Topical Question Time
Scottish Coal
1. To ask the Scottish Government what support will be given to families and communities affected by the liquidation of Scottish Coal.(S4T-00324)
News of the liquidation of Scottish Resources Group will be a hammer blow to many rural areas in Scotland. The Scottish Government will give every support possible to families and communities that are affected by the events at SRG and to the sustainable operation of the coal industry in Scotland.
Building on the work that has been carried out with the coal industry over the past months, a task force is being assembled, which I will chair and which will pull together all relevant parties who are concerned with maintaining a sustainable Scottish coal industry. I wish that task force to include MSPs from all the main Opposition parties and have already had informal conversations with the three party leaders to that effect.
I have spoken with KPMG and I welcome its initial view that it is still possible that mining operations will continue. I am continuing the dialogue with KPMG, my officials have spoken with affected councils and I will meet East Ayrshire Council after this session and the trade unions on 24 April, which is tomorrow, to ascertain what further assistance may be provided. Our main goal in our discussions with all the relevant parties is to retain as many Scottish coal jobs as possible.
On 8 March, at the beginning of the consultation process, we offered support through our partnership action for continuing employment—PACE—initiative to the Scottish Resources Group for employees who might be facing redundancy. The SRG declined that offer, as it felt that it was too early in the consultation process for PACE support to be accepted. On 19 April, which was last Friday—the date of the liquidation—we again offered support through the administrators, KPMG, for employees who had been made redundant then, and we are continuing to work very closely with KPMG to provide support for those affected employees. My officials spoke with it this morning, and I can confirm that plans are under way for four events to assist employees who have been made redundant. Skills Development Scotland is co-ordinating those events, which will take place in Ayrshire, Lanarkshire, Alloa and Fife. PACE partnership organisations will be present to offer help to affected employees, who will each receive an invitation to the events, two of which are scheduled provisionally for next week. We aim to hold the other events as soon as possible, of course. We will also provide support on site for employees who have been retained.
We share the concerns of local communities around the responsible restoration of opencast coal sites, and we are setting up the Scottish Mines Restoration Trust—the SMRT—to facilitate the restoration of old opencast coal mines across Scotland. Our main concern is to ensure the responsible restoration of opencast sites, but it is expected that, over time, the restoration process will potentially create hundreds of jobs across the country. The new SMRT will engage with local councils, landowners and coal operators, and will pull all relevant parties together to ensure the best possible outcome for local communities and the effective restoration of old opencast mines.
Finally, we have provided £2.5 million in funding from 2011 to 2014 to assist the Coalfield Regeneration Trust to deliver its services within former coalfield communities. We are continuing to support the CRT to become a self-sustaining organisation so that it can continue to meet the needs of former coalfield communities.
I thank the minister for that detailed response.
A task force is exactly the measure that is needed and I certainly look forward to contributing to its work on behalf of constituents who are affected by the news. I am sure that fellow members—I see Aileen Campbell and other members in the chamber—who represent affected constituencies and regions will support the Scottish Government’s efforts to preserve jobs and businesses in the important Scottish coal sector.
Can the minister give further details of the PACE efforts that might provide support to directly affected people in the short term?
I acknowledge that Willie Coffey has advocated the interests of people in communities in his part of Scotland whose livelihoods rely on opencast coal mining, and I acknowledge Aileen Campbell’s active engagement in her Clydesdale constituency and the engagement of members across parties who have made strong representations to me, irrespective of party politics.
The jobs in the coal-mining sector in Scotland are good. They provide very good salaries; indeed, I have been told that the average salary is £42,000. There are 4,500 jobs in the sector in Scotland, and it contributes £450 million a year to the economy. The sector is therefore vibrant, and it is professionally run to the highest standards of operation.
I set up the task force and Professor Russel Griggs will continue to play a major part in the work going forward, because we are determined to do everything possible to preserve opencast coal mining in Scotland. As we work together on a cross-party basis, as we will do in the task force, there will be many opportunities to do good for Scotland and to help to sustain many jobs in the areas that Mr Coffey and others represent.
I am very thankful to the minister for that full and detailed response. The PACE efforts are crucial at this early stage, particularly in the short term, and I welcome the minister’s commitment to engage in that process.
I welcome the minister’s comments on the steps that are being taken to support those who face the threat of redundancy, but the minister will also be aware of concerns about the restoration of the St Ninian’s site, outside Kelty, and the completion of a significant land arts project that is on-going there. What discussions has the minster been able to have with Fife Council about ensuring that that work is completed?
I acknowledge Claire Baker’s interest in the issue and I agree with her remarks on the Kelty scheme, which is an exciting renovation, involving as it does the construction of a map of Scotland on the land. The discussions have been taking place over a long period, with Scottish Government officials and Professor Russel Griggs dealing directly with all of the councils affected. That work will continue, now that the SMRT has been established.
I make it clear that the new body will largely be a facilitating body and not a funding body; it is not designed to remove, elide or extinguish the companies’ obligations. Plainly, they have primary responsibilities to fulfil, which will remain the case—and rightly so, for obvious reasons.
However, I am convinced that we need to work better and more closely together and not simply leave each instance to an individual local authority. There are matters involving the Scottish Environment Protection Agency, Scottish Natural Heritage, non-governmental organisations and, above all, communities that require an element of co-ordination and joint working, which I am satisfied will derive from the efforts of the SMRT going forward. I am therefore keen that the task force should have on it representatives from all the three main Opposition parties, as well as MSPs from the Government party, to assist in that work.
I welcome the minister’s announcement of the creation of a task force, which will be appreciated by my constituents in Fife who are affected by the liquidation of Scottish Coal. Does the minister acknowledge that we are in a bizarre situation in which we have sky-high energy prices hitting industry and driving nearly 40 per cent of households into fuel poverty at the same time as we have an abundant low-price source of energy in coal? What ideas does the Scottish Government have to try to square that circle?
As I think Mr Fraser will know, the main problem affecting the coal industry has been the world price of coal, in particular the fall in coal prices over the past three years. That has been the result of a number of factors that, with respect, I think are outwith Mr Fraser’s and my control. That problem was the cause of Scottish Coal’s financial difficulties.
We seek to provide every possible means of support for the sector. That is why we have been doing several things over the past 12 months, and two in particular. First, after representations from SRG directors, I was satisfied that the carbon reduction commitment was an unreasonable burden on the industry. After a long series of protracted negotiations with the Department of Energy and Climate Change, which were successful—I thank Greg Barker for his constructive input—we were able to extinguish that liability, which should never have arisen in the first place. Several million pounds were involved, so to that extent we were able to be of practical assistance through the pretty detailed and concerted joint working that has gone on over the past 12 months.
However, another threat faces the sector at this time—and here, I would be grateful of Mr Fraser’s support and perhaps that of the United Kingdom Government. The Office of Rail Regulation has proposed that freight charges for the coal sector be increased in just a few years’ time to £4.04 per kgtm. If it is not possible or is extremely difficult to trade profitably at the moment, how on earth will the opencast sector be able to face that imposition of additional costs at the very time when it needs concerted support? Keith Brown met the ORR last week and we will continue to make strong representations to it to tackle that problem and be of every possible support to the opencast sector in Scotland.
I, too, welcome the announcement of the task force. The minister may be aware that the trade unions have concerns about the communication coming from both the company and the Government to them. I very much welcome the minister’s announcement of the talks that he will hold with the trade unions tomorrow. They are, after all, the representatives of the workforce and have good communications with the workers affected. What steps will the minister take to keep the unions up to speed and will he include them in the task force that he is setting up?
I have always found input from trade union representatives to be invaluable on the task forces with which I have been involved; this will be no exception.
I am meeting Graham Smith and, I hope, Nicky Wilson of the National Union of Mineworkers tomorrow. We will extend invitations for the Scottish Trades Union Congress to take up at least two places on the task force. We will, of course, discuss what the appropriate representation should be, and it will be for them to make the nominations. We will be happy to benefit from their input on the task force—that will be an invaluable part of our work, which I anticipate will take several months.
The minister will recognise that there was quite a lot of opposition to the development of opencast mining in certain communities. Although the reputation of the industry is improving, it was poor in the past. What assurances can the minister give me that he will ensure that that reputation is restored? Without that, we will not have an opencast industry for people locally to support.
We want to do everything that we can to ensure that the industry enjoys as high a reputation as possible. In many parts of Scotland, the industry is an integral part of the rural community. For example, it provides 709 jobs in East Ayrshire, 312 in South Lanarkshire and 147 in Fife. In addition, it provides work for subcontractors in haulage and other support services.
I have examples of restorations of previous opencast sites that have been carried out well in East Ayrshire, which include Garleffan and Hannahston, near Drongan. That has resulted from close working, which we envisage the SMRT and, in particular, Professor Russel Griggs, will take forward. I hope that that work will enhance the reputation of the sector.
Building Industry
2. To ask the Scottish Government what its response is to the Federation of Master Builders’ latest state of trade survey.(S4T-00319)
We take very seriously the Federation of Master Builders’ latest quarterly survey. It is worth pointing out that it contrasts with some other recent surveys. For example, the Scottish construction monitor reported a slight rise in confidence in quarter 1 of this year. It is also important to note in the FMB’s survey that Scotland’s net balance—the difference between those reporting higher and lower workloads—has improved in the first quarter of this year, compared with quarters 3 and 4 of last year.
As I have said, we take the survey seriously, which is why we are doing everything possible to maximise capital investment, to reform and simplify procurement processes and to argue for a shift in United Kingdom economic policy.
Richard Baker should also be made aware that the specific policy demand made yesterday by the FMB was for a cut by the UK Government in the VAT rate for home renovations and repairs, which is a policy that this Government has previously lobbied the UK Government to introduce.
And we have agreed with the cabinet secretary on that policy.
I am pleased that the cabinet secretary is taking the report seriously. Why is it the case that the federation finds the situation for small building firms significantly worse in Scotland than in the rest of the UK? What action will the Scottish Government take to address the issue?
I refer Richard Baker back to some of the facts in my previous answer. The situation is one that we should take seriously—I want to make that clear. However, the situation, as reported for quarter 1 of this year, has improved on quarters 3 and 4 of last year. Indeed, the situation in quarter 1 compares favourably with that in some regions in England. Of course, none of that is an argument for complacency.
On the action that we are taking, despite the cuts to our capital budget, we will in this financial year invest £3.4 billion in capital investment. Of the £2.5 billion non-profit-distributing programme, £1.7 billion is in procurement or development.
As I have said—and as the Parliament debated last week—we are taking steps to simplify and reform procurement processes. Indeed, one of the announcements that I made last week to pilot project bank accounts is something that has significant benefits for the smaller suppliers in the construction supply chain.
The Government is taking action on a range of fronts and will continue to do so. I hope to get support from the member when I say that we will continue to argue for a more sensible economic approach from the UK Government.
We certainly support that argument. However, a number of areas are causing difficulty for the sector, such as the lack of delivery through the NPD programme, of which the cabinet secretary is well aware.
The survey shows that the situation for firms is much better in Wales. Wales is taking a different approach to procurement, which includes far greater use of community benefit clauses. Will such clauses be used more widely in future, in projects such as the Aberdeen western peripheral route? Will there be a new emphasis on community benefit in the forthcoming procurement reform bill?
On procurement, we look to learn from anywhere that has lessons to teach us.
The public contracts Scotland figures that we published last week show that, on the percentage of contracts that are advertised through the portal that go to small businesses and to small businesses that are based in Scotland, we perform very favourably compared with other parts of the UK. I will happily send Richard Baker statistics to illustrate the point. In recent times I have read quotations from Welsh politicians, saying that they should be looking to Scotland. We should learn from each other wherever we can do.
I readily recognise that there is work that we must do. However, whether we are talking about construction, procurement or innovations such as project bank accounts, we are doing whatever we can do within our powers to help the industry and we will continue to do so.