Young's Seafood
The final item of business today is a members' business debate on motion S3M-662, in the name of Elaine Murray, on further job losses at Young's Seafood, Annan. This debate will be concluded without any question being put.
Motion debated,
That the Parliament regrets the announcement on 11 October 2007 by Young's Seafood of the loss of 89 jobs from its Annan plant; notes that 100 jobs had already been lost in February this year and at that time the company announced that it remained committed to a long-term future for its Annan site; notes also that only approximately 25 jobs are likely to remain at Young's Seafood in Annan; believes that the workforce and the local community have been badly let down by the company, and considers that the consultation period for the current tranche of job losses should be extended from 30 to 90 days to enable workers facing redundancy to consider relocation options and that those workers wishing to take up employment opportunities at other sites should be offered appropriate financial support.
This time last year, Young's Seafood employed around 250 people at its site in Annan in Dumfries and Galloway. By Christmas this year, there might be only a tenth of that number still in employment with Young's in my constituency. This is a story of the betrayal of a loyal workforce and of a community that has sustained the company in Annan since the 1940s. It is also an example of—to quote Mike Brider of the Transport and General Workers Union section of Unite—
"globalisation at its very worst".
On 14 November last year, Young's Seafood announced that 120 jobs were to be lost at the Annan site—an announcement that was widely condemned. The company's plans involved the transfer from Annan to Thailand of the process of deshelling langoustine tails, which are required to manufacture scampi—a product that was invented by Young's some 60 years ago. As of February this year, langoustines that have been caught off the west coast of Scotland have been undertaking a nine week, 12,000 mile round trip to Thailand, where their shells have been removed by workers who are reportedly paid 25p an hour. On their return, the tails are breaded, packaged and sold as "Scottish scampi".
That announcement, in itself, was a devastating blow to Annan, but Young's was quick to issue assurances to the workers who would remain. According to the company's press release of 14 November 2006, the "re-introduction of hand peeling" was part of a long-term plan to grow the Scottish langoustine market. Young's director of scampi stated:
"we remain committed to Annan and fully expect that our development plans for the Scottish langoustine will result in long-term security for the site and even possible expansion in the future."
The company's deputy chief executive officer, Mike Parker, also advised me during a meeting at the beginning of this year that transporting langoustine tails to Thailand was carbon neutral, as there would be savings in water use and refrigeration. Although he advised me that this claim was being validated by the Carbon Trust, I found it to be rather counterintuitive. However, an evaluation that was undertaken by Enviros Ltd stated that possible effects range from a net carbon reduction of 292 tonnes to an increase of 229 tonnes. The Carbon Trust agreed that the methodology that was used by Enviros was sound—but the input data were provided by Young's. Perhaps I am cynical, but we should all have been equally sceptical about some of the other assurances that the company was offering.
After a sustained and vigorous but sadly unsuccessful campaign by the T & G, 100 workers were made redundant in February this year. Less than a month later, at 1.30 am on Thursday 8 March, a major fire broke out at the scampi production plant in Annan. Mr Parker, the deputy chief executive officer, issued reassurances that very day. He said:
"there is absolutely no question mark over the future of the facility or our Annan employees … I want to make it absolutely clear to all our staff that their jobs remain secure. Young's is committed to staying in Annan and building a bigger scampi business."
However, on 11 October, a mere 32 weeks after those assurances were given, Young's announced a planned restructuring of its United Kingdom operations, with the transfer of 23 jobs in Pewsey and 89 in Annan to Cromer, Fraserburgh and Grimsby. Young's cunning plan is to reduce the workforce in Annan and to retain the site as its
"langoustine grading, freezing and coldstore operation."
However, one wonders for how long using the Annan site as a big freezer will remain viable.
Unlike the previous redundancies, when there was a 90-day consultation period, a consultation period of only 30 days has been offered. The unions have been arguing that that is not enough for workers to consider the option of relocation—which is available because an additional 50 jobs are now available at the site in Grimsby, hence the wording of my motion. However, John Holroyd, the regional organiser for T & G Unite, has advised me that most of the work force are totally scunnered, and have no wish to remain in the employment of Young's at Annan or anywhere else. Who can blame them? To date, three workers have indicated an interest in relocating to Grimsby—I understand that the company is offering them the financial incentive of the train fare there and a week in a bed and breakfast.
I accept that the Scottish Government is not able to force Young's to reverse the decision—it is a commercial decision that has been taken by a commercial company—and we hear frequent complaints from industry and politicians about overregulation of industry. My colleague John Park will expand on that issue. In this case, there has been no protection for Scotland-domiciled workers who are producing a product that is labelled and marketed as being Scottish, and who are working for a company that has its headquarters in the United Kingdom. There is no regulation to protect those workers or to force the company to say that the product is not processed in Scotland.
The current minister's predecessor, Allan Wilson, advised me last year that Young's had been taking forward its application for a Scottish Executive Environment and Rural Affairs Department processing grant for four deshelling machines for the Annan site, which would produce a better product. Members of Young's management also referred to that in conversation with me last year as part of the alleged potential expansion. Can the minister or his colleagues in the rural development and environment team advise whether that grant was awarded to Young's and if so, what has happened to the four machines that should have been coming to Annan?
This is a sorry tale of globalisation and betrayal of a workforce. I do not blame any of my constituents for not wanting to work for the company any longer. I seek the minister's assurance that whatever can be done for the workers who are being made redundant will be done, in order to enable them to reskill and to find alternative employment in the Annandale and Eskdale area.
I congratulate Elaine Murray on securing the debate. I will clarify for members why I did not feel able to sign the motion. It was not because I disagreed with much that was in it. In fact, I agree with about 95 per cent of what is in it, and it is almost impossible to argue with the assertion that the people who are employed by Young's have been badly let down by the company.
What switched me away from signing the motion was the idea that extending the consultation period or offering relocation would have any great impact. The point that Elaine Murray made about whether workers would feel keen to relocate and the figures that she gave answered that question rather well. If I was an employee of the organisation, not only would I not be keen to relocate, I would wonder what future lay ahead, because there is a cultural issue concerning Young's, which employees have to consider carefully. I did not disagree with her tone or the sentiments that she expressed—perhaps there is even greater cynicism on my part than the cynicism of which she spoke.
We could focus today on what the future of Young's might be, but given the scale of what has happened there, it is more appropriate to ask what the future is for Annan and the local area. Elaine Murray touched on the history of the company, the scale of the reduction in head count and the serious consequences that that has had for the area.
I have been impressed with the fact that, when the matter has been discussed locally, people have not been raising expectations unfairly. It is the easiest thing in the world for us as politicians to stand up and say that something must be done, as if we can wave a magic wand. In reality, in circumstances such as these, there is very little that we can do immediately. To her credit, Elaine Murray did not suggest in the motion or in the local press that there is a magic wand available to the Scottish Government or to the United Kingdom Government. Instead, we have to focus on what we can do for the area. Retraining must be available for the significant number of workers who are affected.
There are also broader issues to be taken into account in this part of the world. Chapelcross nuclear power station is a serious economic issue with serious consequences in respect of employment. Dumfries and Galloway already faces demographic challenges: if there is a perception that employment opportunities are decreasing, it is difficult to turn around the demographic crisis, to keep young people in the area, and to prevent people from moving to employment opportunities elsewhere. There is a serious challenge for the local enterprise company and the Government to address. It will not be easy to reverse the trend.
I was intrigued by some of Elaine Murray's points on labelling. Many people would find it astonishing that a Scottish product can be processed so far away from Scotland but still be marketed as being Scottish. Labelling and sourcing of products are wrapped up in legal complexities, so it might be the case that nothing can be done. I will be interested to hear what the minister will say about that.
If any Executive funding went to Young's in recent times, we should consider carefully whether it can be recouped. In general, governments of all persuasions are happy to hand out money to companies but are not nearly as robust in getting the money back when companies fail to do what they ought to do. It is time for us to reassess the circumstances under which we pass money out, not just to organisations in the food industry, but to others.
As Elaine Murray said, there is no expectation that the minister can wave a magic wand, but there is real interest in what can be done to improve Annan's prospects. We cannot allow the recent bleak news to blight the future of the community. We have to send out a message that the local community has a future.
I congratulate Elaine Murray on bringing the motion to the chamber for debate. Given that I come from the opposite end of Scotland, members might wonder why I rise to my feet in tonight's debate. After all, there will not be many column inches in the John O'Groat Journal or the Caithness Courier on what I am about to say. However, I believe that one of the better aspects of the Parliament is that there are friendships across party boundaries. It is in the spirit of that friendship, and with a degree of sympathy for Elaine Murray and her constituents, that I speak. After all, what happened in her constituency could easily happen in my constituency—a remote, rural constituency that depends to a large extent on fishing interests.
Elaine Murray described the grotesque business of the langoustines being taken to Thailand to be processed by workers who work for 25p an hour. I congratulate Derek Brownlee on his thoughtful contribution. As he said, there is no easy answer. The issue of globalisation and small, local, skilled workforces being put out on the streets lies before us, and I fear that it will arise again in the future. The question for the minister is, how important is it to us to keep such food processing local? In terms of the carbon footprint, energy and food safety, it makes the greatest sense to process food near where it is produced or caught. The issue is about labelling and consumers' awareness of what they are buying.
Notwithstanding the fact that there is a poor section of society for which we must strive, it is ironic that the average disposable income of people in Scotland has hardly ever been higher, and it is why people can be choosy about food and spend more on food and drink than our parents or grandparents ever dreamed of. The issue for the minister—it is a tricky one—is how we should balance free enterprise and the global market against intervention to try to keep workforces local.
I have bored the Parliament before with the fact that I worked in a fish factory. It is not a pleasant job, but skills are involved, and if we lose those skills we cannot necessarily get them back. Come the day when energy is so expensive that we have to process food locally, it will be a shame if we have lost the skills to do so.
The workers should be recognised for what they are—a skilled, dedicated workforce of people who have given their lives to the company. Elaine Murray said that they were offered a ticket from Annan to Grimsby. That says it all. I am sure that Elaine Murray has our sympathy, as does the minister, in trying to work towards a solution. It is not a job for one minister. It will take a team of highly skilled civil servants to work out how we can tackle the problem, but the matter is hugely important to Annan and many of our other remote and rural constituencies.
I congratulate Elaine Murray on securing the debate. I apologise on behalf of Mike Russell, who would have liked to be here, but he has a ministerial meeting.
I agree strongly with the comments in Elaine Murray's motion about extending the redundancy period and increasing help with transfers. I understand Derek Brownlee's argument, but the difficulty of finding alternative jobs in a place such as Annan means that making extra time and support available might help a few people who are on the margin of deciding to relocate by giving them extra employment for a period, however long.
The examples that Elaine Murray gave of statements that Young's management made and then reneged on give some businesses—by extension, all businesses—a bad name. I do not know whether it was a case of duplicity, of speaking without thinking or—more important—of speaking without consulting the finance director. I know that if politicians had made such comments they would receive opprobrium in the chamber.
We must realise that Young's is still a big player in Scotland. Ironically, I note that some jobs and some work from the Wiltshire plant, which is closing, are going up to Fraserburgh. That is the irony of capitalism. I am not arguing that we should do away with capitalism, but one of its ironies is that we tend to set one group of workers or one location against another.
As Elaine Murray said, commercial imperatives drive large firms. Scotland is an exporting nation. We cannot set up barriers, because doing so would cost us much more than any benefits we would gain. We must therefore think about what we can do. I can think of two things.
First, Elaine Murray alluded to labelling. I have said previously in the chamber that it should be made clear when goods are produced in one place and processed elsewhere. I must admit that I do not buy Young's frozen or chilled products, but I looked at its website, where it has examples of its labels. I could not see any labels that stated "Scottish produced", but one referred to
"scampi, from the coastal waters of Britain & Ireland".
There was no reference to it going to Thailand. To be fair, the website stated:
"We also peel some langoustine by hand in Thailand, where we have a dedicated team who are highly skilled".
I suspect that high skill was less of a factor in Young's decision than low wages. We can try to make labelling describe in total where a product has been on its journey from origin to the supermarket shelf, so that people can make an informed decision.
Secondly, we have to create a stronger economy in Scotland, through measures such as reducing corporation tax and ensuring that we have the sort of environment that makes the country a more attractive place to do business. I do not know whether that would influence Young's decision, but it would influence many firms, so that when a firm went for whatever reason—bad or good—there would be more chance of other jobs being available locally. In answer to Mr Stone's question, that is the way that we must go.
I am very keen to speak in the debate, as I have real interest in the issue and would like to show solidarity with and support for the workers at Young's. It is important that the Parliament does that.
I have been through the redundancy cycle myself. I worked at Rosyth dockyard and was the union convener there when there were hundreds of redundancies. It is important for people to be given extra redundancy notice, so that they have extra time to adjust; it is an important time in people's lives. Some people make the most of the opportunity and any support that the Government can give the workers at Young's through the partnership action for continuing employment initiative would be very welcome in the circumstances that they now face.
The situation at Young's is a disgrace. The company needs to take any criticism that it gets from within or outside the chamber firmly on the chin. I believe that sustainability should be a key component of economic prosperity, so I was appalled last year when Young's decided to move its scampi-peeling operations from Scotland to Thailand, flying the food back to be sold in the UK. That might save the company in wage costs, but there are a lot of other costs that we have not quantified. What about the costs to the environment, to the workers and to the local community that we have been talking about?
I am fed up with hearing from a small but vocal lobby of business organisations about the burden of red tape on employers. That does not truly reflect what happens in workplaces throughout Scotland. The real challenge that Scottish business faces is how best to respond to the harsher side of globalisation, which is what we are talking about with Young's. We need to hear more about how we can move Scottish industry up the value chain. We also need to hear more about how we can improve workplace productivity. That is where the debate needs to go. We must ensure that Scotland has the right skills to remain internationally competitive. That is what the Parliament should be discussing and what business organisations should be pushing towards the Parliament.
I ask the minister to consider some issues in his summing up. I ask him to challenge head on the myths that are out there about red tape. As part of the United Kingdom, Scotland compares very well internationally—it is rated sixth in the world by the World Bank for ease of doing business and it regularly tops Organisation for Economic Co-operation and Development surveys as a lightly regulated economy. It would be helpful if the minister agreed to challenge the myths that are out there. I also ask him to challenge business to take advantage of the favourable economic conditions that exist in the UK just now and to ensure that the priorities of Scottish business are to invest in people, plant and productivity over the next few years. I hope that the Government will act on those suggestions.
I finish by paying tribute to the workers at Young's. As members have said, it is doubtful that we are going to change the company's decision by having this debate, but it is important that Parliament send out a message of support for the workers and for the community that relies on employment at Young's. We must send out the message that the Parliament will support only those businesses that treat their employees fairly and show loyalty to Scotland.
I, too, congratulate Elaine Murray on her motion. I welcome the chance to speak in the debate, as Annan is an area with which I have had a long family history.
I will focus first on the local economic impact of the decision of Young's to cut jobs in Annan—again. In the past, the company has declared a commitment to the south-west of Scotland that it does not seem to be putting into practice now. The news of the 89 jobs to be lost this time round is disappointing, to say the least. I hope that the company will review its decision and reduce the number as it did in February, when 120 job losses became 100.
Our sea-fishing and related industries and their communities are mutually dependent. Not only are those industries integral to the heritage and traditions of the communities; they are also essential building blocks for the future of the local economies. From the perspective of the changes that are taking place in much of rural Scotland, those industries are vital to retaining population and, hence, viable communities. A greater proportion of the south of Scotland's economy depends on agri-food industries than is the case for the national economy, which clearly demonstrates the need for that sector to be retained within the region. I hope that the minister takes note of that.
Of course, there are several financial considerations for any company. It makes sense to locate a business where it is most cost effective for the goods to be processed, according to the business guru Michael E Porter in his "Competitive Advantage of Nations". Having the Annan operations temporarily relocated to Grimsby, following the fire in March, will perhaps have given the company's management a chance to see another way of working—a way that is probably less costly.
However, the company has a moral obligation to the local community in Annan. That is why I agree with the motion that the consultation period should be extended to 90 days. The company should make the relocation options clear to those who face redundancy and everything should be done to help employees who wish to relocate. With transfers of work to Cromer, Fraserburgh and Grimsby, employees at Annan will have physical reasons why they cannot move so far to follow their jobs—their families and finances and so on. I hope therefore that the company will offer an appropriate redundancy package and that employees will be given time to take stock. We also need the company to give a meaningful commitment to the area. As Elaine Murray said, we do not want to see it as a big fridge.
This most recent development is a sad reminder that much of our food and drink processing is being outsourced to cheaper units abroad because of globalisation. The 100 job losses at the Young's plant in February occurred when the prawn de-shelling was relocated to Thailand. That is a 17,000-mile round trip with, of course, environmental costs, as John Park said. Most members who are in the chamber this evening will be aware of my interest in the use of local produce, and I will be interested to hear about the Government's progress on that, but using the food that Scotland has on offer is just a small part of that. It is a great pity that, in some circumstances, the use of Scottish produce is blighted when the economic advantage of processing it elsewhere is so great. It is shipped to other countries and then shipped back. It is beyond sensible reasoning and removes economic benefit from Scotland for what will be a relatively small saving to a company of the size of Young's. It is unsustainable, as is lamb flying in from New Zealand and beef from Brazil where, interestingly, farmers are now losing money on their products.
I hope that the debate can be used to highlight the importance of ensuring the security of sustainable local economies and what they mean to their communities, particularly those in rural areas. Local economic prosperity is key to ensuring the success of Scotland's communities and I hope that Young's will bear that in mind for its future operations in the south of Scotland.
I, too, congratulate Dr Elaine Murray and thank her for raising the issue of the latest proposed job losses in her constituency. She has given us the opportunity to debate the challenges that those job losses present to the people who are employed by Young's Seafood, and the implications for the economy of Annan and the wider Dumfries and Galloway area. Like Jamie Stone and Jim Hume in turn, it is easy for me, coming from my constituency, to empathise when the threat to population, viability, and the vibrancy of the local economy is so palpable.
I have listened with considerable interest to some very good speeches, and noted the views of those who have taken part in the debate. It is clear that we all understand how enormously stressful a time this is for Young's employees in Annan, especially at this time of year.
Elaine Murray is an esteemed colleague. We spent four years together on the Finance Committee, so we know each other; she knows that I am a devotee of taking a better, more collegiate approach, such as that which we see in Japan. I prefer to see management and staff working together to produce a joint future. The present situation represents a lost opportunity for that.
As John Park knows, other places, such as the Diageo cooperage in Alloa, are taking that new Japanese-style approach with people sharing the work, managing continuous improvement, improving workplace conditions, and achieving an appropriate level of regulation that is balanced, optimised and respectful. We need to look carefully at merging the return of bringing pride into work with those Japanese approaches.
Elaine Murray mentioned the specific issue of grants. I understand that the £426,000 award has not been paid, and it will not now be paid.
A consultation process is under way, although that will offer no comfort because it is clear that the company believes that it will lead to 89 job losses at the Annan facility. Those job losses come on the back of the February job losses, so they will add to the impact on the economy.
On Monday, Scottish Development International staff and the Dumfries and Galloway account manager from Scottish Enterprise visited Young's to see what could be done to review the situation and examine the rationale for the move, the company's relocation offer—I understand that that will stick in the craw, because it is unacceptable—the potential for the company to grow in the future, and the potential for alternative local employment. That meeting heard Young's say that the situation had been triggered by the fire that has been mentioned and the company's subsequent decision that restoring the plant was not commercial. The company stresses, however, that that does not reflect in any way on the workforce in Annan.
We are rolling up our sleeves to ensure that everything possible is done to assist people. We understand that companies such as Pinneys of Scotland, St James Smokehouse and Tesco are likely to be looking for people with those skills, so we are working hard to ensure that local people are able to grasp those opportunities.
Although the decision by Young's Seafood will mean that only 30 of its jobs will remain in Annan, we should note that the company is still a major employer in Scotland, with 1,500 employees over five sites. Over the past eight years, the company has invested substantially—including a recent £10 million investment, its cumulative investment amounts to £50 million—so the company is a serious player. As a major UK company with a disproportionately significant presence in Scotland, the company has some 30 per cent of its turnover based in Scotland and it currently buys £70 million-worth of seafood in Scotland to which it adds a further £84 million of value.
As was mentioned, provenance is an issue that we need to consider with great seriousness. Given that we are legislating on whisky provenance to ensure that we maximise added value, I am certainly keen to debate with the company whether consumers, who are becoming more and more discerning, would be willing to pay a premium for a product if it was turned round more quickly and made available here in Scotland. As Alasdair Morgan said, having a stronger economy will give us more discerning consumers who are willing to pay that premium. I hope that there will also be a greater propensity among companies to see the potential to add to their margins by delivering products with that type of provenance.
Meanwhile, as I said, we are rolling up the sleeves. The partnership action for continuing employment is already embedded in the company and is getting thoroughly involved. It will help people to get ready for interviews and it will address the staff on 5 and 6 November. That is being done with full support. We understand that some 15 staff have already had interviews with other local food processing companies.
No matter what action is taken, the proposed job losses are devastating in a community such as Annan. Although Scottish Enterprise's focus has, properly, been essentially on companies that have the greatest potential for growth—Young's was viewed as one of those companies—we need to ensure that we do everything in our power to get the vibrancy back into the area.
With our moves on the enterprise networks, I am looking to ensure that organisations come together. I think that that has already been triggered in Argyll and Bute, where we have a coming together of the business community, the voluntary sector, the council and the community councils at both constituency level and sub-constituency level.
In that climate, I am keen to ensure that we work exceedingly hard to leverage great brands such as Dumfries and Galloway—and, indeed, Annan—so that we can persuade more and more companies to be based in the area, to take advantage of local skills and to move forward. Perhaps in the future Young's will even be persuaded that its decision—like those of other companies that moved their call centres to India—is a false economy, which it would be better to reverse by adding more value here. Companies need to work with committed staff who can come up with the ideas that provide added value and a better way forward.
When I watched Sir Gerry Robinson on television earlier this year, I was very taken with the way in which he went into hospitals and identified that hospitals had heroes to be made and people on the front line to be activated in order to get better results. Those better results were forthcoming. Therefore, members can imagine my joy when, at the Highlands and Islands convention this week, I discovered that Highland NHS Board has involved those very people in our public services. If we are involving public sector staff to achieve perpetual improvement in public services, I expect more private enterprises in Scotland to adopt a similar process: set a worthy aim; share it with all stakeholders, including staff; commit to continuous improvement; introduce good ideas that have worked elsewhere; and keep the whole thing under open statistical control. A key statistic will be the number of people in Scotland who are in compelling and rewarding work.
Meeting closed at 17:44.