Supporting Employment
The next item of business is a debate on motion S3M-4187, in the name of John Park, on supporting employment in Scotland.
I welcome the opportunity to open this debate on behalf of the Labour Party.
Day after day, we hear of more Scots facing unemployment. Behind every statistic is a person who has lost their job and who will face a level of uncertainty in their life that will affect not only them but their families. I am sure that, like me, many MSPs regularly meet constituents who have lost their jobs or who need help in dealing with the consequences of losing their jobs. We shoulder that individual responsibility on a day-to-day basis, but we also shoulder a collective responsibility—here in Scotland and at United Kingdom level—to ensure that as much as possible is being done to support businesses and to support both people who are in work and those who are out of work.
The Scottish Government has at its disposal some very important levers for economic development, workplace training and supporting people who face redundancy. Through the devolution settlement, we can have Scottish solutions to Scottish problems while benefiting from being part of a wider UK economy.
I am sure that the Minister for Enterprise, Energy and Tourism and the Cabinet Secretary for Education and Lifelong Learning will hear concerns in the debate about the gap between Government rhetoric and the reality for our communities and people who are concerned about their employment. In times such as these, people look to Governments for help. That is why our motion focuses on a number of key suggestions that we believe will help to ensure that the Scottish Government can more effectively deliver help and assistance to people throughout Scotland.
In this year's budget negotiations, the Labour Party focused on apprenticeships and support for people facing redundancy because we believed that that would mean that Government support would be more effective. We were happy that the Government agreed to a 73 per cent increase in apprenticeship numbers and said that it would guarantee that all apprentices facing redundancy would be able to complete their training. We were happy not for ourselves but for the thousands of Scots—including many young men and women—whom those measures would support.
However, since that agreement in February, more than 1,000 apprentices have been made redundant. Only 321 have found alternative employment. Some 547 still need to find a way to complete their training and, most worryingly, 154 have just disappeared into thin air. That figure of 154 might not sound like a lot, but if we were even to make a conservative estimate that most of them had completed about 18 months of training, that amounts to 200 years' worth of training potentially down the drain.
I know that the member has taken a keen interest in this area. I can tell him that we will be making announcements shortly about further aspects of the apprenticeship scheme proposals. Does he recognise that the statistics for those not completing their training are similar to those for previous years? Does he accept that our big challenge is to ensure that those who can be placed in other employment are supported? Will he support us when we bring forward proposals in that regard in the next few weeks?
I am coming to what the Scottish Government can do to support the apprentices, but I will first deal with the comparison that has been made with Northern Ireland. There, 300 apprentices have been made redundant in the period that we are talking about and only 11 have disappeared. Clearly, Northern Ireland is getting something right and we are, perhaps, not dealing with the issue in the way that we should.
We recognise that supporting redundant apprentices and expanding the system is a challenge, and that there are no easy options right now. That is why we were pleased that the Scottish Government also agreed to hold an apprenticeship summit. I was fortunate enough to be able to attend that event in April, along with key people from training and industry. At the summit, I heard many ideas and suggestions about ways in which redundant apprentices could be supported, but those ideas have to be delivered.
Timescales are tight, which is why our motion calls on the Scottish Government to outline how it intends to deliver the extra 7,800 apprenticeships places agreed for 2009. We need it to do that before the summer recess. Failure to deliver will have a negative impact on our skills base not only next year and the year after that but three, four and five years down the line.
On 1 April, at the Scottish National Party's spring conference, the First Minister announced 75,000 training places. We need clarity on those figures. When the skills strategy was launched in September 2007, we were promised 50,000 training places over the course of this parliamentary session. Could the Cabinet Secretary for Education and Lifelong Learning clarify whether that figure of 75,000 is the new total number of training places that will be delivered or is additional to the previously announced 50,000 training places, which is clearly what the First Minister hinted at when he spoke about those "new opportunities". Our motion calls for more information about those opportunities because, in the current economic climate, the public expect Government to be about action, not just headlines.
The support that is provided by partnership action for continuing employment—PACE—for individuals facing redundancy is vital. However, from previous recessions, we have learned that it is also vital that we support viable businesses to keep people in work so that the most can be made of the upturn.
Previously, I have highlighted steps that have been taken in Northern Ireland to support redundant apprentices, and our motion also highlights the ProAct initiative that has been developed in Wales by our other Celtic neighbours. For those who do not know the programme, its aim is
"to help businesses cope with the downturn, and use quiet time to develop staff skills ready for the upturn."
ProAct is available to businesses that have introduced short-time working and face the threat of redundancies. It covers training costs of up to £2,000 per individual and a wage subsidy of up to £2,000 per individual during that training.
As I said earlier, there will always be Scottish solutions to Scottish problems, but that should not prevent us from considering good ideas from other countries. In many ways, we are similar to Wales, particularly in terms of the size and spread of our small businesses, so we should give the ProAct initiative our full consideration.
In conclusion, I would like to say a little about the Scottish Government's economic recovery programme. One of the things that have surprised many in this recession has been the pace of change. Many things that would have been unthinkable this time last year have been utterly necessary for the economic recovery.
The pace of change is the main reason for our final suggestion this morning, which is that the Scottish Government bring back to the Parliament a renewed economic recovery programme before the summer recess. That programme needs to cover the issues that I have spoken about and tell us how the 7,800 apprentices will be delivered and what plans will be in place to support the redundant apprentices who have not found a way to complete their training. The Government also needs to tell us whether it will consider the ProAct initiative that has been forced through in Wales.
I am sure that the Scottish Government is in regular dialogue with industry stakeholders, particularly now, because of the problems that we have, and that many of those stakeholders will be making constructive suggestions about the type of support that they need in order to help to support economic activity. However, as is the case with the apprenticeship summit, dialogue is good but subsequent action from Government is far better.
I move,
That the Parliament is concerned that 34,000 extra Scots were out of a job in the last year and that many live under the threat of redundancy; recognises that government support for business and individuals is vital in the current climate; calls on the Scottish Government to examine the ProAct scheme developed by the Welsh Assembly Government, which supports businesses on short-time working, with a view to developing a similar initiative in Scotland; further recognises the seriousness of the economic situation in Scotland; believes that the Scottish Government should bring forward a new and revised economic recovery programme prior to summer recess, and calls for such a plan to outline how the Scottish Government intends to deliver the extra 7,800 apprenticeship places agreed for 2009 and the 75,000 training places announced by the First Minister on 18 April 2009.
I welcome the debate. Quite rightly, during such difficult times, there have been calls for radical action to be taken to protect employment. The Scottish Government is extremely alert to the need to support employment for people throughout Scotland. We are keen to see skills and key workers retained in sectors of the Scottish economy as we work towards the economic recovery. We are keen to do whatever we can to empower Scottish businesses to take the fullest advantage of the opportunities that lie ahead. That is why we are carefully considering calls for wage subsidies and other interventions to protect and sustain employment.
As we move through the current economic crisis, there has been much discussion about the merits or otherwise of wage subsidies, and various models have emerged in various countries, including the Welsh ProAct model that John Park mentioned. That model has clear advantages for the Welsh economy and was chosen by the National Assembly for Wales because of the scale and shape of the Welsh economy. However, the Scottish economy is different in structural composition from that of Wales and is at a different stage of economic development, and we have to consider what will work well in the Scottish context. The Government is actively considering options for wage subsidy, including models to support individual sectors, models to support those facing redundancy and models to support those moving into the workforce for the first time during an economic downturn.
Those responses are all possible, but we have to ask questions about their cost. We have to consider the long-term consequences of all our decisions, including the possible unintended adverse consequences. Additionally, we have a duty to compare the long-term value that alternative strategies can provide. It is important to consider the evidence and analyse the potential negative impacts of any wage subsidy intervention, including substitution and replacement effects, which involve existing workers being replaced with subsidised workers either in the same firm or in other firms and either in the same area or in other areas. We must also consider whether the employment that might seem to have been generated by a subsidy would have happened regardless of the interventions. All those risks have to be weighed up when considering the value of any subsidy model.
Research into the effectiveness of previous wage subsidy schemes suggests that they are most successful when they are targeted and time limited.
I know that any scheme would have to be appropriate for Scotland. We have been told repeatedly by the Government to consider examples from other countries—usually small, independent European nations. The National Assembly for Wales announced its measures on 2 January. In the past five months, has the Government concluded any review of the matters that the minister is talking about?
The member must take on board the fact that, as I said a moment ago, there are differences between what is happening in Wales and what is happening here. We need to examine the evidence. There must be a sound rationale to underpin any programme of support. The costs must be weighed against the benefits of alternatives and the financial implications of even tightly focused and time-limited wage subsidy interventions must be taken into account, as they are likely to be considerable.
That is especially true given the significant fiscal constraints that Scotland faces. Scotland does not gain any benefit from an additional or maintained flow of pay-as-you-earn income, schedule D corporation tax or national insurance, so we must analyse all the options to ensure that we support employers in the current situation. We must adapt the options to the specific challenges that we face here, and we must discuss them openly and inclusively.
It is tempting to try to circumvent some of those processes, but that will lead only to short-term reactive decision making, which will in turn lead to unintended consequences such as those that I have discussed. Ultimately, it will slow our progress towards a rational solution. We must evolve approaches that will genuinely and sustainably support our businesses and employees over the longer term.
We know from previous recessions that even after growth resumes, the impact of a recession can run for a number of years, and unemployment is a lagging indicator. We are conscious that precipitate action could fail to deliver the cost benefits that we desire, which is why we are—quite rightly—analysing the options and planning a Scottish response. We are prepared to discuss that response widely, objectively and rationally.
Members are familiar with the decisive and rapid action that we have taken to date as part of the economic recovery programme to help Scottish families and households. Since last summer, we have consistently taken action to support jobs in our communities. We have doubled the resources of PACE, and there have been notable successes with Barclaycard and Goldfish, Vestas, the Rosyth to Zeebrugge ferry and others with whom we are working to try to get a phoenix to rise from the ashes.
As John Park saw in the manufacturing session that we ran, the Scottish manufacturing advisory service is directly beneficial and has a huge fan following. It is doubling its number of consultants, and I expect it to cross-pollinate other sectors of the economy. It advocates the things that work, such as focusing on the customer and on quality. We are committed to continuing that process, and to strengthening the skills and the key capabilities in the Scottish economy.
We are taking forward the economic strategy to increase sustainable economic growth in Scotland. We were right to make that our central purpose back in May 2007, and it is still right now. Despite the downturn, key elements in the Scottish economy are still discovering and exploiting opportunities for growth.
There is still much activity in the oil and gas sector, even with the depressed prices. That is important—people in that sector are telling us that they made mistakes in the 1980s in releasing people whom they later needed when the accelerator was ready to be pushed again, and that they are not making the same mistake this time around. There is an equally huge amount of activity in the renewables sector, as was highlighted in yesterday's announcement. Much was happening at the all-energy conference in Aberdeen; and we are continuing the support for apprenticeships to which John Park referred earlier, and on which my colleague will expand in a moment.
The key point of our amendment is that we want to go forward openly with colleagues in the Parliament to reach the right conclusions. Those conclusions, will, I hope, pass the test of time and meet Scotland's requirements in the long term.
I move amendment S3M-4187.2, to leave out from "with" to first "Scotland" and insert:
"to establish whether or not a scheme would benefit Scotland's economic recovery".
Liberal Democrats welcome the opportunity to take stock and look at the future, and we are pleased that John Park has brought the debate to the chamber.
The Scottish Government has said on a number of occasions in the past few months that the environment with regard to unemployment is stronger in Scotland and that Scotland is faring better than other parts of the UK. From some readings of the statistics, I can appreciate why the Government says that, but if we take a closer look at what is happening in our communities and examine the situation sector by sector, we see a picture of regrettable diffidence from the Government.
That is not a personal comment against the Minister for Enterprise, Energy and Tourism, whom I hold in high regard, but we need action rather than assertion. We welcomed some measures that the Government has announced, such as the accelerated capital expenditure, which we are told weekly is supporting 5,000 jobs. However, if we examine the information that Parliament has at its disposal, it seems that only half of the £323 million that it is asserted is being accelerated has been identified. We do not even know whether the Government is on course to deliver all the accelerated capital within the current financial year.
We supported the accelerated capital, but we did not know that it would be at the heart of party politics over the presentation of budget information by the Scottish National Party Government and the Treasury in London. All the accelerated capital is baselined into the current financial year, which skews the debate in relation to the coming years. That is not the correct context in which to consider a proper way forward.
In the Borders, which I represent, 1,041 people have lost their jobs in the past year, according to official Scottish Government statistics. If we use that as a per capita indicator, it is broadly equivalent to the loss of 20,000 jobs in urban Glasgow. That is the scale of the crisis that is affecting the economy now. It is not a case of waiting to assess something in due course during the year—action is required.
I appeal to the minister to look at examples of schemes in other parts of the UK, one of which has now been in place for five months. If there are genuine reasons why that method is not applicable to Scotland, there has been sufficient time for the Government to have examined, assessed and reviewed it; to have reached the conclusion that it is not appropriate; and to have brought that conclusion to the Parliament.
The textiles sector in particular and the manufacturing sector overall have seen what the Welsh Assembly Government has done. The ProAct scheme is not a minor scheme—it is part-funded by the European social fund, which is at the Scottish Government's disposal too, and it is targeted to support 12,000 people. It is a targeted, innovative measure, and it is supporting a number of jobs that is way above what the Scottish Government claims to be supporting by accelerating capital, of which only half appears to have been identified. My constituents are therefore having to make the awful choice to take redundancy rather than moving to short-time pay levels that they cannot live on. They are looking at their counterparts in Wales, where there is some form of alternative. I appeal to the Government to consider that scheme.
We are debating this issue in the context of the Government's decision before the recession to directly cut the budget of Scottish Enterprise—not the head count or the operational budget but the direct business support budgets. The college and university budgets are flatlining—according to the Government's own figures, from 2009-10, there is a real-terms cut in that budget of 0.5 per cent, even using the revised gross domestic product deflators.
Will the member give way on that point?
I am anxious about my time, but I will give way to the cabinet secretary.
Is the member aware that the higher education spend has increased in real terms by 2.9 per cent over the current spending review period? Is he aware that, for Skills Development Scotland, the training budgets are up and the administration and back-room costs are down?
I will address each of those points directly. The figures that the Government published in November 2007—which appeared in the now infamous table—indicated that the Government was able to use the real-terms growth figures only because it evenly spread out one year's capital expenditure over a three-year period. A note to that table, which was published by the Government, states:
"The effects of additional capital funding allocated in 2007/8 have been spread evenly across the SR07 period for illustrative purposes."
We do not need information from the Government "for illustrative purposes"—we need places in colleges and support for students.
With regard to Skills Development Scotland, I suspect that the cabinet secretary did not see—and I therefore refer her to—the evidence that the Finance Committee received two weeks ago from Skills Development Scotland, which showed a direct cut in the programmes that were available to it.
It is in that context that we must consider the direct cuts in the budgets of Scottish Enterprise and the colleges. We have received evidence that, in my area, there has been a 72 per cent increase in applications to Jewel and Esk Valley College in Midlothian and a 20 per cent increase in applications to Borders College. Colleges will be turning away many more students, as they simply do not have the capacity. They are operating from a lower base because the Government flatlined the budget.
Investing our way out of this recession will be crucial for future jobs and skills, but the Government's baseline is making that job harder. The Parliament has to tackle that job and it has to do so urgently.
I move amendment S3M-4187.1, to insert at end:
"; regrets the flat-lining of budgets for colleges and universities in the spending review period announced in 2007 and the dramatic real-terms cuts in operational funding for Scottish Enterprise and the new agency, Skills Development Scotland; expresses concern at the impact that this will have on the sector's ability to accommodate increased training demand in the workforce, and fears that this could lead to a slower recovery for Scotland from the recession."
In his opening speech, John Park struck the right tone when he talked about the human cost of unemployment, which not only affects those who have lost their jobs but hangs over the heads of those who fear that they might. That is a significant concern, and I was interested to read in its unanimous cross-party report on the budget the House of Commons Treasury Committee's consideration of the prospects of UK unemployment. The report says:
"There is a strong possibility that unemployment will rise above three million, with some economists warning that it is possible that unemployment could rise as high as four million. Approximately 40% of the unemployed are likely to be young people aged under 25."
With regard to the measures that the UK Government has taken, it says:
"it is too soon to judge whether the Government proposal"
is
"a sufficiently timely and substantial response to the scale of the unemployment challenge."
Of course, unemployment might not reach 4 million—or indeed 3 million—and, even if it were to do so, the level might not necessarily rise faster in Scotland than in the rest of the UK. However, the report highlights the potential scale of the challenge that we face with job losses.
As the Minister for Enterprise, Energy and Tourism has pointed out, even when growth resumes—which it will at some point—there will still be a significant delay in job creation. As a result, even as our concerns centre on what can be done in the short term, we must take a long-term approach to dealing with unemployment.
The Fraser of Allander institute has suggested that 80 per cent of the jobs that are lost in Scotland this year and next will be in the service sector. That profile of job losses is different from that in previous recessions, and that will have different implications for our response to the situation. Although I am interested in the proposals from the Labour Party that are based on the Welsh experience of ProAct, I must be entirely candid and say that I am profoundly sceptical as to whether it is a cost-effective method of supporting employment. That said, in comparison with regional selective assistance grants and set against the First Minister's comment that 9,000 jobs will be lost as a result of the £500 million squeeze—in other words, £55,000 a job—the ProAct initiative seems relatively cheap.
However, there is a question about the effectiveness of job subsidies and a real concern about how we design out moral hazard and ensure that we do not simply spend public money on something that would happen anyway. I am also concerned about how firms would behave after a job subsidy was withdrawn—and, of course, how such a subsidy would be paid for. Perhaps that is what Mr Purvis is about to tell us.
As the member knows, £30 million of the Welsh scheme comes from the convergence European social fund, which is also at our disposal in Scotland. As I recall, David Cameron has proposed an alternative job subsidy scheme for the unemployed, so it does not appear that the Conservatives have a principled opposition to the scheme. Does the member agree that, if the proposal receives cross-party support, we have a good chance of delivering it in Scotland?
With regard to unemployed people, the Conservatives are proposing at UK level to shift some of the spending that would otherwise go on unemployment benefit into short-term reductions in national insurance, which would have a beneficial effect on public finances. I should point out that, if my calculations are correct, the forecast increase in national insurance from 2011 will cost the Scottish economy something like £130 million. Avoiding that would give Scotland a very significant boost.
The Government's suggestion that we should evaluate the Welsh experience is perfectly sensible. If the scheme proves to be cost effective, we should consider it—assuming, of course, that we can find the money for it. However, if it proves not to be cost effective, I believe that we should not throw public money at it ineffectively. We need to consider all the available options.
As a result, although the Labour Party's proposal is interesting and worthy of substantial consideration, I feel that the Government amendment strikes the right tone. We will not support the Liberal Democrat amendment, which seems to be nothing more than another in its long list of spending demands.
More than 40 years ago, I walked through the gates of the Cartsdyke shipyard and met the head foreman, Mr Alan Swindells. He was a wee character, but he had enormous power. Little did we know what changes lay ahead. A job for life? I think not.
As the representative of a community that for many years now has been subject to significant and on-going change, from ships on the Clyde to banks on the Clyde and from building ships to microchips, I understand the need for change. I know only too well that nothing stands still and know how important it is to educate individuals and equip them with skills and to support businesses through such change.
As a worker, as a trade union official and as a member of this Parliament, I also know how important politicians and politics can be in that process. In my various roles over the past 30 years, I have dealt with secretaries of state and ministers of all parties, including Mrs Thatcher in her den in Downing Street. As a result, I am not starry-eyed about the influence that politicians can have, either positive or negative. [Interruption.]
I think that that was a negative influence.
We will add on injury time for that, Mr McNeil.
Thank you, Presiding Officer. The person who constructed my lectern obviously did not serve his time in the Cartsdyke shipyard.
I have seen shipbuilding move to the far east and the electronics industry move to eastern Europe, and I know that we cannot compete with sweated labour from abroad. However, I understand that change needs to be managed and that we need to retool and reskill people through education and training to build the workforce of the future. In order to do that, we need to be prepared to get involved and to act early. In our small country, we should be aware of the changes that are happening and manage them not for the here and now but for the next five, 10 or 20 years.
In that respect—and to bring a note of disappointment into the debate—I wonder how we can be confident that this Government and its ministers are prepared to act. For example, in February, Telecom Service Centres Ltd, one of Scotland's biggest contact centres, announced hundreds of redundancies in Greenock as a result of T-Mobile offshoring work to the Philippines. When I wrote to the Minister for Enterprise, Energy and Tourism to warn him of the threat not just to those jobs but to the whole industry, I did so not as an act of political posturing—after all, I knew that the agencies were already in place to support some of the workers—but because I recognised the early signs of an industry that was facing real challenges. The answer that I received was, at best, complacent in its attempt to assure me that everything in the garden was rosy, and it was not until a couple of months later when the same company announced the loss of hundreds of jobs in Falkirk that Mr Mather's officials made the call.
In his letter to me, the minister defended his position by name-checking his work with the Customer Contact Association. However, even a cursory glance at the association's website reveals various references to challenges such as the squeeze on costs and offshoring trends. Fully three months later almost to the day, after more redundancies and the closure of the Greenock contact centre, the First Minister will today respond by meeting T-Mobile. Let us all hope that he can seal the deal and secure guarantees that will minimise the job losses among the TSC workers.
Will the member be gracious enough to acknowledge the fact that we have engaged fully with TSC and are working with the company to ensure that there is a backfilling of jobs in Scotland?
The minister, the workers at TSC and I know that there was no call to TSC until the eve of the additional job losses in Falkirk, despite representations from TSC and from me. For many of those workers, it is too late—they will lose their jobs. However, my concern is that the situation is not simply a local difficulty, but the beginning of a trend that will impact significantly in my constituency, where contact centres at T-Mobile, the Royal Bank of Scotland and IBM contribute to the economy and provide thousands of jobs. Those are high-skilled jobs that need multilingual, information technology and financial advice skills.
The issue is no small matter for the Scottish economy, in which more than 60,000 people are employed in 300 contact centres that offer 26 different languages. If Inverclyde and Scotland are to continue to benefit from those jobs, the Government needs to engage proactively at times of crisis, but also, more important, before crises are confirmed. The Government needs to bring the industry together, understand the challenges that it faces, and work with it to ensure that Scotland and Inverclyde remain good places to do business.
I welcome the opportunity to participate in this important debate. As everyone knows, we are in the midst of a recession that is having a devastating effect on many families in Scotland, the UK, Europe and the wider world. Only this week, we heard that the Japanese economy shrunk by 4 per cent in the first quarter of 2009. That highlights the global situation that we are facing. We are discussing the situation in Scotland, but it is important to highlight the Japanese example.
The Scottish economy is in a downturn, but we are faring well compared with the rest of the UK. During the first quarter of this year, unemployment in Scotland was 5.9 per cent, compared with 7.1 per cent in the UK—I would be the first to admit that that those figures are 5.9 per cent and 7.1 per cent higher than they should be. Labour has told us that 20,000 jobs have been lost in the construction sector alone this year. According to the Office for National Statistics, construction activity fell by 3.8 per cent in Scotland, 11.6 per cent in Wales and 6.4 per cent in England. The latest figures from the ONS—they are from 7 May—show that there was a 0.4 per cent increase in construction orders in Scotland from the last quarter of 2008 to the first quarter of 2009, compared with a 9.3 per cent decrease in England over the same two quarters.
Does the member acknowledge that a lot of people in the construction sector are self-employed rather than directly employed? Quite a lot of the redundancies are therefore beneath the radar and are not reflected in the ONS figures.
I accept that point, which leads into what I am about to say.
I have family members who live in England and work in the construction industry there. When I have spoken to them in recent months, they have told me about the devastating downturn that is affecting them. Some of my relatives stay in the midlands. In the past, they have had no problems whatsoever in obtaining work. Now, the situation that they face is similar to, but worse than, that in Scotland.
I do not wish to see anyone lose their job through no fault of their own. However, in light of the statistics that I have just mentioned, it is clear that Scotland is suffering a wee bit but that it is certainly doing better than the rest of the UK, as I have said. I wonder what devastation would have befallen the Scottish economy if the Scottish Government had not brought forward capital funding in the budget.
Recently, the Scottish director of ConstructionSkills, Graeme Ogilvy, stated:
"there is still short-term growth in the industry, assisted by public sector spending".
Councillor Steven Purcell stated recently:
"there's so much work going on in Glasgow just now".
Some of those projects will be at least part funded by the Scottish Government.
Numerous announcements have been made about new building projects throughout the country. One of those projects is in the Inverclyde community that I live in. New schools have been commissioned by the Inverclyde Council Labour-Conservative-independent coalition and signed off by the Scottish Government. There is some £80 million for four new schools. Announcements have been made throughout Scotland to try to maintain jobs in these trying times.
Members keep hearing about the 20,000 job losses in the construction industry, and Labour continually attempts to blame the Scottish Government. I must have missed the furore when Chancellor Darling announced £500 million-worth of cuts for Scotland next year. That is expected to cost 9,000 jobs in Scotland.
I congratulate John Park on lodging a constructive motion, and welcome his acknowledgment of the ProAct scheme. I think that that scheme will bring benefits to Wales, and I hope that the Scottish Government will consider it. I am sure that John Park acknowledges that the scheme was introduced in Wales when Plaid Cymru became a partner in the Welsh Assembly Government.
I welcome the opportunity to take part in the debate, which is taking place at an important time for Scotland. Unemployment has risen to 157,000, and 34,000 Scots have lost their jobs in the past year. Earlier in the week, 300 proposed job losses in Lloyds TSB were announced. In South Lanarkshire, 13 people are chasing every vacancy.
In such times, the role of Governments is to use the levers at their disposal to protect their economies and to ensure that measures are in place to try to inject cash into them to create jobs. In that regard, I welcome initiatives that have been taken at the UK and Scottish levels, including the bringing forward of the capital acceleration programme, which has brought much-needed investment into the Scottish economy, measures in the budget earlier in the year to create 7,800 apprenticeships, and support for the PACE scheme to help people whose jobs are under threat find employment in other areas. Those are important aspects.
I know a lot about the threat of unemployment in my area. In January 2009, the Vion plant in Cambuslang announced 142 proposed job losses. Fortunately, as a result of the good work of the trade union and the company, 56 of those jobs have been saved in the short term, until the end of the year. That is a positive development, which is to be welcomed. However, building on that is important. Shortly, I will host a meeting in the Parliament that will involve Unite, Vion, the Scottish Government and agency representation, to consider how we can protect the Cambuslang plant and build a sustainable future for it.
In that context, the ProAct initiative, which has been welcomed, is worth considering. The minister and Derek Brownlee questioned the scheme's viability and asked whether such a scheme would contribute towards economic growth in Scotland. Such a scheme would introduce short-time working in Cambuslang, keep people in employment there and contribute to protecting the local economy, which would contribute to the wider Scottish economy.
The SNP must do more for the economy. Last October, it announced a six-point plan, which in essence tinkered at the edges. We need a plan that gives more details about some of the announcements that were made in the budget and which reflects the new economic circumstances. It is essential that we know how the 7,800 apprenticeships will be rolled out across Scotland. Last week, I was contacted by a constituent whose 16-year-old son is keen to get a job as an apprentice joiner. He had contacted Careers Scotland, but was unable to get any concrete information about how and when the apprenticeships would become available. Will the minister address that point when he sums up?
The SNP ministerial team must be a lot more visible when communities are under threat of job losses. The minister, correctly, went to Dundee pretty sharply when NCR was under threat but, in Cambuslang, it took me a month to arrange a commitment for a meeting with local trade union officials, and that was only on the day when I sponsored a members' business debate on the issue in Parliament.
It is important that we get action, because actions speak louder than words. It is time for the minister and his team to act now.
I am sure that all members welcome the opportunity to discuss employment in Scotland at a time of great uncertainty for all our people. All too many Scots live long term with uncertainty of income, or at least with the certainty that it will be low. Sadly, the present recession brings them closer to their neighbours, although only by degrees and then for all the wrong reasons. The benefits system is a mess. At present, the Parliament cannot address that directly, but the issue must be considered. Many more families, through no fault of their own, are finding themselves in the worrying situation of unemployment, debt and living on benefits that do not meet their outgoings.
That is why I am glad that John Park's motion is, in essence, positive in its presentation and that it gives the Scottish Government the opportunity to look for a like-minded approach from Opposition members. The Government, by bringing forward capital investment in the housing sector, will help with the training of the 1,000 modern apprentices in Glasgow over the next three years, which is backed by £6 million of Government money. As my colleague on the back benches Stuart McMillan mentioned, that has been welcomed by Graeme Ogilvy, director of ConstructionSkills in Scotland, who has stated:
"there is still short-term growth in the industry, assisted by public sector spending".
As Stuart McMillan also mentioned—note to self: never go last in a debate—Steven Purcell has gone on record to praise the booming parts of the economy in Glasgow because of regeneration projects that are funded, at least in part, by the Scottish Government. That is surely the kind of cross-party consensus about which we are all happy, especially as Steven Purcell was not at that point referring to the jobs that are to come from the construction of the new Glasgow hospital and the Glasgow airport rail link.
Everything is not hunky-dory, however. A growing number of our citizens are suffering unemployment or are worried for themselves and their children in the job market in the short and long term. I have been there more than once, so I know the humiliation, and the fear that the longer someone is without a job, the less likely an employer is to take them on. We must therefore keep our eye on the ball in the Parliament and consider ideas from elsewhere, such as the ProAct initiative in Wales. However, we must ensure that such an initiative would work here, or we risk wasting the limited resources that are at our command. We will also have to work alongside Westminster, as long as it will let us, and only while it still holds the purse strings.
We should remember the need for Scottish solutions to Scottish problems. One size does not fit all, so with any joint economic programmes to boost employment, or in launching any initiative, we must ensure that it fits with the requirements in the Scottish jobs market and with the funding that is available to us under the present economic constraints. Investment in renewables is an ideal medium for a longer-term solution for Scotland. It will help us to ride out future recessions, while helping to save our planet's environment and all our futures. After only six years in business, the renewables company SgurrEnergy in Glasgow is growing internationally—it recently opened an office in Beijing. Welcon in Machrihanish, which Jim Mather knows well, is creating long-term construction jobs in the hundreds. Those are examples of Scottish solutions to Scottish economic and employment problems.
I hope and believe that all members will work with the serious attitude that is required to see Scotland's people through the recession.
Derek Brownlee echoed John Park's comments about the human costs of redundancy. It is right that the effect on ordinary people should be the main focus of attention in the debate. The comments of Duncan McNeil and James Kelly concerned me. If workers are made redundant anywhere in Scotland, they deserve the full attention of politicians, and specifically ministers, irrespective of where the companies are and who the workers' local representatives are. I hope that ministers are not being partial in their response to redundancies, as some of the evidence that I have seen suggests. It would be fundamentally wrong if workers who are made redundant had to pay a price for political infighting in the Parliament. I understand that, inevitably, ministers will support members from their party on local initiatives—that is the nature of politics and I do not criticise them for it. However, no worker in the country should have a delayed response from ministers simply because they live in one area rather than another. I hope that ministers will reflect on those comments. Let us not have a stushie; let us just reflect on the issue and possibly change attitudes and future behaviour.
Does the member acknowledge that, as part and parcel of fulfilling our responsibilities, since way back last May, we have been going round the country, running 96 sessions and talking to 5,000 people at community and industry levels? We are trying proactively to make Scotland's economy better and more effective. Will the member reflect on that?
I will reflect on that but, equally, Jim Mather needs to reflect on the criticisms from Greenock, Cambuslang, East Kilbride and other areas where there have been delays in responses from ministers. That is unacceptable and the minister must address it.
We must plan and prepare for our future and we need to invest in our young people. I am concerned that, in Renfrewshire in the past year, 30 apprentices have been made redundant, of whom 21 are still looking for alternatives. The main source of apprenticeships in the construction industry has dried up. Large companies are now often contract managers and brokers, so they subcontract rather than employ. Therefore, we need to support small companies that can provide apprenticeships for young people. I am thinking of companies such as MPS Training in Johnstone in my constituency, which is run by Willie Cosh. Such companies often offer young people varied and stimulating training and learning experiences that are better all round. If we invest in those companies now, we will be paid a handsome dividend in the future.
Several members have mentioned ConstructionSkills in Scotland. I do not want to be particularly critical of it, but we need to have an open mind, be objective and ask hard questions about its performance. Is it helping small companies? Do they feel that it is of value? Let us be open minded and objective in coming up with answers on what we can do and, more significantly, what we can do better.
I compliment colleges throughout Scotland for their role in tackling the problem. For example, Reid Kerr College in Paisley has an outstanding record of helping young people into training and employment. I give particular credit to the college's built environment department. Colleges can make a difference, so we must invest in them.
Packages of employment and training need to be made available and we need partnerships that can work together closely. We need partnerships between the private and public sectors and between schools and colleges. ConstructionSkills in Scotland should be the facilitator for such an approach, but at this juncture, I worry whether it can do that job. I worry that rather than preparing young people for the construction industry as it exists today, it is continuing to prepare young people for the construction industry in a world that no longer exists and in social circumstances that have moved on. That should be a wake-up call and a challenge to us all.
The context for the debate this morning is the Government's skills strategy, which received scant support from this Parliament, and the Government's economic recovery programme. Concerns have been raised about its innovation and the depth of the work that it does.
By and large, the recovery plan policy is a toolbox with only one tool in it: accelerated capital. It is impossible for the Parliament to find out how much of that accelerated capital is in work that is being done at the moment, because the Government has not provided a breakdown. Bill Kidd commented on the work that is being done in Glasgow and quoted the council leader. It would be helpful if the Government were to publish such a breakdown of contracted works that are being delivered now and a timeframe for them. The danger is that we will enter the next financial year and find that part of the money that was due to be accelerated was not accelerated after all.
Stuart McMillan said that we are "suffering a wee bit". I hope that that is not a statement of the Scottish Government's policy. Even the comparative unemployment figures from the rest of the UK mask the information about sectoral and construction unemployment, although there has been some discussion about that. Stuart McMillan quoted Labour figures of 20,000 job losses. I agree with him that we should not necessarily trust Labour figures, but it was Michael Levack and not the Labour Party who told the Finance Committee two weeks ago that 20,000 jobs had been lost to the construction sector before the recession. It is the hiatus created by the Scottish Futures Trust and the Government's decisions not to introduce programmes and to cause delays in other programmes that have caused considerable difficulty. Critically, we are now seeing colleges having to adjust some of their work over the coming year because of what the Government has done to the Scottish economy.
Not all employment issues are within the remit of a devolved Government, and we agree with the Government on a number of issues that arise in the UK Parliament. The focus of debates such as this is the powers at the Scottish Government's disposal and what difference they can make to unemployment in Scotland.
We were pleased to work with the Government on finance sector jobs. When we argued in the autumn that the structures that the Government has in place were insufficient and called for a finance sector jobs task force, we were pleased that it accepted that argument, albeit after a little too long. We need to take that body to the next level because it is becoming apparent in the finance sector that there will be a drip-drip effect over coming months.
Although I am mindful of the good news that the minister rightly highlighted about the finance sector in Scotland, we still see a different type of employment in our local areas. It is interesting that the two areas of greatest unemployment growth over the past year are the Borders and East Lothian. There has been a 116 per cent increase in unemployment in the Scottish Borders and a 134 per cent increase in East Lothian. Those are both travel-to-work areas for the city, and both have experienced growth in capital and housing investment. They are both being harmed.
From the finance sector, I move on to skills and whether the skills strategy is configured appropriately. We are concerned that the strategy is the basis for our colleges and universities, as their budgets have flatlined. At the Finance Committee on Tuesday, it was encouraging to hear John Swinney say that he will look again at college funding in the coming year. A cynic might call that an admission of failure, but I will be far more constructive and say that it might be the beginning of a recognition that in the coming year we have to look differently at the in-year budget.
Will the member give way?
I am afraid that I am in my last minute; I would have given way otherwise.
We need to look aggressively at all public spend in the coming financial year to free up resource, to stimulate the economy and to look at supporting private sector employment. At the same time, public sector employment is growing. Government figures published in March indicate that, although there are fewer public sector bodies in Scotland, more people are working in the public sector. The growth profile of public sector employment corresponds exactly to the decline profile of private sector employment. For the long-term sustainability of our businesses, we need to look at both what the Welsh Assembly is doing and what our Government is doing within this year's budget.
John Park and the Labour Party have come to the chamber this morning with an important debate and with what I would describe as a plausible and positive suggestion. The Scottish Conservatives are happy to examine any plausible and constructive suggestion. Although, as Mr Brownlee said, we have initial concerns with Labour's proposal, the fact that such a plausible suggestion has been made is a good step forward.
We heard from various speakers about the deeply worrying situation in Scotland and the UK as a whole. The motion talks about 34,000 job losses in Scotland in the past year, but unemployment is measured in different ways. The claimant count—another perfectly legitimate way of looking at unemployment—has increased by 54,000 in the past 12 months, which is even worse than the figure in the motion.
Derek Brownlee spoke about the UK position. A couple of months back, somebody suggested that 3 million people might become unemployed in the UK. That estimate was on the fringes of mainstream opinion, but it has moved into the mainstream over the past few months, and most commentators think that we will be staring in the face a figure of 3 million unemployed people over the next 12 months or so. A statistic of huge concern that I confess I had not heard before is that about 40 per cent of those 3 million people could be under the age of 25. That creates enormous problems for this country into the future.
The central plank of Mr Park's proposal is the ProAct scheme initiated by the Welsh Assembly. It came out of a meeting with various business groups in November last year; it was implemented in January this year and has been running for five months. There are clear benefits from the scheme, which is having an effect in parts of Wales, but my biggest concern is the number of companies that gain from it. The most recent figures that I could get hold of suggested that 53 Welsh companies have been helped so far and a further 106 are currently being assessed. Applications number around 30 a month. As I understand it, only one company a day is applying to the ProAct scheme. Fifty-three companies have been helped, which contrasts with about 4,000 companies that need help, as I read in the official reports of the debates in the National Assembly for Wales. That is why it could be argued that the scheme is only scratching the surface of the problem in Wales.
BDO Stoy Hayward predicts that 5,000 companies in Scotland are in serious danger of failing this year, with the potential for another 5,500 companies failing next year. Potentially, greater numbers of companies will fail, but if we are looking at helping only 53 of them—or perhaps more in Scotland—we must question seriously how big a difference such a scheme can make. The minister made a fair point in asking that question. One could contrast that scheme with the small business bonus, for which we pushed and which I understand has helped something in the region of 146,000 companies throughout Scotland.
We will certainly examine the ProAct scheme, but there are concerns at the outset. There are concerns about the bureaucracy, which can probably be taken care of with the benefit of hindsight. There is also the obvious question of where the money might come from. It is a £48 million scheme in Wales. I have seen various estimates of the funding: some say that £30 million has come from European structural funds while others say that that figure is £38 million, with the rest made up by the Welsh Assembly Government.
From the tone of the minister's speech, it sounded to me as if the Government had made up its mind that the scheme was not a good idea, although I might have picked that up wrong. I am happy to be corrected on that, but that is the impression that I got. Any examination of the scheme has to be swift. If it is a good idea and it is going to work, the examination and the implementation have to be swift.
Will the member take an intervention?
I think that I have only 10 seconds left, but I will take an intervention.
Please be very quick, Mr Mather.
I draw to the member's attention the fact that I was calling for an objective and rational assessment. We intend to honour that.
I am happy to take that at face value. The examination has to be swift and a decision has to be taken quickly. In Wales, the scheme was up and running within two months. Two months is a perfectly reasonable time for us to make a decision—yes or no.
I thank John Park for bringing the debate to the Parliament. Since last summer, the Government's number 1 priority has been to focus its resources to support individuals and businesses suffering the consequences of the recession. That remains our priority.
Nearly 8,000 more people will start apprenticeships this year thanks to the additional £16 million that was announced in February, which was supported throughout the Parliament. Up to 75,000 Scots will benefit from support through 79 projects that receive European social fund support from the £25 million that we announced in April.
Last year, a record 35,000 people—up 37 per cent on the previous year—used individual learning accounts to support work-related training. The changes that we made to ILAs last month mean that more people than ever can now access those funds.
On Gavin Brown's points about young people, through the new policy for 16-plus learning choices, by December 2010 we will offer a place in learning post-16 to every young person in Scotland who wants it, which will help 60,000 young people each year. Within that, we will focus on improving the way that we support our most vulnerable young people, and we will invest £16 million over the next two years to develop activity agreements with them.
Our economic recovery effort is all about supporting people, communities and businesses. What matters most to us is how the numbers that I have just mentioned translate into real, practical help for individuals. Duncan McNeil and others reflected on that in their speeches.
I will give a couple of real-life examples. Alex from the south side of Glasgow was made redundant last December after working for 25 years at Woolworths. He used ILA funding to train for and pass his passenger service vehicle licence theory test, and he is now working as a bus driver with FirstGroup.
After being made redundant in his 50s, David from Alexandria got tailored advice, training and support from PACE, which led to him securing work in the social care sector.
Students at colleges such as John Wheatley College, Elmwood College and Perth College are benefiting from £20 million of extra infrastructure improvements from the acceleration of capital spending.
Does the cabinet secretary not accept that my criticism of the failure of the Minister for Enterprise, Energy and Tourism to act has been acknowledged by the Government, given that the responsibility for certain matters has been transferred to the Cabinet Secretary for Finance and Sustainable Growth and that the First Minister is meeting T-Mobile today? Does she not acknowledge, however grudgingly, that that is progress?
When I mentioned Duncan McNeil, I was referring to his reflections on how the recession impacts on individuals and the importance of dealing with individuals. His points are on issues around the response to individual companies.
We have to approach the recession by working together. Attacking individuals, whether ministers or other MSPs, will not be welcomed by our constituents and it will not get the results that we want.
We know that more than 1,000 butchers, bakers and ancillary staff in the food manufacturing industry will benefit from training as a result of two ESF projects and that 5,000 people will now have access to basic training through the Scottish Trades Union Congress-led ESF project, which builds on the £4 million investment that we are making in union learning.
I hope that Parliament agrees that the actions that we are taking will make a real difference, but we know that we have to do more. We will continue to use the resources within our powers to bolster that effort.
On the Liberal Democrats' amendment, we have heeded the calls of the Conservatives and Liberal Democrats to cut back spending on public jobs and quango costs. The Skills Development Scotland operating budget will reduce as a result of a voluntary severance scheme, although training budgets are not being cut and front-line services are being enhanced.
Chris Travis, in reflecting on the 2009-10 college allocations, said:
"The increase in funding for colleges is encouraging and takes into account the need to provide increased financial support for colleges and students, particularly in these challenging economic times."
I hear what the cabinet secretary says, but the information that the Government itself has published shows that the college recurrent funding was £539 million for 2009-10 but will be £535 million for 2010-11.
We can trade figures, but a 2.4 per cent real increase over the spending review shows our commitment.
I move on to examining the pros and cons of wage subsidies. We are examining a number of proposals and the experience of ProAct in Wales. It would be wrong to prejudge whether measures such as wage subsidies are suited to the specific experience of the Scottish economy now or in the future. We are also looking at the Northern Ireland redundancy apprenticeship model, although there are slight concerns about low uptake. We want to look at the successes and the problems that those and other schemes in Europe face.
There are big challenges. Jeremy Purvis identified the need to support college places. In our assessment of wage subsidies for individuals and sectors or to deal with mass redundancies, as in Wales, we have to identify whether resources are best placed there or in colleges. Those are exactly the points that we have to consider.
We have also adapted the eligibility of training programmes to support better those in need. That means that training for work—a vocational training programme to enable people to develop job-specific skills—is now available to unemployed people after three months, compared with the previous threshold of six months. It is also available immediately to people on notice of redundancy. That means that people in work can receive training while they are working their redundancy notice, in order that they can move from work to work. That is one of the best solutions that we can provide.
I have already announced 1,000 apprenticeships for the Glasgow Commonwealth ambitions, 50 for the creative industries and 100 for home energy and efficiency. John Park mentioned the apprenticeships summit, at which 150 employers joined us. Only yesterday, key industry sector organisations met the Minister for Schools and Skills to develop that thinking further. When the report from the summit is published, which will happen shortly, I will outline further details on how we are building a strong skills base to enable Scotland to survive the recession and to thrive when the recovery comes.
The Government will also produce an updated economic recovery programme within the next few weeks.
I thank John Park for lodging the motion. If Parliament agrees to the Government amendment, we can proceed in a united way in acknowledging John Park's proposals.
I welcome the contributions from members. The debate has enabled us to discuss issues of importance and relevance to the people whom we represent, and it has allowed members to raise a number of local employment concerns. I do not doubt that MSPs of all parties take the issues seriously and are working hard to ensure that their constituents are supported individually and collectively through these difficult times. If the motion is passed at 5 o'clock, as I hope it will be, that will be another important step towards ensuring that the Government is accountable for the decisions that it takes and that it delivers on the commitments that we make in Parliament.
I agree with many of the points in the amendment in the name of Jeremy Purvis on behalf of the Liberal Democrats. Much of what the Scottish Government intends to spend on skills is being channelled through ESF funding—the additional spending that we are considering today. That is the right thing to do, and we have to be supportive in reprofiling the money to ensure that there are proactive measures to support people who are in work but under the threat of redundancy.
I am concerned that that assistance should not be at the expense of supporting projects for the people who are furthest away from the labour market. We definitely need to support both groups, in particular because the people who are furthest away from the labour market are in the communities that have never fully recovered from recessions in the past.
I do not want to get bogged down in semantics, but I think that the wording in the SNP's amendment is similar to that in our motion. We will take our chances at 5 o'clock.
It is without doubt self-evident that whatever proposal we in the Parliament come up with must be rigorously assessed on what it would do and deliver. It goes without saying that policy making must be evidence based—I am comfortable with that.
In our examination of wage subsidy schemes, including the Welsh example, we are discussing the idea with business partners and the STUC. It is important that we reflect on what they say.
I am relaxed about the fact that such a proposal needs to be brought back to Parliament. That is absolutely the right approach.
We have spoken about the small business bonus scheme, whose universal approach I have expressed concern about. I acknowledge that the scheme reduces fixed costs for individuals, but we must measure whether that results in reinvestment in the workforce. Evidence from the Federation of Small Businesses shows that the scheme has led to only a 5 per cent increase—
I knew that Mr Brownlee would stand up when I said that, but I will finish my point. Only 5 per cent of companies say that the scheme has led them to reinvest in their workforce to support employment.
I, too, will refer to FSB evidence on the business rate cuts. Emerging evidence from the FSB suggests that about one eighth of eligible businesses that receive the business rate reductions would have difficulty remaining in business were it not for the reductions. Is that not a significant impact not just on employment but on self-employment?
That is a good point, but were those businesses viable before? The same argument is made about whether Scotland should have a wage subsidy scheme like ProAct. We must apply to the figures from the FSB on one form of Government spend the same logic as we would apply to a wage subsidy.
Some members, particularly from the Labour Party, have expressed concern about the consistency of the Government's approach. I know that Mr Mather has gone around the country to speak proactively to industries and companies, but when MSPs are approached by constituents who are concerned about their employment it is vital that the Government responds consistently.
Will the member take an intervention?
I must make progress and get on with my speech—the issues have been covered and there is no point in going over them again.
The FSB at the UK level, the UK Trades Union Congress and CBI Wales support ProAct. As part of the Scottish Government's analysis—whether or not it is part of a wider economic recovery programme—it should engage with key stakeholders and ask the CBI, the STUC and FSB Scotland what support would be needed if such a scheme were introduced in Scotland. ProAct has the support that I described—although I take the points that Gavin Brown made—and when we in the Scottish Parliament have to make evidence-based policy decisions, anything that we do to consider such a scheme more seriously will be very welcome to Labour members.
James Kelly spoke about Vion Food Group, and I will say a little about the Vion campaign. I spoke in the members' business debate earlier this year on the job losses at Vion, and the situation highlights the important role that trade unions play. The trade unions sat down with Vion, campaigned locally and made a difference. They considered ways of mitigating the job losses and delivered for their members. At the same time, they ensured that the company knew that it had to do things in the right way. The people who do such work throughout the country—whether they are union members or ordinary workers—are the unsung heroes in the workplace. They try to maintain employment and keep people in work. We in the Parliament should recognise their valuable work.
I have highlighted the figures on redundant apprentices. Yesterday, I was approached by Daniel McGuiness, a third-year plumber, who advertised in the Daily Record and the Sunday Mail—and whose mother has even written to the Cabinet Secretary for Education and Lifelong Learning—to say that he has nearly finished his apprenticeship and that he needs someone to take him on. We must deliver for such people. The real and perceived barriers to helping apprentices complete their training were considered at the apprenticeship summit, which also covered the 7,800 places that we need to achieve.
I hope that the Scottish Government will bring the issues back to the Parliament before the summer recess and that we will deliver on employment and apprentices.