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Chamber and committees

Meeting of the Parliament

Meeting date: Tuesday, March 7, 2023


Topical Question Time

The next item of business is topical question time. In order to get in as many questions as possible, short and succinct questions and responses would be appreciated.

Loganair (Flight Suspensions)

To ask the Scottish Government what discussions it has had with Loganair and Highlands and Islands Airports regarding the suspension of many island flights from 17 March. (S6T-01244)

The Minister for Transport (Jenny Gilruth)

It is disappointing that Loganair has suspended those routes, although I am hopeful for a resolution before 17 March. I met the chair and managing director of Highlands and Islands Airports Ltd on Saturday morning to stress the need for a timely resolution to the pay dispute, and I asked for a new business case to be presented urgently to ministers. Following further discussions with unions yesterday morning, HIAL has developed further proposals that, subject to HIAL’s board’s agreement, will be considered shortly by ministers. Transport Scotland officials have discussed the situation with Loganair, which operates the routes on a commercial basis.

Neil Bibby

The inescapable and scandalous fact is that the Scottish Government would still be sitting on its hands, ignoring the damage to the islands, if it had not been for the dramatic escalation that was threatened by Loganair. That is not how things should work. Cancer patients should not have to be subjected to fear in order to get a response from the Government, and the islands should not be out of sight and out of mind until there is the risk of political embarrassment.

Why has the transport minister suddenly discovered a role in this matter when she repeatedly refused to become involved over the past five months, while HIAL said that its hands were tied by the Scottish Government’s pay policy?

Jenny Gilruth

Neil Bibby has somewhat mischaracterised the situation. I regularly meet unions from across the transport sector. Most recently, I met our airline unions at the end of January to discuss this very matter. It is therefore not true to say that I have not been engaged throughout the process.

I share Mr Bibby’s concerns, which is exactly why, when the decision was communicated to me—on Friday—I sought the first available opportunity to speak directly to HIAL, which was on Saturday morning.

Clearly, there is an urgent need for a resolution to the dispute. I am particularly concerned, for example, about any implications in relation to medical appointments such as the member alluded to. I have asked Transport Scotland to raise that matter directly with Loganair.

It is important for members to recall that the decision was made by Loganair, whose view is that actions short of a strike, in the form of working to rule, lead to short-notice cancellations—for example, when staff absences cannot be covered due to an overtime ban. Loganair has therefore taken a commercial decision in that respect, because of the costs that are incurred by cancellations. However, it is not a matter in which Government ministers can become involved, because the Scottish Government has no direct role in that provision.

Neil Bibby

Many people in the Highlands and Islands believe that, without Loganair’s escalation, the minister would still be missing, there would be no extra money on the table and the indefinite prospect of cancellations and disruption would still hang over the islands, with no end in sight. The minister cannot be unaware of the damage to fragile island economies by the ferries debacle. Why has she failed, for the past five months, to prevent that damage from being compounded by the on-going disruption to island air services? If extra money can be found now, why could it not have been found last week, or last month, to avoid the massive disruption that has taken place and the cancellation already of hundreds of hospital appointments?

Jenny Gilruth

Again, I refute Mr Bibby’s characterisation of the situation. I meet our trade union partners regularly. I last met our airline partners on 31 January in relation to this very matter, and I recognise that that dialogue is on-going.

I reiterate that the decision on the cancellation of flights has not been taken by Government ministers; nor have I, as a Government minister, had any input into it. However, I met HIAL on Saturday morning, at the earliest opportunity, to explain the urgency to it directly. HIAL met the unions yesterday to discuss the new draft proposal. That proposal is being put to the HIAL board and I expect an urgent update on the new proposal later today. The focus for Government ministers is absolutely on addressing the underlying issue: settling the HIAL pay dispute.

Alasdair Allan (Na h-Eileanan an Iar) (SNP)

It would be fair to say that my island constituents are horrified at Loganair’s recent action. The impact on patients alone, including cancer patients, is almost unthinkable. Seriously ill people rely on the service to access treatment on the mainland, and it is unclear how operations, appointments and scans will be carried out otherwise.

Directly and indirectly, Loganair has received substantial funding through the public purse, and it has now placed NHS Western Isles in an atrocious position. Did Loganair give the Government or island health boards any indication that such a disproportionate and draconian move was even being considered?

Jenny Gilruth

The answer is probably no. As I outlined in my response to Neil Bibby, Loganair informed me on Friday morning of its decision to suspend routes, including the two routes that we are discussing. However, as I explained to Mr Bibby, those services operate on a commercial basis, so Government ministers cannot become involved.

I very much understand that the performance on the Stornoway to Inverness route has declined in recent times. In part, apparently, that is because of a reduction in travel by Western Isles Council staff. According to Loganair, that has been a major contributory factor. However, there has also been a reduction when it comes to national health service staff using ferries for patient travel. I very much recognise the importance of those routes, particularly in relation to the critical transfers that Alasdair Allan has alluded to, and I have asked my officials to speak directly to Loganair on that point.

Donald Cameron (Highlands and Islands) (Con)

We now have a six-week suspension of Loganair flights; we have had a number of recent ferry failures; and we have had a betrayal of the Scottish National Party’s promise to dual the A9. Travel to and from the Highlands and Islands is in crisis due to the Government’s failure to deliver adequate lifeline transport links. When will the SNP-Green Government get its act together and make island transport a top priority?

Jenny Gilruth

I do not accept the characterisation that Donald Cameron has outlined in relation to transport to our Highlands and Islands communities. The vast majority of my time as transport minister is spent in dealing with those matters directly. I recognise the disruption on the network in recent times—I am about to answer a topical question further to that. However, it is important to reiterate that the way to resolve the situation with HIAL is to get a resolution between the unions and HIAL.

That is why I spent my morning on Saturday discussing with HIAL how it is urgently going to put forward a new proposal for ministers to approve. I await that proposal. Once I have it, we will be able to move forward and, we hope, unlock this dispute and provide greater reassurance to Mr Cameron’s constituents.

Liam McArthur (Orkney Islands) (LD)

I was contacted earlier today by the family of a constituent to say that their mother is booked to fly to Shetland for a mastectomy operation later this month. Due to the suspension of air services between Orkney and Shetland, she now faces an eight-hour ferry journey either the day after her operation or after almost a week away from home.

Does the minister accept that these are lifeline air services? Can she explain why HIAL bosses were required to stick to a 5 per cent pay offer after counterparts at CalMac were freed up to offer staff more? Will she now ensure that everything possible is done to bring this long-running and damaging dispute to an end?

Jenny Gilruth

I understand the sentiment behind the member’s question, of course. The scenario in relation to CalMac is slightly different from that for other private sector bodies. However, I recognise the concern that he has raised today.

In relation to the experience of the constituent that he outlined, I would be more than happy to look at the specifics of that in detail.

Clearly, these flights operate on a commercial basis and it is therefore very challenging for ministers to intervene in relation to their provision. Indeed, I raised that matter directly with Transport Scotland over the weekend and again today. Although I am not able to do that directly with Loganair, I will make representations to the company on behalf of Mr McArthur’s and other members’ constituents, because I recognise their concerns.

Ferry Services (Reliability)

2. Edward Mountain (Highlands and Islands) (Con)

To ask the Scottish Government, in light of the recent comments by the chief executive of CalMac, what action it is taking to prevent island residents being impacted by any reliability issues affecting their ferry services over the next two years. (S6T-01236)

The Minister for Transport (Jenny Gilruth)

I have been clear to Parliament, including to the Net Zero, Energy and Transport Committee only last week, that investment in new ferries to replace the existing fleet has been one of my key priorities as Minister for Transport. We are delivering six new major vessels in the life of this session of Parliament, as well as the purchase of the MV Loch Frisa, which has been in service on the Oban to Craignure route since last summer.

We are investing almost £700 million to support the improvement in the fleet, which will also allow investment in the small vessel replacement programme. Although I recognise that those vessels will take time to deliver, we are also investing resilience funding of at least £4 million per year to maintain the existing fleet and we continue the search for additional tonnage that can be chartered in the short term.

Edward Mountain

I thank the minister for that answer. I am flabbergasted by that. I asked about the next two years. There is obviously a timescale problem—the same timescale problem that results from the 10-year ferries plan being left on the shelf and ignored.

As far as resilience and the plans for the £4 million are concerned, the last time I am aware of that being spent, it was on improving fire extinguishers in a ferry, which should have been a normal contract thing.

Where are we at the moment? We have three candidates to be First Minister—one who oversaw the ferries, one who signed off the payments to a turnaround director who failed to deliver, and one who appears to be content to build a doomsday thermometer for independence. Will the Minister for Transport give me an assurance that, if she is still in position after the leadership battle, a spare ferry will be either rented or purchased to cover the next two years?

Jenny Gilruth

I am more than happy to give Mr Mountain a confirmation in relation to that request. It is important to reiterate that, when I appeared in front of Mr Mountain’s committee only last week, I gave a very clear guarantee in relation to the search for on-going additional capacity on the network. I put on the record again that Caledonian Maritime Assets Ltd made offers to purchase two second-hand major vessels—the MV Arrow and the MV Straitsman—but they have unfortunately been unsuccessful.

We will absolutely continue to look for the spare vessel that Mr Mountain alluded to. I recognise that there is a challenge in relation to the current fleet and the availability of services at the current time.

Mr Mountain will recognise that, if there are on-going conversations in relation to securing an additional vessel, some of them will be commercially sensitive and I will not be able, as minister, to share some of that detail in the chamber. However, he has an assurance from me that we are absolutely seeking the additional tonnage that we need in relation to the CalMac fleet.

Edward Mountain

The Government has been looking for a ferry to rent for the past 16 years and it has not come across one. That might give it an indication that there are no ferries out there and that it should have been building them—and building them in a much quicker process than we have had.

We have the MV Pentalina, which we hope will come on to station and operate, but that is just one extra ferry. My question is very pointed. Will hull 802 be on station and operational by early 2024, as the Government has announced?

Jenny Gilruth

In responding to Mr Mountain in relation to the hiring or renting of vessels, it is important to say that we have chartered the MV Arrow, which is currently covering the Uig outage, so is not true to say that the Government has not considered such opportunities.

Since May 2021, the Government has bought an additional vessel, the MV Loch Frisa, which is operating on the Oban to Craignure route. We have chartered the MV Arrow, as I mentioned, and we have made significant progress on the construction of vessels 801 and 802. We have commissioned two new vessels for Islay and confirmed the award of contracts for two new vessels for the Western Isles and Little Minch routes, supported by an additional £115 million of investment. We have progressed investment in key ports and harbours, including the completion of major works at Tarbert and Harris.

Ministerial responsibility for Ferguson Marine sits within a separate portfolio, but we remain absolutely committed to the completion of those vessels and to supporting our island communities that rely on that type of vessel.

Jenni Minto (Argyll and Bute) (SNP)

As the minister knows, every cancelled sailing impacts our island communities. As the minister said, second-hand tonnage has a key role to play here. CMAL recently told the Net Zero, Energy and Transport Committee that it had looked at a substantial number of vessels. Can the minister therefore set out some of the particular challenges of specification and suitability when it comes to trying to acquire additional tonnage for our ferry routes?

Jenny Gilruth

As the member knows, CMAL has undertaken extensive searches and continues to engage with ship brokers to look at vessels available worldwide that would be potential additions to the CalMac fleet. CMAL needs to consider a wide range of factors when it is looking at vessels, including the fit for the specific characteristics of our harbours, the condition of the vessel and, importantly, whether the vessel will be compatible with the requirements of the Maritime and Coastguard Agency.

As I mentioned, we were able to secure the MV Loch Frisa. As I confirmed to the Net Zero, Energy and Transport Committee last week and mentioned in my response to Mr Mountain, CMAL also made bids to purchase the MV Arrow and the MV Straitsman. Regrettably, we were unable to secure those vessels, but that demonstrates our willingness to secure suitable new tonnage when it becomes available.

Katy Clark (West Scotland) (Lab)

Does the minister accept that the scale of the disruption that is being faced by islanders is a direct result of the Scottish Government’s failure to adequately invest in new ferries since taking office? Bar the overdue ferries that are being built at Ferguson Marine, there still does not seem to be a strategy. In total, CMAL has examined 650 second-hand ships, most of which were found to be unsuitable. Will the Scottish Government commit to developing a long-term strategy to build capacity so that we can build and commission vessels here in Scotland?

Jenny Gilruth

There is a strategy. The first part of the draft islands connectivity plan, which was published in December last year, sets out quite clearly the future investment trajectory for this Government. If Ms Clark wants to look at that plan, I would commend it to her.

Secondly, if we look at overall investment by the Government from 2013-14 to 2022-23, we see that there has been a steady increase in our ferry fleet, so it is simply not true to characterise this as a lack of investment on the part of the Scottish Government. I would refute that point from Ms Clark. The most important thing now for our island communities is that we deliver the ferries that are on order and improve the services that they are receiving. That is what I am absolutely focused on as transport minister.

Graham Simpson (Central Scotland) (Con)

Ferguson Marine faced being struck off because it had not filed its accounts on time. Is there, as has been reported, an £11 million shortfall between what the firm has been asking for and what the Government has agreed to give it? Will that impact on the building of ferries?

Jenny Gilruth

As notified to the Public Audit Committee in December last year, the chief executive of Ferguson Marine expects the costs to complete both vessels to be £277 million. Scottish Government officials are working closely with Ferguson’s to review assumptions behind any revised costs and a schedule on how spend aligns to the vessels’ delivery.

Deposit Return Scheme (Payments)

3. Fergus Ewing

To ask the Scottish Government, in light of reports that small shops in Scotland fear they cannot survive because of the costs and impacts of the deposit return scheme, what its position is on Circularity Scotland’s confirmation on 1 March that retailers who use reverse vending machines would have to wait one month for payment for returned bottles, rather than the previously expected seven days. (S6T-01225)

The Minister for Green Skills, Circular Economy and Biodiversity (Lorna Slater)

The handling fee given to retailers to cover the costs of providing a return point for Scotland’s deposit return scheme is the highest such fee in the world.

The payment term for all manual return point operators and hospitality venues will be seven days; the payment term for larger locations that install automatic return points will be longer. Circularity Scotland has a wide membership of producers, trade associations and retailers. Any business with concerns should contact Circularity Scotland for advice and support.

Fergus Ewing

For the past 18 months, in all its documents, on its website and in its presentations, Circularity Scotland has confirmed that payments to retailers who provide reverse vending machines would be made within seven days. Tens of millions, if not hundreds of millions, of pounds have been invested on the basis of those commercial terms. Now, that seven-day period has been extended to one month. That decision was taken by Circularity Scotland after no consultation of convenience stores and there has been no explanation or press release. It is hidden away on page 23 of the document that I am holding.

I have three questions. First, does the minister agree that that decision by Circularity Scotland was taken in an underhand and sleekit fashion? Secondly, was she consulted on that decision? Thirdly, will she now order Circularity Scotland Limited to rescind that decision?

I remind members of the requirement that supplementary questions should be brief.

Lorna Slater

I can make the member aware of the context. Businesses offering return points in Scotland for Scotland’s deposit return scheme have three options. If they do not wish to apply to be a return point, and if they have reasonable grounds for exemption, they have the option to apply for an exemption and not to act as a return point. Exemption may be offered on health and safety grounds, including a lack of storage space, or on geographical grounds if a business is close to existing return points. [Interruption.]

Let us hear the minister.

Lorna Slater

The second option for businesses is to behave as a manual return point, which may be particularly suitable for small businesses of exactly the type that the member is concerned about. Convenience stores operating a manual return point, and with a small volume of returns, would probably find that option most convenient. Those small businesses, which are exactly the businesses that the member is concerned about, will receive payments after seven days.

For larger locations, such as large supermarkets, that need to have automated vending machines to provide larger capacity return points, the payment terms will be longer. That is unlikely to affect the small businesses that the member is so concerned about.

I remind the member that the scheme is industry-led, as was agreed by members from across the chamber, and that the fees relating to the scheme are therefore a matter for industry to decide.

Fergus Ewing

There is irrefutable proof that businesses have been misled, duped and deceived by Circularity Scotland. For the second week running, the minister has completely failed to answer relevant, pertinent and vital questions. I ask her again: was she consulted by CSL on the unwarranted, unheralded and non-consultative change from seven-day to one-month payment—if even that can ever be achieved under this scheme? Was she consulted: yes, or no?

Lorna Slater

Circularity Scotland is a private, non-profit company and is responsible for operating the scheme, which includes setting handling fees for retailers. As is set out in the DRS regulations, the Scottish Government is not involved in setting handling fees. The fee was agreed after an extensive knowledge gathering exercise, which included analysis and modelling by PricewaterhouseCoopers, the company appointed by the scheme members.

Maurice Golden (North East Scotland) (Con)

There are reports that Circularity Scotland dismissed the contributions of small producers as just “dust in the wind”. That serves to make small producers feel that the Scottish Government sees them as worthless. Many are already worried sick about the pigheaded planning of the scheme. Was the minister consulted on changes to retail handling fees: yes, or no?

I will give the member the same answer that I gave the previous member. As set out in DSR regulations—[Interruption.]

Minister, please give me a moment. Members, I am sure that we would all wish to be heard with respect—please afford the minister that courtesy.

As set out in the DRS regulations, the Scottish Government is not involved in setting retailer handling fees.

Colin Smyth (South Scotland) (Lab)

For clarification, can the minister say whether she was consulted on the changes in those handling fees? Yes or no?

Last week, we heard producers give a resounding vote of no confidence in the scheme, with less than 16 per cent registering. This week, it is retailers who are expressing concern. Pete Cheema of the Scottish Grocers Federation said that the scheme was not fit for purpose and that there is a real risk of thousands of stores closing due to cash flow issues or significant loss of footfall. Is it not a damning indictment of the minister’s handling of the scheme that just five months before she says that it will be introduced, businesses have not been given a clear blueprint for what should happen? The minister will still not answer the straightforward questions that members are asking.

Lorna Slater

Businesses have been given an operational blueprint, which was shared by Circularity Scotland last week.

Schemes of this type are in successful operation all over the world. I repeat what I said earlier: the return handling fees in Scotland are the highest when compared to other schemes around the world. Our businesses will do better than other businesses around the world in comparable schemes—[Interruption.]

I repeat: Circularity Scotland is a private non-profit company. It is responsible for operating the scheme, including setting retailer handling fees. The Scottish Government is not involved in setting retailer handling fees.

Mark Ruskell (Mid Scotland and Fife) (Green)

It is crucial that we continue to support small retailers to participate in the DRS. Not only will they be paid through the handling fee but there will be an opportunity for local shops to increase footfall. That is why the Federation of Independent Retailers is calling for there to be no delay to the scheme.

Can the minister outline what is being done to ensure that retailers are aware both of their obligations and of the opportunity that the scheme presents?

Lorna Slater

I appreciate the member’s question and his highlighting of the fact that those businesses that have invested in the scheme need the scheme to go live on 16 August, which is what the Scottish Government has committed to. Circularity Scotland has already contacted all retailers that have signed up for updates with information on the return point registration and exemption process. Retailers that have not signed up for those updates are encouraged to do so via the Circularity Scotland website.

Circularity Scotland will also be sending a direct mail to approximately 10,000 retailers across Scotland with information about retailer registration and the exemption process. Circularity Scotland has been in dialogue with more than 1,000 individuals at physical and online roadshows across Scotland. It is also conducting regular meetings with trade associations representing retailers, wholesalers, drinks producers and hospitality.

Christine Grahame (Midlothian South, Tweeddale and Lauderdale) (SNP)

The minister says that the scheme is industry led, but I have a letter that was published on 6 March, signed by among others, the director of the Confederation of British Industry Scotland, the policy chair of the Federation of Small Businesses, the chief executive of the Scottish Chambers of Commerce and the chief executive of the Scottish Council for Development and Industry, alongside hundreds of individuals who describe DRS in its current form as “reckless”. Will the minister, at very least, instruct Circularity Scotland to remove glass from the current recycling scheme?

Lorna Slater

Scotland’s deposit return scheme, which will go live in August 2023, will collect glass. Glass is one of the main three materials that is used to make single-use containers and accounts for more than a quarter of all the containers due to be included in our deposit return scheme.

Of the 44 territories operating deposit return schemes in the world, only four do not include glass. Glass is one of the most common items to pollute our beaches and broken glass poses a hazard to the public and to wildlife. It also poses a threat to local authority, private sector and voluntary clean-up crews. Including glass in the DRS will help to reduce the amount of littered glass.

The Scottish DRS business case suggested that including glass will save 1.2 megatonnes of CO2 equivalent over 25 years, and will significantly increase the quantity and quality of glass recyclate.

Stephen Kerr (Central Scotland) (Con)

On a point of order, Presiding Officer. In the interests of those who just watched topical questions, in particular the last topical question, and listened to the so-called answers that the minister offered, can you clarify for the viewing audience and for members whether a minister who is asked questions in the Parliament has an obligation in any sense to address the question that they are being asked? There were at least four occasions this afternoon when the minister was asked a very direct question and refused to give a clear answer. Surely that is unacceptable; surely that is disrespectful to the Parliament.

The Presiding Officer

Thank you, Mr Kerr. Although standing orders are silent on that particular issue, it is a matter of courtesy and respect to all members that responses address the questions that were put. There is also a requirement under the ministerial code on the issue.