Young People (Opportunities)
The next item of business is a debate on motion S3M-7737, in the name of Robin Harper, on opportunities for young people.
10:27
It gives me great pleasure, in my last Green party debate in this chamber, to focus on opportunities for young people, although I have to say that it is a matter of regret that, nearly 12 years after this Parliament was established, so many young people are still living in poverty in Scotland. That said, since devolution, some progress has been made for our young people and there have been successes of which this Parliament can genuinely be proud.
However, I believe that the creation of a Scottish youth microcredit scheme would be an innovative and influential way of helping to tackle the poverty that continues to hold our younger generation back. Indeed, there is probably never going to be a more pressing or urgent time to give attention to that important issue.
Many of our most vulnerable young people have already fallen through the safety net. They are not in education or on a training scheme; they are struggling financially with no support or assistance because of their age; and they are unable to find a job, especially in the challenging job market that they face just now. Around 36,000 young people—or more than the entire population of Stirling—are in precisely that situation in Scotland.
Our young people’s future is now being threatened by the most regressive and severe cuts to public and welfare services that their generation will ever see. I cannot—and will not—accept that situation. Throughout my years of teaching young people and working and campaigning with and for them, I have seen that they are simply fizzing with ideas and energy, ready for their latent talents to be recognised, seeking to be supported and allowed to flourish, ready and willing to work hard, ready to play their part in society and ready to make their contribution to building a better world.
Nobel prize winner Muhammad Yunus recognised that in Bangladesh. He recognised the creative drive and latent energy in his own communities and was inspired to find new ways for people living in poverty, especially Bangladeshi women, to access affordable finance as a means of starting up small businesses and social enterprises and breaking the cycle of intergenerational poverty. The end result was Grameen Bank, of which I know many members are aware. That novel form of entrepreneurial support has spread throughout the world, including the United States, and is now coming to Scotland.
Instead of seeing a substantial and growing number of our young people languishing in unemployment, we could be providing them with the supports that they need. We could be encouraging the most vulnerable young people I have described to start up small-scale retail operations, small urban food-growing initiatives or any other entrepreneurial activities that they see as an opportunity for self-employment.
To that end, we believe that a £2 million fund—which, as even the Cabinet Secretary for Finance and Sustainable Growth will agree, is a tiny sum in the great scheme of things—half of which would come from Scottish Government funds and half of which would be matched funding from business, would provide a solid start for a Scottish youth microcredit scheme for this group of young people. The experience of Grameen Bank suggests that such microcredit schemes have a very low default rate, which means that the fund would quickly become largely self-financing and could subsequently be expanded to support older participants.
We would not be starting from scratch. Scotland has a long and proud history of entrepreneurial achievement. We have inspirational figures—many of them, including Tom Farmer, from the world of business—who have shown a real commitment to helping the younger generation, and we have projects, such as those from the Prince’s Trust and Inspiring Scotland, that have demonstrated that it can be done.
We should congratulate business chambers such as Edinburgh Chamber of Commerce on starting the young enterprise guide programme, which is aimed at 16 to 24-year-olds—and is about to celebrate its second birthday—for successfully helping numbers of young people from all over Edinburgh to get into self-employment and start their own business. We should not forget the work of the enterprise and entrepreneurial schools programmes—many of which I have visited—that have been going for many years and have had such great success in encouraging our young people’s independence and self-confidence. Finally, I warmly welcome the work done by Glasgow Caledonian University to establish a Grameen bank in Scotland and to create a team of committed academics to monitor the progress of the microfinance scheme. We need to build on that enthusiasm and the entrepreneurial foundations that have already been set in Scotland and grow from having some projects here and some there to a national scheme that can learn from the successes of the internationally proven Grameen model.
I look forward to hearing from the minister a commitment to explore ways of establishing a Scottish youth microcredit scheme and to provide affordable loans and entrepreneurial mentoring on a Grameen-type basis for vulnerable young people right across Scotland. I know that at a meeting with Muhammad Yunus last summer, the Cabinet Secretary for Finance and Sustainable Growth offered a commitment to do all that he could to support Grameen programmes in Scotland, and I give him an opportunity to restate that commitment and explore a scheme that is specifically aimed at vulnerable young people.
I am sure that members throughout the chamber agree with me that it is not just young people themselves who pay the price for a lack of opportunities; the whole of Scottish society pays the same price.
I move,
That the Parliament commends the work of Nobel Prize winner Muhammad Yunus in founding, in 1976, the Grameen Bank, which provides microfinance for people living in poverty in Bangladesh; recognises that, since its beginnings in Bangladesh, there are now Grameen-type programmes tackling poverty across 38 countries around the world and that Grameen America is now branching out to many new locations in New York, Nebraska, Washington DC and California; believes that there is an opportunity to tackle the growing problem of unemployment among 16 to 19-year-olds with the establishment of a microcredit scheme for young people in Scotland; notes that this scheme could offer loans for small business ventures to young people who are not in education, employment or training and be supported by an entrepreneurial mentoring scheme; further believes that such a scheme would build on the contribution made by Scotland’s social enterprise sector and draw on Scotland’s long history of entrepreneurial achievement, and calls on the Scottish Government to explore ways to establish a Scottish youth microcredit scheme.
10:34
As a minister and a father, I applaud Robin Harper for his persistent and consistent view on this matter and for bringing this debate to the Parliament. After all, tackling youth unemployment is a top priority for this Government. History tells us that recession hits young people the hardest—they have been the first to lose their jobs and the last to benefit from the upturn—and that in such times, those who are furthest from the labour market, who in the best of times find it hard to get a job, get pushed back even further.
Moreover, frequent and long spells of unemployment for young people do lasting damage. In short, it can take a long time for young people to recover from a recession. Even today, some people who were affected by the recession in the 1980s are still paying a price. That is unacceptable, and we must not let it happen again. The issue is also one for the United Kingdom Government and other western Governments, given that there have been recessions in 1973 to 1975, 1980 to 1982, 1990 to 1992 and 2000, with the collapse of the internet bubble. The latest monumental manifestation struck in 2008.
We need concerted measures that learn from the likes of Minsky, who believed that our economic system is much less stable than it ought to be and that it produces much higher levels of instability than it should. We need measures that work and categorically remove the suspicion that asset bubbles, bouts of inflation, all-too-frequent recessions and subsequent stock market bounces advantage market speculators at the expense of the real economy, its competitiveness and future generations of young people. Such measures would tackle the core problem and help what we are doing with the powers at our disposal. We are putting in place a comprehensive package of employment and skills measures to tackle the symptoms and alleviate the real pressures that our young people are facing by complementing and building on an existing wide range of services and support for young people.
On the focus of the motion, the Government has a first-class track record on support for youth entrepreneurship. We start young. Our determined to succeed strategy for enterprise in education has entrepreneurial learning as a key strand of activity and £66 million in investment over the life of the Government. Delivered through the curriculum for excellence, the strategy engages directly with young people in primary 1 through to further education to ensure that they have an understanding of both the theory and practice of entrepreneurship. We have also developed a range of resources and materials that are aimed at engaging teachers and learners in developing an enthusiasm for and an understanding of private, social and co-operative enterprises to inform career choices that embrace the concept of entrepreneurialism.
We do much of our work in partnership. We have supported the work and development of the Co-operative Education Trust Scotland’s co-operate to succeed educational resources, and we have supported the Social Enterprise Academy to train teachers. We have also encouraged schools to pursue social enterprise schools status.
Local authorities are central to the approach. Through their efforts and with our support, there are now nearly 20,000 partnerships between schools and employers throughout Scotland. Through those partnerships, young people are increasingly understanding the relevance of their learning to the world of work. They are getting opportunities to see how French contributes to exporting, how English and maths combine to make a business case, and how team building and problem solving are essential attributes of even the smallest business. Our young people are thriving in that environment and demonstrating what many of us recognise as their innate and very Scottish entrepreneurial spirit.
The key message therefore has to be that Scotland’s new generation Y is well equipped. Young people are increasingly business savvy and information technology literate. They are able to use technology as digital native speakers. Those attributes and their desire for an ethical and environmentally sound future will make them challenging to employ, but who else can sell to and meet the needs of generation Y and who else can connect Scottish businesses to the other generation Y youngsters in the other 199 countries on the planet and their 7 billion people?
In addition, they have the obvious option of self-employment. Opportunities for people to start up in business, at whatever stage in life, can be fraught with real challenges. Access to finance has been and remains vital for people who want to start a business, and some of those who cannot get the money that they need from traditional sources—the banks—are finding things tough. Therefore, we welcome the strategic partnership between Grameen Bank and Glasgow Caledonian University and their efforts to establish a branch of Grameen Bank in the UK. It is clear that there are several issues to resolve in replicating the successes that Grameen Bank has enjoyed elsewhere, but some mainstream banks can take lessons from Banco Real in São Paulo, for example, which is blending the Grameen model with the traditional commercial banking approach.
I commend the role of the Prince’s Scottish Youth Business Trust in offering a package of support to young people throughout Scotland who are considering starting their own business and cannot secure funding elsewhere. Those people are normally aged between 18 and 25. In the past three years, the PSYBT has directly assisted more than 2,000 young people to set up some 1,850 businesses, which is a great achievement. Good initiatives are also coming forward from many other quarters as many more people locally and nationally realise that combined effort is needed and that we need a Scottish blend that works for Scotland. I will talk more about that in a moment.
We had no hesitation in addressing the specific challenges that last summer’s leavers from schools, colleges and universities faced. We invested more than £400,000 in a new entrepreneurial programme that recognises the importance of entrepreneurship to the Scottish economy. Currently, Young Enterprise Scotland and the PSYBT are working with young people to give them insights into self-employment and the basic skills and information that they need to start a business and a placement with a local entrepreneur.
Most recently, in December, I announced that there was more than £6.6 million of European funding to provide advice and support to small businesses and entrepreneurs, and to help to create more than 7,000 jobs, some of which will be targeted at young people. That approach will work alongside the business gateway to provide a tailored package of coaching and mentoring assistance to some 1,700 young people over the next three years, which will assist with harnessing the entrepreneurial spirit of young people and contribute to more young business ambassadors being profiled as role models. That should lead to sustainable increases in self-employment activity. Young entrepreneurs will act as role models and mentors and inspire the emerging future generations of young entrepreneurs.
The extended business gateway services throughout Scotland, with management transferred to local authorities, should allow more people to access not only the business gateway services but the wider economic development support that our local authorities deliver. It is important that the PSYBT continues to work closely with the business gateway to build on existing relationships and strengthen and develop services to assist more young people who wish to consider setting up in business as a viable option.
We have had very good sessions recently in which all the players have been brought together under the umbrella of the PSYBT to address how utilities, regulators, business organisations, the accountancy profession, colleges and so on can come together to get a better result. On the basis of this debate, we will go back to that approach to see what we can do. We will look at young people as a specific target audience, and specifically at utilising the skills that Robin Harper and I are passionate about and which we know can be harnessed in order to help the debate that we had yesterday about how we can internationalise Scotland and connect with future generations in many other countries.
I move amendment S3M-7737.1, to insert at end:
“building on the excellent work by the Prince’s Scottish Youth Business Trust in providing microfinance for business start-ups to 18 to 25-year-olds, the work of Glasgow Caledonian University in establishing a partnership with the Grameen Bank to develop the Grameen Caledonian Creative Lab and a Grameen Bank in Scotland and other organisations making a proactive effort and their own contributions in common cause.”
10:42
I am delighted to take part in the debate. I find myself following Mr Harper and Mr Mather, neither of whom is returning to the Parliament in May. I hope that it is not catching.
I am pleased that we have listening in the gallery some of the young people of Scotland as we debate issues that affect them.
Reducing poverty through microfinance banking is not just for developing economies, so Labour members whole-heartedly welcome what the Nobel peace prize winner Muhammad Yunus and his Grameen Bank promote. The Labour Party has supported that for a while—Gordon Brown sat down with Muhammad Yunus to discuss plans for Africa in 2008. President Barack Obama is also a big supporter. If it is good enough for Barack Obama and Gordon Brown, it is certainly good enough for me.
We welcome the creation of the Yunus centre for social business and health at Glasgow Caledonian University. The focus there on the impact of microfinance and related issues on health and on the lives of disadvantaged communities in Glasgow and overseas is a step forward.
Last year, Muhammad Yunus mentioned coming to Scotland in July to start talks about a branch of the Grameen Bank in Scotland. He said:
“Glasgow wanted Grameen Scotland. There are big problems in the city, with thousands of families in three generations of unemployment because of the welfare system. I said to them, a social business should be created to take ten people out of welfare and if it works, repeat it, and take all people out of the welfare system. In July I will go there and start talks.”
I am pleased that the minister mentioned that those talks are progressing.
We should move away from the notion that microfinance banking is just for developing countries. It is good to see that, in 2009, the first United States branch of the Grameen Bank lent $1.5 million dollars. That lending ranged from a few hundred dollars to a few thousand dollars to nearly 600 women with small business plans in the New York City borough of Queens.
As we have heard, social enterprise is already alive and well in Scotland. Grameen street fairs, where American borrowers sell their goods, ranging from food and flowers to clothes and jewellery, are not dissimilar to farmers markets in my constituency and others throughout Scotland.
As the minister and Mr Harper mentioned, schools run social enterprise programmes, which should be encouraged. The issue is how we harness the interest that the children have in the entrepreneurial sphere and translate it into the workforce. As we heard yesterday, youth unemployment is at its highest level for a generation in the United Kingdom. Surely if youngsters cannot get jobs, they should be encouraged to create their own.
Microcredit emphasises building the capacity of micro-entrepreneurs, employment generation, building trust and giving help during difficult times. As a tool for socioeconomic development, it can be very effective, but it is not without its risks. The idea of a Scottish youth microcredit scheme is plausible, but it comes down to funding. As Mr Harper said, a mere £2 million is all that it would require, but the start-up money would need to be found to administer the loans and to employ staff to provide support.
Next week, in Edinburgh, the young enterprise guide project will hold its second annual celebration of successfully helping young people to start in business. The event at Craigmillar business incubator project will showcase the achievements of young people from all over Edinburgh who have been assisted into self-employment and in starting their own businesses. It is aimed at young people aged 16 to 24 who are not in employment, education or training, and the project is delivered by Edinburgh Chamber of Commerce in partnership with the business gateway and the Prince’s Scottish Youth Business Trust.
It is not happening just in Edinburgh; schemes operate throughout Scotland and offer positive options for young people who are facing the grim prospect of unemployment. The idea of a Scottish youth microcredit system is welcome, but someone needs to provide one-to-one support to the young people at all stages of business development from the initial generation of ideas through to business planning, funding and aftercare support.
Since July 2009, approximately 520 young people have engaged with Edinburgh Chamber of Commerce, of whom 245 have so far started a business or become self-employed with the help of the project.
Large employers, such as the much-maligned Royal Bank of Scotland, work alongside charities such as the PSYBT. The RBS group’s relationship with the PSYBT has been refocused and is now concentrated on those who are described as being hardest to reach. In 2009, 46 RBS employees provided direct support to young entrepreneurs across Scotland either as volunteer panel members or as aftercare advisers with PSYBT.
As we have heard, Scottish Enterprise also operates a microcredit programme to enable more young people to address the issues of starting or developing a business. Its microcredit provides low-cost flexible loans, as well as help and support to enable businesses to start up and develop more effectively.
All those initiatives are welcome if we are to grow Scotland’s economy and support its social enterprise sector.
I move amendment S3M-7737.2, to insert at end:
“by discussing this idea with the Scottish League of Credit Unions and the Prince’s Scottish Youth Business Trust”.
10:48
I do not like to admit it, but it is more than a quarter of a century since I last sat in a university economics lecture. It is also over a quarter of a century since I was a young student teacher at Boroughmuir high school, where Robin Harper was a teacher of modern studies. The pupils said that they liked Robin Harper very much and that he was a terrific teacher, and that they liked best his colourful ties. Some things do not change. Likewise, some things do not change in economics. Certain principles stay very much the same: first, unemployment is bad; secondly, productivity is good; and, thirdly, individuals have the potential to be the greatest asset of any country.
Our hearts sink when we hear that the Scottish unemployment rate is rising three times faster than that in England, that the percentage of unemployed school leavers has risen by more than a percentage point in the last five years, that Scotland’s productivity rate is almost 5 per cent lower than the UK average, and that we have an education system that still, despite all its assets, fails properly to equip too many of our school leavers with the skills and knowledge that employers demand, and which pressures too many young people to go to university because there are not sufficient opportunities available for a non-university-based education. Indeed, that last point has become my party’s clarion call because it has identified the issue as being a fundamental problem that must be addressed if we are to claim that we are genuinely concerned about the economic and social advancement of Scotland. That is why I welcome the opportunity to debate Robin Harper’s motion, which has rightly identified the growing problem of unemployment among 16 to 19-year-olds.
Although I can agree with the general tone of the motion, it is our view that if we want to deliver the best possible opportunities for young people, there needs to be a more diverse range of opportunities even before they reach the age of 16. As far as we are concerned, there should be a clearly defined two-route system from 14 onwards, in which young people are able to choose the form and type of education that they would like to continue, be it largely skills based or more weighted in favour of academic pursuits. That demands that young people receive improved and much more varied advice in careers departments.
That system has been proved to be incredibly successful in countries such as Denmark and Germany. Those are countries where youth unemployment is lower than it is in Scotland, predominantly because their young people have become much better at defining their career paths and are better equipped with business skills. Nora Senior, who is vice-chairman of the Scottish Chambers of Commerce, said recently at a conference that
“there needs to be a whole-scale change to the way we talk about vocational and academic qualifications”.
I acknowledge the Scottish Government’s attempt to take that further. It is a view that has also been endorsed by Angela Knight, who is chief executive of the British Bankers Association. She rightly suggests that we will go much further if we improve the quality of the careers advice that we give to young people as early as secondary 1 and S2, so that they are given sufficient access to all the information that they need to make an informed choice.
Quite simply, if we as parliamentarians and Scots want to maximise the opportunities of our young people, it is not good enough to continue with the mediocre status quo of channelling all our children through a one-size-fits-all school system; an education, I suggest, for which they may in some cases have neither the inclination nor the aptitude to take best advantage. They have, however, other aptitudes, which would be much better utilised if they were given a different focus. The myth remains—it is a myth—that university is always a better place to be for fulfilling career aspirations.
If we want change, we must ensure that we are offering our school pupils a wider range of options at an earlier age—options that are flexible and which are backed up with the requisite support.
My colleague Gavin Brown will make comments about a Scottish youth microcredit scheme and how to engender a more entrepreneurial spirit. Any system that aspires to make entrepreneurs and wealth creators out of our young people is always worth a second look and, as Robin Harper rightly said, it is very much part of Scotland’s distinguished tradition. However, entrepreneurs need vision, they need direction and—crucially, I suggest—they need to posses the requisite skills and acumen to make the most of business.
I was interested this week to hear the Law Society of Scotland make strong recommendations that classes on legal issues, rights and responsibilities should be on offer in Scottish schools. That is a similar theme to the one that has been pursued in petition PE1354, which has been brought to the Scottish Parliament by the campaigner Stewart MacKenzie. The same can be said for classes on financial management and entrepreneurship.
That is why it is imperative that we make the changes that we have suggested in the debate. It is not enough, as the comparative evidence on microfinance suggests, to provide handouts while hoping that miracles will occur. Politicians need to show leadership.
10:52
The debate is welcome and we are supportive of the concept of microfinance and, indeed, of entrepreneurial education as a whole. We have heard that unemployment in Scotland has fallen by 5,000 from September to November and the labour market statistics show that employment in Scotland increased by 18,000 over the three months to November.
We all welcome those developments, but we all agree that there are still far too many young people facing unemployment in Scotland. One in five 16 to 24-year-olds is now out of work in the UK; that is the demographic that is being hit hardest by a very tough jobs market. Martina Milburn, the chief executive of the Prince’s Trust, warned that
“Britain is now perilously close to seeing one million young people struggling to find work”.
That is an immensely worrying statistic and it is a challenge to each and every one of us. Our young people are paying the price of the recession and are carrying too much of the burden.
I speak not only as a member of the Scottish Parliament and as a spokesperson on young people but, as many members know, as the mother of two new graduates who are trying to find jobs, so I know first hand from my family how difficult this period is. I also know from first-hand family experience that we have not got it right in terms of joined-up thinking to encourage our young people to go out and take the opportunities that might be available, and that the benefits system discourages young people from building their skills and from taking internships, but instead sends them home to their beds and offers them nothing in the way of business education and everything in the way of discouragement. We should ensure that at every opportunity and at every interface with every system of government, young people are encouraged to build a work ethic, to get out and build their skills and to do what they do best.
As we have come to expect, Robin Harper spoke eloquently about young people, their potential and creativity. We should be doing all that we can to support them, not grind them down.
On Monday, other Edinburgh MSPs and I heard from the director of finance at the City of Edinburgh Council about how young people are being frozen out of the jobs market in Edinburgh. Banks that traditionally took on Edinburgh school leavers are not recruiting them and more experienced older job applicants, many of whom come from the finance sector, are prepared to take entry-level jobs—school-leaver and university-graduate level jobs. We also heard how important it is that projects, such as the Capital City Partnership, continue to secure Scottish Government support. None of us in this chamber thinks that we are in anything other than difficult times and that there are difficult choices for Government. I hope that the Government, and each and every one of us, will keep young people and young unemployed people at the fronts of our minds as we make decisions over the coming weeks about the budget for this Parliament and Government.
Liberal Democrats are serious about skills and the future of Scotland and its workforce. It is not just about what is in the best interests of young people and what they deserve; it is also about what Scotland needs, given the demographic challenge that we face. I know that that aspiration is shared across the chamber, which is why we will support today’s motion that calls for the establishment of a Scottish youth microcredit scheme. We supported the idea back in 2007 when our manifesto set out our aim to be the first country in Europe to introduce microcredit schemes to support business and offer advice and training to people from low-income backgrounds to help lift them out of the cycle of deprivation.
We want to ensure that all children and young people get a fair chance at education, training and employment, but they must be offered the choice that is right for them. I agree very much with Elizabeth Smith that we should not set ourselves some random target of having 50 per cent of people go to university. The target that we should set is to give young people a choice so that they can decide what is best for them in their circumstances—their family life and experience. We must ensure that they have the choice to become entrepreneurs and to start their own businesses. Lots of good work is going on, such as the excellent young enterprise guide project in Edinburgh about which we heard earlier, and the work at Glasgow Caledonian University. We hear a lot of negativity about unemployment and the lack of employment opportunities, but that does not take away from the fact that a lot of good work is going on.
In the past couple of years, lots of good work has been done in the college sector, on which we have relied absolutely. It has flexibility and a can-do attitude, and it has worked with the partnership action for continuing employment scheme and the Government. Colleges are in our communities, working at local level and picking up on the skills that might be needed locally. It is therefore disappointing that the sector received the amount that it did from the Scottish budget. I say that genuinely without wishing to make any point to the Government other than to say that we will support it in any way we can to see whether we can make the situation more positive for Scottish colleges. They have played, and will play, a big part in our recovery.
Having spoken to constituents, I know that few things are more soul destroying than someone being given a college place and then finding that because of a lack of bursary in the college, they cannot take up the place, or that because of changes in bursaries, they have to make changes, possibly to their child care. We must take seriously that situation. We need to take away as many barriers as possible to people getting skills and training so that they can build the future that they want and deserve—a future that both they and we need. We must work to ensure that, as Scotland comes through recession, our young people are not left behind and that their skills, entrepreneurial spirit, endeavour and creativity build Scotland’s future for us. We in this chamber have to work together to do everything that we can right now to give young people the support that they need so that they are able to do just that.
10:59
I welcome today’s debate and firmly believe that any measures that can help businesses to thrive and survive, and which offer our young people opportunities to realise their full potential are worth serious consideration by this chamber.
The SNP Government has a good track record on such matters and although we can always do more, and intend to do so, that record must not be overlooked. Last year, our young people achieved the best higher pass rates ever recorded and 86 per cent of them left school to move on to a positive destination, including apprenticeships, college, employment and, of course, a free university education. Further to that, the small business bonus scheme helped to protect and grow small and medium-sized businesses, thus keeping more young Scots in work. However, we must do more to ensure that all our school leavers move on to positive destinations. Children from deprived areas, those who have additional support needs and looked-after children continue to be less likely to succeed in life. We must therefore continue to focus on the problem.
As the motion makes clear, the Grameen Bank is not a new idea. The first such scheme was founded in 1976 in Bangladesh by Nobel prize laureate Professor Muhammad Yunus to help to improve lives and reduce poverty in rural villages. It proved to be hugely successful. The possibility of having such a scheme in Scotland, however, is debateable because of the legal question: can someone who is claiming welfare benefits receive a Grameen loan? There is yet to be clarification from the Department of Work and Pensions to explain what flexibility, if any, might be available for Grameen borrowers.
Despite that, the Grameen Bank Trust recently set up a partnership with Glasgow Caledonian University with the aim of extending services in Scotland. On 5 July last year, Professor Pamela Gillies and Professor Muhammad Yunus met John Swinney and the chief executives of Social Investment Scotland and Scottish Financial Enterprise. The meeting was a great success, with the cabinet secretary describing the Grameen Bank as
“a very innovative proposal which has much to offer in terms of tackling social and economic challenges.”
Professor Yunus made the valid point that
“If it works in every single country, why can’t it work in Glasgow, why can’t it work in Scotland?”
There is a comparable organisation to the Grameen Bank that goes some way towards demonstrating how successful such projects can be. The Prince’s Scottish Youth Business Trust offers finance and support to young people living in Scotland who are aged between 18 and 25, or up to 30 if they are disabled, to help them to set up and run their own business if they are unable to get funding from anyone else. The trust aims to help up to 650 new businesses a year and to provide aftercare and mentoring to more than 1,200 businesses in Scotland. As well as that, the PSYBT offers start-up grants of up to £1,000, low-interest loans of up to £5,000, development loans of up to £25,000 to help grow existing businesses that have already received PSYBT funding, and test-marketing grants of up to £250 to help carry out marketing to show viability. Organisations and projects such as that are vital to our unlocking the entrepreneurial talent that lies dormant in many of our young people, and they contribute hugely not only to the lives of the young people but to wider Scottish society. For proof of that, I recommend that members read the case studies on the PSYBT website that highlight some of the exceptional small businesses that would never have started up otherwise.
The SNP is committed to unlocking the potential of our young people. Under our Administration, we are seeing more young people than ever move into training, employment and further and higher education, and we must build on our record. There are tough times ahead for the people of Scotland as Westminster cuts hit home. I hope and believe that innovative schemes, such as the PSYBT and the Grameen Bank, in partnership with the Scottish Government, can and will help to cushion the blow from the recession and secure employment for even more of our young people. The powers and resources of an independent Scotland would also help.
11:03
I am pleased to take part in this morning’s debate. Robin Harper has always brought to this chamber complete commitment and a genuine desire to make Scotland a better place. His proposals to improve access to finance for young people who are looking to set up their own businesses, co-operatives or community initiatives are worthy of further consideration.
As David Whitton outlined, in government Labour was at the forefront of promoting the Grameen Bank as part of the UK’s international development work. We agree that further exploration of microcredit schemes for young people is to be welcomed and encouraged in Scotland.
Young people are facing challenging times. Communities throughout Scotland are feeling the effects of tough economic times, but that is particularly acute when someone is just starting out in adult life with fewer life and employment skills to fall back on and when guidance and support are needed. Without opportunity, all that can be denied or rejected. Any models or initiatives that provide opportunities or options for young people are worthy of our consideration. We must do all that within the context of some of the more positive work that already happens in Scotland. Our amendment and the minister’s highlight some of that work.
We face challenges. In Fife, there has been a worrying 57 per cent rise in long-term youth unemployment. The problem is even more concentrated in Glenrothes, Methil and Leven, which together have the highest number of young people out of work in Fife. We have given a commitment to create a Scottish future jobs fund. More than 250 young people in Fife benefited from the future jobs fund. I met young people based at Rathbone training centre in Glenrothes who are benefiting hugely from the scheme and are extremely positive about the impact that it is having on their lives and future employability. We must do all that we can to provide such opportunities.
The availability of microcredit offers an alternative option for young people to create new enterprises. However, as Robin Harper’s motion recognises, that must be done with support and mentoring. There is still some way for Scotland to go for it to be a truly enterprising culture that is open and attractive to more people from all kinds of communities. It is about instilling confidence and about understanding success, risk and—increasingly—social responsibility and community investment. Those values and attributes will encourage young people into enterprise.
Although Fife has some worrying youth unemployment figures, it is in Fife that I have recently seen some excellent work in raising young people’s aspirations and confidence. Last year, Caskieberran primary school in Glenrothes was the only primary school engaging in Young Enterprise Scotland. The school worked with Lomond Homes, and it is to the credit of Alan Seath of Lomond Homes that a strong relationship was created, in which both partners devoted time and energy to the project. Alan Seath—the Alan Sugar of Caskieberran primary—provided mentoring, support and real business insight.
Who has he fired?
He hires them; he does not fire them. They are only primary school children.
Last year, the pupils made jewellery. This year, they grew into TEAM—“to entertain and motivate”. Caskieberran was the first primary school in Scotland to take part in an exciting enterprise project when it worked on behalf of Tree of Knowledge to organise a corporate event. The event, which took place last Friday at the Balbirnie House hotel in Markinch, was excellent and professionally organised. It was fascinating to talk to the teachers, who described it as being unlike any other event that they have been involved in at the school. They described school projects as being extremely planned and controlled, in contrast to the world of business or corporate event planning, which they had been thrown into with a team of 11-year-olds. The project provided excitement, uncertainty, flexibility and responsiveness in business planning that they could never have provided to the pupils as a school. It was engagement with business that brought them to that experience. I was really impressed with the scale of the challenge that the school took on and in which it succeeded. The teachers talked of the tremendous increase in confidence of the young people. They learned skills in the project that they might never otherwise have had the opportunity to learn. I am confident that in a few years, some of them will be looking for microcredit.
I highlight another example of sheer entrepreneurial spirit and spark: Fife Youth Radio. I first met its participants a few months ago when I visited their studio on the day that they launched. They put me on the spot and asked me which record I wanted them to play. It is on such occasions that we realise how old we are. Fife Youth Radio is an online radio station. The skills that the young people are learning are significant and transferable. What is so impressive about Fife Youth Radio is the level of responsibility, self-motivation and ownership that it has given the young people who are involved. They have taken part in training that is run by Young Scot and the BBC and they are entering a major partnership deal with O2. Their approach to the project has been entrepreneurial, and their partners have fostered that approach by providing leadership training and mentoring.
The work of Fife Youth Radio shows huge initiative. I want to ensure that the energy, skills and enthusiasm that its participants have gained in the project and that young people have gained in other projects throughout Scotland are given the opportunity to flourish in the social enterprise and/or business sector. We should all work together to explore schemes or initiatives that can help young people to realise what their business dream is and to make it happen.
11:09
I rise to speak fairly sure in the knowledge that my main qualification in the eyes of the SNP whips is that I am the second-youngest member of the Parliament, although that probably does not qualify me as young in the eyes of most of Scotland’s young people. If Aileen Campbell had been available she would probably have been the first port of call for the party whips. Nonetheless I am happy to contribute to the debate. [Interruption.] I am not sure what the kerfuffle was among the Liberal Democrat members. They seem to be rather excited about something.
I echo Jim Mather’s point about the impact on young people in times of economic difficulty, which is why it is important to have a debate such as this. The Government has a strong record of support for opportunities for young people. I will return to that, if I have time. The ideas in the motion are in the context of the Grameen Bank. I confess that I was not really aware of its work in detail, although I was aware of its existence. It was only in preparing for the debate that I learned a little bit more about it.
Since its inception in the 1970s, the initiative has loaned more than $10 billion to more than 8 million borrowers, the vast majority of them being women and people who live in poor rural villages in the developing world.
The word “grameen” can mean rural or village. In the context of the Grameen Bank, it embodies ideas of community and co-operation, and recognises the mutual dependency and mutual benefits that we must all share if we want to succeed and build better societies.
The Grameen Bank model has been successfully adapted to poverty reduction initiatives in 38 countries around the world. It lends small amounts at affordable interest rates for projects that allow individuals and communities to make a living for themselves. It provides an alternative to loan sharks and a source of funding in circumstances in which the more traditional banks refuse to lend. The threat of loan sharks and the lack of support from traditional banks are undoubtedly faced by many households, businesses and—as the motion states—young people in Scotland today.
Scotland has a long and proud tradition of sensible and sustainable lending practices, whether through the network of credit unions around the country—as Mr Whitton’s amendment rightly noted—or in the legacy of our savings banks, which are now represented proudly but, sadly, uniquely by the Airdrie Savings Bank, which we have acknowledged in the Parliament in recent months.
Nevertheless, it is well worth exploring how the specific Grameen model can be adapted to Scotland. There is much to look forward to in the work of the Grameen Caledonian creative lab that has been established at Glasgow Caledonian University. Like Robin Harper, I welcome that work. Last year, the Cabinet Secretary for Finance and Sustainable Growth met Professor Yunus and the principal of the university to discuss how the project can be taken forward. I am sure that we will hear more about the Scottish Government’s support for the initiative from the minister at the end of the debate. I hope that that gives Green members some comfort that their desire to see Scotland’s young people supported in accessible and innovative ways is shared by others.
I turn to some examples of support for young people that have been delivered by the Scottish Government. Responding to the difficult economic times that we are in, in June last year Keith Brown, the then Minister for Skills and Lifelong Learning, announced a special package to support young people moving from school into the employment market. It included 800 vocational pathway opportunities for 16 and 17-year-olds; a £1,000 incentive for up to 2,000 employers to offer modern apprenticeships to young people; 750 graduate placements over the next three years; 1,000 volunteering opportunities; and access to 5,000 all-age modern apprenticeships. In 2009-10, nearly 87 per cent of school leavers went on to positive destinations such as employment or further education.
Liz Smith made the point that higher education may not be the be-all and end-all. School leavers who go to university in Scotland now benefit from the restoration of free higher education by the Scottish Government. Thousands of graduates benefit from that decision, and 20,000 part-time students each academic year are benefiting from a new £500 grant. The Scottish Government has prioritised opportunities for young people that parties in other parts of the United Kingdom seek to deny to future generations.
We should welcome new ideas, such as those that were suggested by Robin Harper. The ability of the Parliament and the Scottish Government to leverage finance and to find new funding for schemes such as microfinance and Grameen Bank projects is limited by the terms of the current devolution settlement. If we really want to raise the vision and aspirations of our young people, perhaps we should start by aspiring to be a Parliament that has the normal powers of the countries that are cited in Robin Harper’s motion, not the least of which is Bangladesh, which I recall has been traduced in the past by prominent Scottish unionists. Those normal powers are, of course, the powers of independence.
11:14
This has been a relatively consensual debate. That does not reflect the fact that we are getting closer to 5 May, but it does reflect the consensus in the Parliament in relation to the role of organisations such as the Grameen Bank. Members have spoken fulsomely about the quality of life that the bank has brought to people in Bangladesh, the United States and other places where it is located. Like others, I would like to see the continued development of the project in Scotland.
It is clear that many members have a much firmer grasp of the subject than I do. I was a little worried by Elizabeth Smith’s speech, because I thought for a moment that she had forgotten that we were not having an education debate, but her points were well made.
A legitimate concern, which Margaret Smith reflected, is about the tendency—it is not quite dictatorial—to push kids up one path at the age of 13 or 14. We have the opportunity to give them at that age at least an informed choice about whether the academic world is for them or whether they are more inclined to travel down the path of an apprenticeship or something that is more practical and vocational. As Margaret Smith said, politicians tend to make arbitrary statements in this place and other places about what is best.
In this consensual debate, we have not yet touched on one issue that has an impact not just on all our young people but particularly on our young people from deprived communities. As I represent large chunks of Lanarkshire, I am acutely aware of the challenges that are faced by communities in Lanarkshire and across the central belt, some of which are the most deprived and vulnerable.
I will stick with the theme of opportunity. I am convinced that people in such communities lack the opportunity to have hope—to look beyond the horizons of the communities in which they find themselves and to realise that things can and should be better. One mechanism for providing that opportunity, outwith the structured way in which we run education, is volunteering.
If we are to offer opportunities to potential entrepreneurs or mini-Alan Sugars—I do not know whether I like that thought, but there you go; perhaps we could use other role models such as Tom Hunter or Tom Farmer—we need to find a mechanism for showing people that they can look beyond the horizon. I have no doubt that the entrepreneurs whom we all know about did not think, “I’m going to be an entrepreneur.” Many of them thought, “I’m going to keep bread on the table,” or “I’m going to get myself something to do that brings money into my pocket.” The more abstract concept has been retrospectively attached to such people and was not present in their minds.
Volunteering in all its senses has a huge role in widening horizons, raising aspiration and providing opportunity. Margaret Smith touched on the fact that the Governments in Westminster and here need to have a conversation if we are to grow participation in volunteering, because the development of a volunteering spirit and attitude clashes with the strictures of the rules of the Department for Work and Pensions.
Will Hugh O’Donnell take an intervention?
I always worry about taking an intervention from my colleague Margaret Smith.
Hugh O’Donnell can take a quick intervention, after which he should conclude.
One great aspect of volunteering that involves a large time commitment is that it helps to build a work ethic as well as skills. Those qualities are utterly transferable to people trying to get jobs. If the DWP and others do not understand that, they are not doing their jobs properly.
I would not dare to disagree with that or with much else that Margaret Smith says.
When the Scottish Government considers the issues that I and others have talked about, I draw its attention to deeper involvement by Scotland in the European voluntary service, which the European Union provides and supports with funds. That brings an international element to volunteering.
11:19
Robin Harper might just be on to something. His motion is positive. He used the word “innovative” to describe the proposal, which it is. It is also highly practical. I like the fact that it is designed to solve a specific, difficult and intractable problem. The motion is specific because it focuses on 16 to 19-year-olds, who have suffered disproportionately in the recession. Anything that could improve the lot of our young people must be explored, as Robin Harper’s motion says. It has been good to hear that everybody across the chamber is open-minded about the suggestion and thinks that it is definitely worthy of being taken forward.
Before considering the proposal’s strengths and commenting on it, I will say that the Conservatives concur with what Jim Mather and David Whitton said about the PSYBT, which is an excellent organisation. A couple of years ago, I read that Tom Hunter had said that if the PSYBT did not exist, it would have to be invented. That is absolutely right.
One reason why the timing of Robin Harper’s proposal is appropriate is that, in the current climate, a gap exists in the market because of the financial crisis. Many banks and other institutions are reluctant to lend and certainly to lend on the criteria on which they used to lend. Even some viable running businesses are finding it difficult to obtain credit, overdrafts and access to the facilities that they need. Those difficulties are magnified for young people who have no track record in business and who might not have access to other funds. A gap exists in the market in general and in particular for the people with whom Robin Harper hopes to connect in his motion.
There is a specific group of people who have no money and no access to capital or savings—all that they have is a terrific idea that could make money, put bread on the table and do far more than that. For such people, the suggestion of a Scottish youth microcredit scheme is strong.
As everybody has said—the motion also makes the point—it would be important to ensure that repayment rates were as high as they have been in other countries and to combine the funding with the suggested mentoring. In many cases, funds alone would be insufficient to ensure that a business thrived and succeeded—they would have to go hand in hand with mentoring.
We have talked about microcredit and small businesses, but it is important that mentors do not teach businesses to think small or in micro terms. Some businesses might end up only ever being small, but some might end up as gems. Duncan Bannatyne, who is a multimillionaire and who of course appears on “Dragons’ Den”, started his entrepreneurial career as a young man simply by delivering newspapers to far more houses in his area than had previously received them. That entrepreneurial spirit, which was crafted at a pretty young age, along with a load of other attributes, led to his being a success. It is important that mentors do not think small, even though the initial sums will be small.
My time is practically up. The idea is good and should be explored. With the consensus in the chamber today, I have no doubt that it will be explored.
11:24
I am interested to hear that Duncan Bannatyne started his business by selling newspapers. I had my own newspaper delivery business when I was 18. Perhaps I should have stuck at it—who knows what would have happened?
In his opening speech, Mr Harper said that this was his last Green debate in the chamber. I do not often have the chance to debate with him, so I take the opportunity to pay tribute to his contribution—some would say his colourful contribution—to this place since 1999.
I interviewed Mr Harper at Boroughmuir high school when I worked for a political TV programme. As we stood in the playground trying to get the interview done, it was clear that his pupils regarded him as a kind of Scottish Mr Chips—a description that I hope he will accept in the spirit in which it is given. His on-going interest in the welfare not only of his pupils but all young Scots is a fitting tribute to his work as a parliamentarian—the first Green to be elected to a Parliament in the UK. His choice of topic for debate today is typical of the man.
We can all accept that the success of the Grameen Bank has inspired the world, but we also have to recognise that it has proved difficult to replicate its success. In nations with lower population densities, meeting the operating costs of retail branches that serve nearby customers has proven considerably more challenging. Let us face it: subsidies from donors and Government are scarce and uncertain. In order to reach large numbers of poor people—or, indeed, the growing number of our unemployed 16 to 19-year-olds—microfinance must pay for itself. That could prove difficult in the current economic climate.
In Scotland, we also have the issue of welfare benefits. Obtaining a loan to start up a business can have all types of ramifications for benefit claims. That area needs to be developed further. In that regard, I have some sympathy with Margaret Smith’s intervention on her colleague, Mr O’Donnell.
Community-supported lending is not new. From the pre-war tenement support groups to the credit unions that we see throughout Scotland today, there is a rich history of social enterprise. There are already schemes throughout Scotland that offer loans for small business ventures to young people who are not in education, employment or training. Those schemes also offer supported entrepreneurial mentoring. Perhaps we should concentrate more on growing schemes that are already in existence. We have talked a lot about the Prince’s Scottish Youth Business Trust. Since its inception in 1989, the PSYBT has helped more than 12,000 individuals to start more than 10,000 businesses, of which more than 80 per cent continue to trade after their first year in business and 60 per cent are still trading after three years. This year, the PSYBT launched an innovation fund, which is still in its pilot stage. The fund aims to help 18 to 25-year-olds—I know that that group falls partly outwith the age bracket that Mr Harper is talking about—who have an innovative concept or product to secure funding to take their idea to the next stage.
There are other schemes, such as the Shell LiveWIRE scheme, which is the UK’s biggest online community for young entrepreneurs aged 16 to 30 who are starting up or running their own business. The scheme offers new start-ups free online business advice and support, and funding and networking opportunities. Shell LiveWIRE is one of the company’s social investment programmes. Since 1982, it has helped more than 600,000 young people in the UK to explore starting their own business. It offers an independent service with no costs or strings attached.
Developing future entrepreneurs through a peer-led support service with user-generated content seems to be the way forward. I firmly support my colleague Claire Baker’s view, which we heard earlier, that we should start such support not at secondary but primary school level—Caskieberran primary school in Glenrothes is an example. We should concentrate not only on young entrepreneurs but teen entrepreneurs or pre-teen entrepreneurs. A good example is the young man from Edinburgh, Fraser Doherty, who has spoken in the Parliament. After being taught to make jam using his Granny’s secret recipe at the age of 14, he has built a business that now supplies all the UK’s major supermarkets with his SuperJam.
Wind up, please.
I will, Presiding Officer.
Fraser Doherty is the kind of example that we need to look at. Let us concentrate on the talent that we have. Last year, a number of entrepreneurs gave £10 million to the Airdrie Savings Bank. Would it not be great if they were to donate even half as much to get the Harper Grameen Bank started?
11:29
I am very much aware that Robin Harper has an infectious enthusiasm for young people. I have had the privilege of witnessing him interact with young people in schools in and around Livingston. I am glad to support his motion today. As other speakers have said, he is a very colourful character. The motion is typical of his imagination, his flair and his commitment to young people the length and breadth of Scotland.
Recession hits young people the hardest. Unemployment can do long-term damage to the young; it scars individuals and communities. We must learn the lessons of previous recessions and ensure that never again is a generation of young people written off. That means that we must support young people, recognising that they all have different ambitions and needs, as Margaret Smith and Hugh O’Donnell stated. For some young people, that is about helping them to create and grow their own business. Self-employment is the lifeblood of our economy. It is hugely important in the current economic climate when the jobs simply are not there. In supporting the motion, the Government will explore ways of establishing a Scottish youth microcredit scheme.
As many speakers, including Margaret Smith, Kenny Gibson and David Whitton, acknowledged, the crucial issue in establishing Grameen in the UK is that of resolving problems and interactions with the welfare benefits system. We have to rid the system of any disincentives. We have to recognise that, in supporting young people to transform themselves from a state of dependency to one of independence—a notion that I fully support—transitional funding will be needed. I hope that the Conservatives and Liberal Democrats will take that forward with their Government in London—the UK Government. In the very near future, along with Nicola Sturgeon and Alex Neil, I will meet Lord Freud to discuss a number of welfare reform issues.
As Jim Mather said in his opening speech, this Government remains committed to tackling youth unemployment. We have the immediate and pressing challenges that are associated with the recession. Youth unemployment in Scotland is currently at 17.9 per cent. Although the figure is lower than that for the United Kingdom, it remains too high. We are talking about the lives and futures of some 70,000 individuals. I accept Claire Baker’s point that the rate of young unemployment is much higher in some of our communities.
We remain focused on the more fundamental change that is needed to tackle the unacceptable and endemic problem of youth unemployment. Although there is no silver bullet, collaboration between public, private and voluntary sectors is essential if we are to reach out to more young people who face particular barriers in their life to ensure that they, too, get their fair share of Scotland’s economic growth.
I am confident that this Government has a robust and clear plan, the aim of which is to support young people to make more successful transitions to adulthood and the world of work. In essence, this is about our substantial investment in skills: £120 million for new training opportunities, of which £60 million is focused on modern apprenticeships.
Mr Mather described the great work that is being done in schools, whether through the curriculum for excellence or determined to succeed. Unlike Elizabeth Smith, I prefer to think that our cup is half full as opposed to half empty.
Of course, our further education colleges promote entrepreneurship, too. They do that at a fundamental level through their hands-on approach to vocational training. Only last week, I had the privilege of visiting Adam Smith College in Fife to help to launch the education into enterprise scheme. The programme will support 1,000 college students on higher education courses to take up work placements with small and medium-sized businesses and third sector organisations.
The minister needs to wind up.
I will conclude, Presiding Officer.
There are many good things that I have not had time to mention, including the retention of the education maintenance allowance and our commitment to free higher education and training.
I have listened with interest to comments on funding for student support. This Government has invested record levels in student support—
I really must press you to close, minister.
We are always open to suggestions on how to improve the lives of students the length and breadth of Scotland.
11:35
This has been a good debate. I will try to say a few words about everything that members have said.
I thank Jim Mather for giving us a comprehensive introduction to everything that is happening at present, especially at the Government’s behest. However, if we add up the sums that various people have mentioned, we find that we are spending close to £100 million on the issue of young people and employment, so £2 million for a Grameen start-up would not be excessive.
It is important that I make a couple of general points. For me, the excitement of Grameen banking is that it is about not just finance but trust and people working together—it is a social and community thing that will give social capital and social cohesiveness to any area of Scotland in which it is introduced.
I thank David Whitton for his kind remarks; I remember clearly the special day at Boroughmuir to which he referred. However, I resist any suggestion that we are already doing enough things and that we just need to develop them. We cannot do enough. Any new idea must be tested and taken forward along with everything else.
Almost every member who spoke mentioned the importance of harnessing young people’s potential, which is critical. It is important to pick up on one or two points about the educational system. I thank Liz Smith for mentioning those halcyon days at Boroughmuir. I was interested to hear her comments on the approaches that are taken to young people in German and Danish education. They go along with the idea of parity of esteem for every child in our schools, which means parity of esteem for career paths.
We should not use an examination system to divide the children in our schools into those who are successful—the fifth and sixth year students who go on to university and gather in a hall for prize givings at which loads of books and little silver cups are given out to everyone—and the so-called fourth-year leavers, whom we should rather see as people who are going into jobs, seizing opportunities and going to colleges. Over the past 15 years, the work that the colleges are doing with young people has changed out of sight; those young people are now leaving with confidence and skills. We and our secondary education system must acknowledge that that is a good career path. That is the parity of esteem that the curriculum for excellence will deliver.
Last week I was at Broughton high school, so I would like for a moment to mention the effect of the cuts. The educational system must bear a share of the cuts, but the Government must be conscious of the fact that cuts are now biting so deeply into the budgets of some of our secondary schools that they will have difficulty delivering the curriculum for excellence, which is the basis of what we are talking about today—having our children leave schools competent, confident, with empathy and with the ability to assess risks, so that they can lead successful lives. Margaret Smith raised that issue. I greatly appreciated her remarks.
I thank Gavin Brown for his clear analysis of the situation and support for the motion. His remarks reminded me that, as well as mentioning Tom Farmer, I should have mentioned Tom Hunter, because he has made a significant contribution in the area.
Claire Baker spoke about primary education in Fife. I have heard about the event at the Balbirnie House hotel that she mentioned, which is an extremely exciting development. However, although we are doing a lot of wonderful work in our schools and colleges to equip young people to be successful entrepreneurs, there is still a problem. I equate it to the situation of school councils. People are elected to school councils, go through all the processes and learn about democracy, but nothing happens, because they do not have a budget to spend. We must back up what we do. If we are to have young entrepreneurs and if children are to be taught how to be entrepreneurs—
Mr Harper, I must ask you to close.
I thank everyone for their agreement. I will vote for all the amendments and my motion. I thank members for a very nice debate.