene the cross-party group on skills with Gavin Brown, and we will certainly consider that issue at the group's next meeting. We will have discussions with Owen Kelly from Scottish Financial Enterprise and Simon Thompson from the Chartered Institute of Bankers in Scotland about how we might get a structure together, how we might get people to understand the skills that are available in the financial services sector and how we might provide opportunities for people.
The Conservative amendment is sensible. We need to see the wider picture to understand where we are now, and we could use the resources of the Parliament and the Government for that. If we take a snapshot now and see where we are, the Parliament can try to complement the good work that has been done by organisations outside. We can consider how to develop FiSAB and make it responsive to the needs of the people who work in the financial services sector.
I move amendment S3M-3384.2, to insert after "year":
"and believes that there should be continued workforce representation at the meetings in the shape of the recognised trade unions".
John Park has just made a pertinent point about jobs. All of us know constituents, and many of us have friends and family, who work in the financial services sector. Even those who are not immediately faced with the prospect of redundancy are feeling uneasy. There is a great deal of uncertainty and concern in the industry about what the situation means for people's jobs, homes and families. That concern will remain with us for some time.
I echo what John Park said about the approach of the banks. So far, they have taken a responsible approach in dealing with the inevitable concerns. We are all realistic, particularly in relation to the banks that are undergoing strategic change, that there will be reductions in head count. That is inevitable, and it means real people losing their jobs. That needs to be handled very carefully. So far, the banks have taken a sensitive approach.
We are all aware of the importance of the financial services sector to Scotland. Even with the recession, and even if the impact of the recession on the financial services sector proves to be significant, it will be very important to Scotland in terms of employment and its contribution to the economy. It is important not to lose sight of that. I get frustrated with some of the media, and indeed some politicians, given their approach to the financial services sector. A year ago, it could do no wrong. People were lining up to heap praise on Scottish banks, saying how amazing they were and how great their strategies were. Now, in many cases, the very same people are turning tail and criticising them, pretending that they knew all along that their strategies were terribly flawed. It is a bit rich that so many commentators are happy to take pot shots at businesses that are struggling and happy to take credit when they are doing well. That said, we now need to move on and deal with the situation that we face.
When FiSAB was set up, it was undoubtedly in the context of a financial services sector that was growing at a significant rate, faster than the rest of the economy. Nonetheless, at the time, the strategy documents that FiSAB released acknowledged some of the challenges that the financial sector faced. Key among them was the fact that the strength of having a large financial sector in Scotland could be a challenge in difficult circumstances. That is exactly the problem that the Scottish economy faces now. We have become very reliant on the financial services sector because it has done well, which is positive, but when there are difficulties in the sector we are more exposed to the downturn. We are also more reliant on headquarters for other services, including professional services.
The Labour amendment is entirely sensible. FiSAB was indeed set up with involvement from the trade unions, and it is entirely appropriate, particularly when we are considering the impact on jobs, for trade union involvement to be included. I am happy, on behalf of the Conservatives, to accept the Labour amendment.
Turning to our own amendment, we think that it is important to monitor what is happening in employment in the financial sector. There has perhaps been too little emphasis on the contribution of the financial sector in the past, but it is important that we are all aware of the contribution that it makes and of changes in employment throughout the sector as we go through the recession. It might take many years to reach the end of the difficulties for the financial sector, and it is important that all of us in the Parliament are aware not just of the number of jobs in the sector but of the many jobs that rely upon it indirectly.
We should perhaps reflect on FiSAB's ability to make a significant difference. We are dealing with a major financial situation that is leading to significant changes across the sector. The Government should do what it can to help, but let us not kid ourselves that FiSAB or anyone else can wave a magic wand to get rid of the challenges. The task of Government is surely to mitigate the impact and to do what it can.
I move amendment S3M-3384.1, to insert at end:
"and for such reports to include the latest estimate of the number of jobs in the financial sector in Scotland, direct and indirect."
The Scottish Government agrees with the motion and will propose that a finance sector jobs task force be established within the context of the existing FiSAB arrangements. That will be discussed at the forthcoming FiSAB meeting on 10 February and at the SFE dinner that is planned for 16 March. The discussions will also consider how the sector will adapt to address the current challenges. We agree that FiSAB should meet more frequently—twice a year needs to be improved on—and that the task force that is to be established should also have frequent meetings.
I congratulate the Liberal Democrats on selecting this important matter for debate and I thank Jeremy Purvis for setting the scene so well. His comments were augmented by those of John Park and Derek Brownlee, who provided a very clear idea of the challenges that face us.
The global financial services industry is experiencing unprecedented change and challenge, the scale of which few could have foreseen. Because of the effect on the banks, which have such a pivotal role in Scottish society, the changes are affecting many people in Scotland in all walks of life. The issue is personal and very close to all of us.
The key point is that the financial services sector in Scotland is resilient: it can adapt, evolve, endure and grow. I saw that personally 20 years ago, when I worked on secondment with a company called Origo Services, which was set up by the totality of the United Kingdom's life and pensions sector to manage the migration from batch processing and central quotations to broker self-sufficiency and the creation of a much more cohesive industry.
I am convinced that it is right that the Parliament contributes to a similar process now by contributing ideas and collective effort to mitigate the potential impacts of the major changes that Scotland's financial sector faces. In particular, we need to be prepared to roll up sleeves and work closely with the industry. In facing difficult times, in a situation in which no one clearly knows when the current exceptional financial instability will end, we know that things will end better if industry and Government face the issues together. We need to work to ensure that the industry comes out of the current phase tougher and more resilient by evolving to offer different and more relevant services. The industry will need to operate on a better basis, with the moral hazards, risks and rewards properly managed.
We know that we can do that in Scotland because our financial services sector—a bit like our renewables sector—is already very diverse. It covers lots of bases and all the main sectors are well represented. That diversity is strength, especially if we want to evolve and move to a better set of circumstances.
An especial strength is our unique collaborative partnership in FiSAB. The membership of FiSAB includes not only a wide range of the industry's sub-sectors but representatives from the union Unite, Universities Scotland, Scottish Enterprise and Scottish Financial Enterprise. That is what makes FiSAB a unique collaboration. The Scottish Government has shown its commitment to the industry not just by designating it as a key sector but by fully engaging in FiSAB, of which the First Minister is chair and both John Swinney and I are members of the board.
Over the past decade, Scotland's financial services industry has been highly successful. In 2006, the industry contributed approximately £7 billion to Scottish output. The industry has also maintained a good level of employment, which stood at 91,600 people in 2007. As others have mentioned, banking continues to employ a large number of people. With other parts of the sector such as life and pensions and asset management being highly material to the Scottish economy, the industry still accounts for a significant part of the picture. In 2007, banking accounted for 54 per cent of employment in the sector, with life and pensions at 15 per cent and asset management at 13 per cent respectively. Those are the major babies in the bath water.
We are determined to ensure that the impact of the current financial services crisis is handled not only with concern but with focus, so that we achieve the most positive outcome and mitigate the impact on the wider Scottish economy. That is why we have taken action to help households and businesses that are bearing the brunt of the financial crisis.
I reiterate that the Government's primary purpose remains the creation of a more successful country with opportunities for all to flourish. Increasing sustainable growth was right in May 2007 and it is even more right today. In making that statement, we recognise the difficulties that we and countries across the globe face. We are facing up to those difficulties. We have shown our willingness to work with the UK Government and Europe to maximise and guide Scotland's potential to emerge successfully and solidly from the crisis.
The cohesion that is evident in the Parliament today is also a key element. Our approach in the meantime sits comfortably with the proposed finance sector jobs task force, in as much as we seek to lift the totality of Scotland's economy by ensuring that our financial services jobs are strengthened and resilient. We want the financial services sector to emerge with greater strength that plays to the strengths of the other sectors of the wider Scottish society and economy. That will continue as we go forward.
We move to the open debate.
I welcome the chance to contribute to this debate. I rise to support the amendment in the name of my colleague John Park. I strongly believe that, at a time of global financial problems caused by the sub-prime mortgage market in the United States, it is vital that not only the financial sector but the trade unions are round the table with the First Minister and his colleagues.
In reading the minutes of the most recent FiSAB meeting, three things struck me. The first was the absence of trade union representation, which I have already covered. The second was that only two women were listed as members—of which only one attended—among the long list of clearly male names of the representatives of the different companies. The third was the lack of any sense of the financial crisis in the banking industry, which really amazed me. The minutes of the October meeting refer to the fresh talent initiative—an important subject—and to concerns about the impact on the industry of the bill to provide compensation for pleural plaques. However, there is little reference to the global financial crisis. In reading the minutes, I was surprised that there was no sense of urgency about the global credit crunch, the finances of all our industries and the jobs that are being lost. I hope that that will be remedied in future meetings.
I agree that there must be urgent action and that the frequency of FiSAB's meetings must be increased. It is good to hear Jim Mather confirm that that will happen. We need to review the make-up of the board's membership so that it includes not just the trade unions but, given that we are dealing with such a national emergency, the leaders of all the Opposition parties. They should be round that table, too.
On the Liberal Democrat motion, I must say that, for me, actions speak louder than words. Here in Edinburgh, there are fine words from the Liberal Democrats; where the Lib Dems have the opportunity for action, such as in my constituency, there is patent inaction. In Fife, the Liberal Democrats are in power in a coalition with the Scottish National Party. I can bear witness to the fact that the Lib Dems—in the shape of Willie Rennie, Jim Tolson and their colleagues—have blocked efforts that would generate £0.5 billion of investment in financial services opportunities at the Rosyth waterfront project, which is partly in my constituency and partly in Jim Tolson's.
I challenge the Liberal Democrats firmly to say why they are displaying such hypocrisy this morning. Why did more than 100 jobs disappear at Centron in Dalgety Bay? On behalf of my people, I am angry at the Lib Dems, and that anger is firmly and squarely focused on Willie Rennie, Jim Tolson and the precious few members who are sitting on the Liberal Democrat benches this morning. If the Lib Dems had secured that £0.5 billion of investment, Fife would have gained precious opportunities in the banking and insurance sectors of the financial services industry. My friend Jim Spowart, who founded Intelligent Finance, has spearheaded work in that connection. We have heard fine words from the Lib Dems, but they are hypocritical.
Returning to FiSAB, I agree that the board must be supported. However, the Liberal Democrats must have regard to the fact that we want not just lip service and fine words but action.
As we have heard this morning, the importance of the financial services sector to the Scottish economy is unquestionable. Between quarter 1 of 2001 and quarter 1 of 2007, the financial services sector in Scotland grew by 60 per cent, whereas over the same period the overall Scottish economy grew by 14 per cent and the United Kingdom financial services industry grew by 47 per cent. It is therefore clear that the Scottish financial services industry punches well above its weight and is well worth fighting for.
The concern is that the economic downturn will impact greatly on the Scottish economy, but it is feared that the financial services sector will bear the brunt, so I welcome the motion, because it is essentially about jobs and the need to protect major Scottish industries during the current banking crisis and the worst recession in 60 years.
As has already been intimated, one in 10 Scottish jobs is in the financial services sector—up to 100,000 people are directly employed by it. However, as Derek Brownlee indicated, the approximately 100,000 people who are employed in support services are also important.
Edinburgh is, of course, Scotland's financial services centre, but financial services make a crucial contribution to local economies. That is indeed the case in my constituency, which has regrettably seen jobs contract in HSBC and Intelligent Finance—that is even before we consider the consequences of the Lloyds TSB takeover of HBOS, with predicted job losses of 3,000 to 4,000 across Scotland.
Financial sector jobs are important for two reasons. First, they mean a livelihood and survival for people. Secondly, the work is generally well paid. Across a range of roles, finance sector jobs pay up to 25 per cent more than the comparable roles in all sectors of the Scottish economy. That is particularly important for my constituency, which has seen the demise of other well-paid jobs in silicon glen. Those jobs have been replaced by jobs in McArthurGlen. Although retail growth in Livingston centre is most welcome and has transformed the town centre, I am concerned about overreliance on the retail sector, particularly at a time of recession. It is obvious that well-paid jobs do more to support the retail industry.
I hope that the task force will work well with local authorities and local economic development departments. Notwithstanding the concentration of financial services in the capital, it must be reiterated that they play a pivotal role in many local economies.
Scotland is renowned for its expertise in finance, and our financial services industry is a truly international success story. It is one of our oldest industries and still one of our most vibrant and innovative. It is vital that we protect it and support it through any changes and evolving practices. While the establishment of the task force is most welcome, we must not forget to celebrate the industry's success, because it is truly a Scottish success story.
I welcome the debate. As an Edinburgh MSP, I want to say how important the issue is for the city of Edinburgh, the Lothians and the Scottish economy. There are many jobs in banking and financial services, but those sectors also support a huge number of indirect support services across the city, for example in catering and legal services. Important sectors in the city will be damaged if there are problems in banking and financial services, so I welcome today's focus on the jobs task force for the financial sector.
The support that we gave yesterday for increasing investment in partnership action for continuing employment is crucial, as is our support for modern apprenticeships. Although Edinburgh has a strong labour force and a good set of skills, we must ensure that there is reinvestment for the future so that, when new opportunities come, we can seize the day and make the most of them.
Alongside the specific issue of financial services jobs sits the crucial issue of financial services investment and what the lack of confidence is doing to development in the city. There are real concerns across the country, not just in Edinburgh, that major construction developments are now not going ahead. Our last briefing from the City of Edinburgh Council focused on that issue. In the past couple of weeks, three major announcements have been made, one of which was about a devlopment in my constituency—the huge Royal Bank of Scotland development in Fountainbridge has been stopped completely. There has also been an announcement about the Shawfair Project which, as a lecturer in town planning more than a decade ago, I was able to use the Shawfair project as a student project for more than five years. For the project to fall back after it had finally reached the development stage is a major setback for the economy of the Lothians and the south of Scotland. We should also not forget the restructuring of the Granton project. All those big projects had the capacity to provide more than 10,000 new houses, which would have been crucial for the financial services sector because people need to be able to afford to stay in the city.
There is a real issue for the city's wider economy so, while I support the motion and amendments, I hope that ministers will also focus on it. We need banks to continue to lend, and I ask ministers to tell us what they have done to help financial services jobs and how they have focused on the construction industry and the wider Edinburgh economy. In particular, will they focus on the £10 million that was allocated to accelerated house purchasing in the private sector? That £10 million was allocated to the whole of Scotland, but Edinburgh will now not get the 10,000 houses that it needs in the short term.
Good things are happening. Statistics show that financial sector employment has gone up during the past year. It is a very small increase—only 0.5 per cent—but banking employment is down by 1.9 per cent and is 8.5 per cent lower than it was at its high point in 2007. We have not seen the massive shake-out that we talked about in the previous parliamentary debate on the subject, but restructuring is clearly happening. John Park told us about his discussions with senior representatives from the banking industry, and we know from the trade unions that discussions are taking place.
We need talks on how to get positive support from the Scottish Government for training and apprenticeships alongside support for restructuring that creates jobs and finds opportunities for those already in the skilled sector in Edinburgh and the Lothians. We need to consider how to support the wider economy through incredibly difficult economic times, and we must consider the impact on jobs in the city. There is a relationship between the financial sector and construction, catering, hospitality and theatres, and we need to take a joined-up approach.
I support short-term action on financial service sector jobs, but I urge that it be linked to the wider economy so that we take a joined-up approach on the issue.
It is with great pleasure that I rise to speak in support of the forward-looking initiative of the Liberal Democrats. In fact, I wish to allude to them and apologise to the chamber. For some time now, I have castigated various Liberal Democrat members as being foolish, misguided, intemperate, disorganised, confused and vapid, whereas I now realise that they are wise, scholarly, dependable and an example to us all. I hope that they will take my effort to make amends in the spirit in which it is intended.
As Angela Constance said, the financial services industry accounts for up to one in 10 of all Scottish jobs. About 100,000 people are employed directly by it, and another 100,000 work in support services. Many of those jobs are concentrated in my constituency: in 2008, five Edinburgh financial institutions employed 27,832 staff between them. The total figure for Edinburgh and the Lothians is about 40,000, although the figure is difficult to obtain with accuracy because some firms classify financial workers as computer operators, while others pay staff from outside Scotland and hence categorise those employees as being based elsewhere. That is why I have concerns about the value of the Conservative amendment.
According to the Scottish Government's 2006 annual business inquiry, a massive 31 per cent of all jobs in the city of Edinburgh were in banking, finance or insurance. Members may feel that that is a particular problem only for Edinburgh, but Edinburgh financial services account for 7 per cent of the entire Scottish gross domestic product.
Whatever the precise figure, there is no doubt that significant job losses in the industry will have a catastrophic effect on a city with a population of only 500,000 and a hinterland of about 300,000 more. The effect will not be solely in that sector. As Sarah Boyack pointed out, restaurant workers, taxi drivers, pubs and clubs, holiday firms, shops and a range of service industries will feel the pressure—less work means less profit and less employment. Edinburgh is facing hard times; it is sitting on an unemployment time bomb, the like of which it has never previously experienced.
There are some who point to the merger of the Royal Bank of Scotland with NatWest—when the joint workforce shrank by only 15 per cent—to illustrate that the potential job losses may not be as great as initially feared. Let us hope that they are right. However, there is a world of difference between job losses due to a merger when the financial sector in general is booming and those lost in mergers and downsizing when the entire banking system seems to be in meltdown. NatWest had few branches in Scotland, but the same is not the case for Lloyds TSB. The branch employees of Lloyds TSB and HBOS have cause for concern.
We in Edinburgh and the Lothians particularly welcome the initiative to establish a financial services task force to mitigate some of the harm that might be around the corner. No one can doubt that our banks have been badly mismanaged over the years. Combined with a global recession, that mismanagement has created a perfect storm in the Edinburgh and Scottish financial sector. However, the staff in that sector are well trained, enthusiastic and intelligent. If they become victims of the storm, they will be a tremendous resource for future employers.
One day, the recession will be over, and we will still need banks, insurance companies and ancillary organisations. Let us hope that the task force can come up with the policies to conserve and protect that talent so that it can again be put to use in the new financial industries that emerge from this mess. I wish the task force well.
Like yesterday's budget debate, in which only two members voted against the motion, this is one of those rare occasions on which the whole Parliament comes together.
As is well known, during the budget negotiations, the Labour Party argued strongly for modern apprenticeship places and further investment in the PACE programme. PACE stands for partnership action for continuing employment, and it is called that for a good reason. The task of those who are engaged in PACE is not to ensure that anyone who faces redundancy does not lose their job but to encourage them to get training or find alternative employment.
As other members have put it eloquently, we face large job losses in the financial sector. That is concerning, but it is one of the main reasons why Labour argued for an increase in the PACE money. A key way to ensure that people secure continuing employment is for employers to tell the Government early enough of their intentions. The banks that face job losses should be encouraged to get in touch with the Scottish Government at an early stage and outline their proposals not just to the Government but to the workforce.
There are many people around Scotland in the financial sector who are worried about the future—and rightly so—but they could be helped a lot more if discussions with PACE were encouraged. That fact applies particularly to the Lloyds Banking Group, which has massive duplication. I think that I am right in saying that there are branches of both Lloyds TSB and HBOS in 150 towns throughout Scotland. That is certainly the case in Kirkintilloch, in my constituency. In one section of the Cowgate, the Bank of Scotland sits next door to the Clydesdale Bank, which is next door to the Royal Bank of Scotland. Two spots further along is Lloyds TSB. The Lloyds TSB branch and the Bank of Scotland branch will not both survive—one of them will close. Although they do not employ large numbers of people, to lose those jobs from a town the size of Kirkintilloch would have the same effect as the one referred to by Dr McKee, albeit on a smaller scale.
Will the member be honest with his constituents and tell them that he actively encouraged the merger between Lloyds TSB and HBOS?
I thought that this was an occasion on which members would speak as one. There is no reason why Lloyds TSB and HBOS should not have come together. It was the right thing to do in the circumstances. The UK Government is to be commended for its investment to enable jobs in those banks, such as they are, to be saved. I do not share Mr Purvis's rather narrow view.
I welcome Mr Mather's announcement that there is to be a task force and that the issue will come up at the next meeting of FiSAB and at the FSE dinner on 16 March. All of those steps should be welcomed.
I pay particular attention to the message from Bill Jamieson, The Scotsman's esteemed financial commentator, who yesterday published a seven-point plan for the new chairman of the Royal Bank of Scotland. The key point was confidence: he stressed that the new chairman should be open and honest with his workforce and should bring them into the deliberations in the bank. By the new chairman taking staff with him, the Royal Bank would be restored to the position that it previously enjoyed.
It is not all doom and gloom. Other members have mentioned the wide variety of sectors in financial services in Scotland, some of which are doing better than banking. There are places for people who will be displaced by the banking crisis. We should do all that we can to ensure that the impact of the downturn is mitigated as much as possible. I welcome the Liberal motion.
We move to the wind-up speeches. Time is on members' side.
Well, in that case—
The Lib Dem proposition is a pragmatic one for an industry that has for some time been the jewel in Scotland's crown. I welcome the move away from what was initially a banking sector task force, as outlined by the Liberals, to a financial services sector task force. That is important, because about 45 per cent of the jobs in the financial sector are non-banking jobs. Scotland is strong on life and pensions, general insurance and asset and investment management. Those sectors could also face tough times, so it is important to consider the financial sector as opposed to simply the banking sector.
Labour members have said that they will support the Conservative amendment. We welcome that backing and will support their amendment too. Dr McKee did not think that there was much point in the Conservative amendment, but I shall explain why it is important. If ministers report back to Parliament on the number of jobs in the financial sector, it will allow all members to see the reality on the ground, and if we use one consistent measurement, we will be able to see the trends and changes.
There is big inconsistency in how jobs are measured at the moment: Dr McKee talked about a figure of 86,000 jobs, which comes from "The Strategy for the Financial Services Industry in Scotland 2008 Annual Report", yet his own minister, in the same debate, has talked about 91,000 jobs and Scottish Financial Enterprise's website mentions a figure of 100,000. There is a disparity of 14,000. Only one of the three figures can be right, which is why our amendment is phrased as it is. I do not know which figure is right, but if we have one consistent way of measuring what is happening on the ground, we will be able to see what is going on and take action.
My point was not about the people who collect the figures but about the people who provide them. I have it on good authority that various firms change their habits from year to year. For example, the financial services figures for Edinburgh show a decline of about 25 per cent between 2003 and 2007, yet no one in Edinburgh noticed a 25 per cent loss of jobs in the sector or a diminution in the economy—it was simply that the firms changed their ways of reporting. The people who collect the figures cannot check how the firms are reporting because of confidentiality issues.
Dr McKee makes a fair point. The way in which the figures were collected changed between 2002 and 2006, but that only underlines the importance of our amendment. We must have one clear and consistent way of reporting the figures. Whichever measure the Government and FiSAB choose to use is fine as long as it is consistent and the companies that collect the data do not change their methods over the course of their reporting to the Parliament. I agree with Dr McKee that such changes have been a problem, which is why our amendment is even more important today than it would have been in the past.
It is also important to talk about direct and indirect jobs. The Scottish Financial Enterprise figures refer to 100,000 direct jobs in Scotland and almost 100,000 indirect jobs. Obviously, there is a symbiotic relationship between the two figures, with one having a clear effect on the other.
The strengths of the proposal for the task force are many and varied. Having an existing body—particularly a well-respected body such as FiSAB—look at the issue will command support in the chamber, especially given the fact that FiSAB consists of a range of stakeholders including industry representatives, Government, academia and the unions.
The minutes of FiSAB meetings reveal that there is also a group called the financial services implementation group—FiSIG—which reports to FiSAB on strategy. It used to have a skills delivery group, but it completed its work and is not currently operating. That group looked into skills and may be able to use its knowledge to provide good insight. One of the proposals from FiSIG, back in September before the storm really hit, was that we should have a careers-focused financial services week. That was a sensible idea then, and it seems even more sensible now.
I was not trying to catch Mr Purvis out earlier; I was genuinely interested to know whether discussions have taken place. There are some serious big hitters in FiSAB, and I am keen to know their view on the proposal. Do they think that it is meaningful? What do they think that they can realistically give to the project in terms of their time and so on? What can they realistically do? If we set realistic aims and remain focused, it could make a difference. If what is resolved by Parliament today can provide a degree of help, it is certainly worth it.
I welcome the consensus that we have achieved in the debate this morning. I particularly welcome Gavin Brown's and Derek Brownlee's comments about the role of the trade unions—I feel a leaflet coming on. Something political might come out of the tone that we have heard over the past week, which would do us a world of good.
As members have said, there is a lot of information out there and it will be some time before we know what impact the financial crisis will have on the size, shape and focus of Scotland's financial services industry in the future. Our financial services sector contributes about £7 billion a year in gross domestic product and grew by 96 per cent—it almost doubled—between 1998 and 2007. That is quite a frightening figure. In addition, the sector in Scotland accounted for 8 per cent of the total employment in the financial services sector in the United Kingdom with, as Gavin Brown said, life assurance and pensions in Scotland accounting for 19 per cent of all employment in those areas throughout the United Kingdom. Those figures give a stark indication of the sector's contribution to Scotland. We should not lose sight of that.
Jeremy Purvis made some good points in highlighting significant figures concerning liabilities and the strategy that has brought us to where we are. We are only now beginning to understand how the problems arose. Behind those figures are communities and workers who have benefited from the financial services sector. Today's debate is about how we can help them.
People, especially in mid-Scotland and Fife, will recall how, in the late 1980s and early 1990s, a great number of companies started up—Visa call centres and financial services call centres—which took up the slack from other areas of the economy in which people were losing their jobs, such as the defence sector. They allowed women, in particular, to work for the first time on a part-time basis so that they could contribute to their families' finances in a way that they had been unable to do in the past. Those call centres now contribute significantly to employment in Scotland, so people will be genuinely concerned about their future. Taken together as the sum of the parts they make a huge contribution to those families and their communities, which is again something that we must not lose sight of.
When the call centres were being developed, people liked the sound of a Scottish or Irish accent; however, we have since seen changes in the approach to delivery of such services, including the offshoring of jobs and the automation of services. The reality is that cost is a huge factor to those companies, and it will be a huge factor in how the sector is restructured.
I would appreciate some detail from the cabinet secretary about what is going to happen at the meeting next week. How are things going to be structured and how will the matter be raised? What is likely to come out of that meeting? We have heard some good suggestions today, especially from Gavin Brown.
My colleagues David Whitton and Sarah Boyack spoke about the importance to the sector of skills and apprenticeships, and everyone knows my interest in those areas. The skills summit that was announced yesterday by the cabinet secretary as part of the budget will consider how we can increase the number of apprenticeships. We might also want to get financial services companies and banks to look into that. People who are involved in developing skills in the sector say that there has been less emphasis on banking skills, so perhaps we could consider apprenticeships in banking as a way to improve the skills in the sector in the longer term and to restore some confidence in the banking sector, which is what the wider public would like to see.
I will conclude on the implications of offshoring jobs, which has not been mentioned so far. We have had an interesting week in which people have been on strike throughout the country because of concerns about their employment and because of wider concerns about overseas workers. That has been driven by fear. We will face the same issue in the financial services sector if jobs in that sector move overseas. In the current economic situation, people are scared of losing their employment; they are frightened about what that would mean for their quality of life and for their families and communities. We must bear that in mind.
I have enjoyed today's debate. The speeches have been good, and the issues that have been raised are relevant to the concerns and needs of the people outside Parliament.
Margaret Smith and I have come to an arrangement about the remainder of the speaking time. I will leave it as a surprise for members to discover what the balance will be for the next 25 minutes.
Sit down now.
I do not think that that remark from Mr Purvis is in the spirit of consensus. I shall allow him to think about it for a little longer.
The debate has been productive and consensual, with the only discordant note being struck by Helen Eadie in her assault on the Liberal Democrats for what she believes they are doing to obstruct development of the financial services sector in Fife. That apart, it has been an excellent debate—we have managed to achieve consensus even in a debate in which David Whitton has taken part. That, in my opinion, is a minor miracle.
As part of my week-long crusade to build further consensus, I am able to share with Parliament the fact that another point of Labour's 15-point plan will be progressed. Point 9 of that 15-point plan is a request that the Government act immediately to recruit representatives from Her Majesty's Treasury and the Financial Services Authority to the Financial Services Advisory Board. I have to say to the Labour Party that the Treasury has, for a long time, been a member of the FiSAB organisation, and we appreciate the attendance of its representatives at the board meetings. At the meeting of FiSAB in September, we approved recommendations that we invite the Bank of England and the Financial Services Authority to take part, and with the same adviser status as the Treasury. Another point down, a couple more to go.
Gavin Brown noted the importance of data, as does the Conservative amendment. It is important that we have absolutely robust data that we all understand and share. The data that the Government has published and which inform our thinking on the financial services sector indicate that employment in the financial services sector in Scotland stood at 91,600 in 2007. Banking accounted for 54 per cent of that employment, which highlights the scale of the issue and the dependence on the banking sector. Obviously, the recent issues around the performance of the Royal Bank of Scotland and the merger of HBOS and Lloyds TSB raise substantial uncertainties in that respect. The life and pensions sector accounts for 15 per cent of employment, asset management accounts for 13 per cent, intermediation accounts for 12 per cent and general insurance accounts for 6 per cent.
None of us can predict what will happen in the sector. However, it is worth noting that Aegon UK's acquisition of Scottish Equitable resulted in employment growth in Scottish Equitable over the years. Similarly, the organisation that I used to work for, Scottish Amicable, was acquired by Prudential, and there are now more people employed in Scotland by that organisation than was the case beforehand. Of course, we have to be careful about the quality of that employment and we must ensure that the jobs are at a level of managerial and professional expertise that is consistent with those that existed previously, but the point is that acquisitions do not necessarily lead to employment loss. We have to be concerned that it might, however, which is why the proposal in the Liberal Democrats' motion extremely relevant.
On Gavin Brown's point about the strength of the statistics that we use, I say that the Government takes that seriously and will advance the research that is required to ensure that we have strong statistics.
I have mentioned offshoring of jobs before, and John Park mentioned it in his speech. Has the cabinet secretary raised it with the officials of the banks with which he has had discussions?
Offshoring of jobs is of concern to the Government, and we have raised it in our general discussions with the financial services sector. Obviously, we will continue to maintain a presence in that respect. There is substantial evidence to suggest, as Mr Park said, that some offshoring activity has been unproductive in terms of the quality of customer service. It might look good on a balance sheet, but if the quality of service does not meet customers' expectations, there is a penalty to pay. Mr Whitton's point is a fair one, and the Government will take it forward.
I want to speak about how the Liberal Democrats' proposals for FiSAB could fit into the infrastructure and architecture that we have in place for our dialogue with the financial services sector. As Mr Purvis said, FiSAB was launched in 2005 as a pioneering collaboration between the financial services industry, trade unions—which are fully involved in FiSAB—the Scottish Government, Scottish Enterprise and Universities Scotland. It is the custodian and the advocate of the strategy for the financial services industry in Scotland. I pay tribute to the previous Administration for establishing FiSAB, which is an important forum for dialogue between Government and industry. The SNP supported it in opposition and has taken it forward in government.
FiSIG—to which Mr Brown referred—was established at the same time as FiSAB. Its members come from governmental, trade union and industry organisations such as Unite the Union, Scottish Financial Enterprise and the Financial Services Skills Council. FiSIG meets every two months, so the criticism that we have somehow not had enough meetings on this subject is slightly wide of the mark. Although FiSAB last met in September, and meets again next Tuesday, FiSIG has been taking forward the operational priorities that FiSAB has established.
The First Minister has discussed with John Campbell, the chair of Scottish Financial Enterprise and the industry deputy chair of FiSAB, the proposal to establish a financial services jobs task force. Mr Campbell is fully supportive of the suggestion that that should be set up within the existing FiSAB arrangements, and ministers will develop that at the meeting of FiSAB on Tuesday. That gives us the opportunity to fully integrate the working of the financial services task force into the operations of FiSAB, to ensure the strategic direction of the industry and its workings, to implement those priorities through FiSIG and to undertake any additional activity that will be required to fulfil the aims of the financial services jobs task force.
Does the cabinet secretary accept that there might be a new role for the public sector? If the people who are leaving the financial sector with considerable skills could be recruited by the public sector, that could be of considerable benefit to public sector agencies. That might also provide Government with a different role in this situation, in not looking purely at the private sector.
That is a fair point, which also fits into the line of argument that we were advancing in the discussions around PACE yesterday. We are all agreed about what should be done in the circumstances. If there is employment loss, the first and best thing to do is to try to redeploy. There may well be opportunities for the public sector to absorb some of the skilled people that Mr Purvis mentions.
On trade union involvement, a few weeks ago John Park asked the First Minister to meet Unite to discuss the social charter. On Tuesday, after the FiSAB meeting, the First Minister will meet Rob MacGregor of Unite to discuss the very point that Mr Park raised.
I assure Parliament of the Government's willingness, along with the various organisations that work in this area, to ensure that we progress the issues in our proactive financial services strategy and those that are being raised by the circumstances that we now face.
Sarah Boyack and Angela Constance asked me to set out some of the work that the Government is undertaking to provide support for the financial services sector and expansion of opportunities in the Scottish economy. Angela Constance made a number of points about the implications of the recent developments in the industry for her Livingston constituency, and the importance of supporting jobs in that area. Sarah Boyack spoke in similar terms about Edinburgh—I am sure that Margaret Smith will say more on that matter, given that she represents Edinburgh West, which has a substantial amount of financial services organisations headquartered around the Gyle and Edinburgh Park.
We are working to ensure that the sector is well supported. We recognise the importance of the skills agenda, which is why it is at the heart of what we do. We also recognise Sarah Boyack's fair point that, in the current economic climate, some commercial developments will not proceed—not just in the financial services sector, but elsewhere—because it will be impossible to borrow the money or there will not be enough confidence in the markets. That is part of the general economic conditions, which the Government will, in collaboration with the United Kingdom Government, work to try to address.
This morning, we had some welcome news on the availability of finance in the markets with the Royal Bank of Scotland's announcement that it is making available £250 million of additional funding to small and medium-sized companies in Scotland as part of the UK-wide £3 billion package. The Government welcomes that. We have already engaged in dialogue with the United Kingdom Government about other issues of access to finance. Mr Mather was involved in the launch and roll-out of the measures that Lord Mandelson announced in January, and the Government is actively promoting those opportunities throughout the marketplace in Scotland.
I have been in regular correspondence with the Chancellor of the Exchequer to offer the Scottish Government's assistance, co-operation and willingness to work with the UK Government through UK Financial Investments Ltd, which is the organisation that manages the Government's shareholding in the banks. We seek to ensure that the genuinely and generally held opinion within the Parliament—that we should ensure that the investment and support that the banking sector has been given from the public purse percolates through the economy to the people whom we represent, who are facing tough times in relation to financial issues and arrangements with the banks—is properly reflected and that we get access to a climate in which the banks can lend again.
I know the importance of that from my constituency experience. I had a conversation on Friday with a company in my constituency that is finding it extremely difficult to find its way through its workings with the bank and to secure appropriate lending. If that is the case in my constituency, it will be the case around the country. We will act on that material issue as part of the Government's economic recovery programme, and I will discuss the issues further with the banks. I have already been in contact with them on that subject, but we will reiterate the messages.
The Government develops many of its interventions in the financial services sector through collaboration between our officials and the sector-specific teams in Scottish Enterprise and Scottish Development International, and there are exceptionally close ties between those organisations and the industry. I am sure that that will give members confidence that we are in a position to maximise the opportunities to ensure that we withstand the difficulties of the economic climate and secure the forward planning that will lead to investment in the financial services sector.
It is understandable that much of the debate has focused on the unease and anxiety that exists around the financial services sector, but I caution members that it is not all doom and gloom. There are difficulties, but there are also announcements of expansion. Adjacent to my constituency—in my colleague Roseanna Cunningham's constituency—in the city of Perth, Norwich Union has set out an agenda of development and expansion. That is significant, because general insurance has not been a predominant sector in Scotland; we have been more predominant in the banking, life and pensions sectors. Norwich Union has activities in Bishopbriggs, in Mr Whitton's constituency, and we welcome that.
In addition, Aberdeen Asset Management announced at the end of last year that it will become Britain's biggest independent fund manager after a £250 million deal to acquire the majority of the global fund management business of Credit Suisse.
We have many jewels in the crown of our industry. At the same time as we have had difficult news around some of the banks, some of our life and pensions companies continue to make significant contributions to employment growth and the economy. We welcome that. The Government will support the industry, and the suggestion from the Liberal Democrats will be taken forward as part of that activity.
We have had a good debate this morning. I welcome the general agreement about the pragmatic suggestion from the Liberal Democrats. The support of members throughout the chamber is much to be welcomed. It is a recognition of the seriousness of the situation that we face. We all face an uncertain future in the recession, but the people at the forefront of our minds today are those who work in the finance sector, for whom this is a particularly uncertain time.
I welcome the helpful contributions of the Cabinet Secretary for Finance and Sustainable Growth. In his closing remarks, he brought us up to speed with some of the partnership working that is going on with the Treasury, which is also much to be welcomed.
The debate has been quite consensual, although John Park should not worry too much about consensus breaking out everywhere while we have Helen Eadie on the back benches. Thank goodness for the words of wisdom that were spoken by Ian McKee and others.
As the cabinet secretary said, my Edinburgh West constituency includes the global headquarters of the Royal Bank of Scotland and a variety of other banks and life and pensions offices at the Gyle, Edinburgh Park and elsewhere. For the past decade, those companies have been instrumental and fundamental in building the growth and success of the city. In Scotland as a whole, there has been 96 per cent growth in the financial sector in that time. Many members made the point that, although the sector has been at the root of much of the success of the city and of Scotland in the past years, challenges arise with overreliance on any particular sector.
Some months ago, I was asked to speak at an event in my constituency about the importance of volunteering. I was introduced to a new citizens advice bureau volunteer, who told me that he had taken early retirement from a bank and was giving debt advice to local residents. He said that he was doing what he originally did at the bank, which was to give his customers advice about how they could avoid getting into debt and how they could get out of it. By the time he left the bank, that had turned around and his job was to contribute to getting people into debt through more and more credit, and keeping them there.
It seems to me that what that volunteer said encapsulates what our banking system has lost: it has lost trust, it has lost reputation, and it has lost its way. Radical measures are called for so that we can return our banking and finance sector to the position that it once held, and restore the public confidence that it once had. As a Parliament, we have only some levers to assist with that. Our suggestion today is one of the many ways in which Parliament and the Government can assist, but Sarah Boyack was right to focus on the importance of restoring confidence in the sector and, indeed, in the city that she and I represent.
The banks have a real responsibility. I agree with John McFall's comments from this morning, in which he condemned any bank that pays out large bonuses to bank executives courtesy of taxpayers, as if it is business as usual and nothing has changed.
It is estimated—depending on whom we listen to—that in Edinburgh 35,000 people are directly employed by the finance sector and a further 56,000 jobs are indirectly affected, including jobs in legal companies, advertising, independent schools, construction and a variety of retail and service industries. That is 27 per cent of the capital's workforce. Many of those people are my constituents; all of them are worried for the future of their jobs. Edinburgh is collectively holding its breath. People are concerned about the even wider ramifications of job losses on the city's council services, on support for the cultural and voluntary sectors, and on the city's international reputation, which has long been associated with finance.
Our reliance on the sector means that the loss of jobs and HQ functions will hit us hard, although I must note, as other members have, that there have been fewer job losses than we feared, and that the losses have been focused on the construction industry. There have been indirect job losses rather than direct ones, but we will have to look to the future to see how that pans out.
I appreciate the points that Margaret Smith is making, as her area covers a large section of the financial services industry. Does she recognise—I am sure she does—that the whole of Scotland has been affected and that Glasgow has a financial services district that contains offices of many of the companies that she is talking about?
David Whitton has mentioned what I was coming to.
I agree with the City of Edinburgh Council's head of city development that diversification is reasonable to ensure that we are not again so exposed to a downturn in one sector, and that our main focus now must be on protecting as many jobs as we can in Edinburgh, Glasgow, Perth and throughout Scotland. So far, the restructuring has been less dynamic than was feared, but we should not underestimate the concern that exists, or what might happen.
We all know a lot of people in our constituencies, as well as the people who work in the finance industry, who have been badly affected by what has unfolded; for example, staff who have put their bonuses into shares, shareholders and pension holders. A range of people who do not have money available to spend have been badly affected, which also has an impact on our economy.
It is clear that the finance sector is so important to Scotland's economy that we must do all we can to support and maintain jobs in it. As we have heard, about 90,000 jobs throughout Scotland are directly affected. Therefore, I welcome the Government's decision to accept the Liberal Democrats' suggestion on a finance sector jobs task force and Parliament's support for it. Given that FiSAB is already in operation, it makes sense to charge it with taking on that important task. I know that the Government will make a strong case for setting up the task force when FiSAB meets next week, and I welcome the comments that John Campbell has made. I also welcome the fact that Jim Mather and John Swinney have agreed that the task force should meet regularly. It should not be a talking shop; rather, it should focus on the problems and act.
Labour's amendment is reasonable—we totally accept John Park's point about the importance of trade union representation on the body. We also think that it would be useful if colleges and local authorities were represented on it. Like David Whitton, I welcome the comments that the cabinet secretary made yesterday on extra money for PACE. There will undoubtedly be a number of relevant issues to be considered in trying to make available relevant skills training and retraining opportunities. A highly trained work force might go into new and emerging sectors such as the life sciences sector or green jobs. Gavin Brown made a good point about previous work that FiSIG has undertaken and the part that it might be able to play.
The City of Edinburgh Council has already set up a cross-party group to consider the impact on the city, and a high-level group involving SDI, Scottish Enterprise and the Scottish financial sector has been set up to provide a fast interagency response as the situation develops. I am sure that the other councils that are most affected will be doing something similar. Given the different circumstances, it might be useful for individual councils as well as the Convention of Scottish Local Authorities to take a direct part in the discussions.
Councils already face significant pressures as a result of the credit crunch. They may have already seen reductions in capital receipts because of developments—such as that at Fountainbridge which Sarah Boyack mentioned, which had a council component through EDI—not going ahead and they may experience greater demands for their services. I think that there will be an impact.
In Edinburgh, one of our major concerns is obviously the lack of affordable housing. In my constituency, up to 400 people can be bidding for a single council house, which is a major problem. If people lose jobs, they will lose their houses, and there will be even more strain on an already acute situation. That is why I support the council's recent request to the Government for funding for council-house building. I ask the Government to consider the opportunities that exist to acquire 1,000 off-the-shelf homes from developers in Edinburgh.
This is a difficult time for the sector and the general economic news is not good, but we should not lose sight of the fact that almost half of Scotland's finance companies remain optimistic or very optimistic about their future, and that 20 per cent plan to recruit. The figures are down from those of previous years, but it is important that we do not lose sight of the fact that all is not doom and gloom. Announcements such as have been made by the Royal Bank of Scotland today will be welcome to businesses in our constituencies, which know that the big issue for them right now is access to funds to help cash flows, so that they can hold on to jobs and work their way out of difficulties and recession.
The Centre for Cities research group has given Edinburgh an amber risk rating for job losses, but it is worth noting that it also reported that the city is in a good position because of its strong employment rates, wide range of industries and highly skilled population. That could be said about other places as well.
It is not our job to talk down the finance industry and those who work in it.
You must close now, please.
Our job is to support those who work in the finance industry. I welcome the speeches and comments that have been made today.