Chamber and committees

Perhaps Mr Whittle would like to name one of the people in his South Scotland region who would celebrate the removal of their produce from a market of 500 million consumers. Can he name some?

Thank you, Presiding Officer. You will be pleased to hear that I will speak for considerably less than six minutes.

Two years ago, I led a piece of research where we engaged with more than 1,000 business leaders in 74 countries. They saw Scotland as a country that produces quality products and a place where ethics rank high among our key attributes as a trading nation. No sector better meets those perceptions than the food and drink sector. Fewer sectors contribute as much to Scotland’s global brand. Access to good affordable food is critical for the health of our nation. We know that poor diet leads to poor health outcomes and, as has been commented, to poor learning for our children.

The sector has strategic significance, and we are all indebted to our farmers and producers for the work that they do to secure supplies. However, they face unprecedented challenges.

Over the past 24 hours, I have heard of local consumers in my constituency facing nearly empty shelves that were once stacked with food. My constituency staff have been discussing problems with entrepreneurs who hope to open both a restaurant and a food shop. They face huge rising costs of the basic materials that are needed to refurbish the premises due to issues with supply chains. One existing business in the drinks sector has told me of problems with supplies from Spain; until recently, it had received urgent supplies in 48 to 72 hours but now it faces an eight to 10 weeks’ wait. Others have faced problems with increased bureaucracy, and all that comes on top of the biggest difficulty of all—the recruitment of staff.

Such challenges are not unique to Falkirk East. UK-wide, as many as 500,000 jobs may need to be filled throughout the whole food supply chain. James Withers, the chief executive of Scotland Food and Drink, recently stated:

“The current evidence can’t be dismissed. Staff shortages are everywhere in the food supply chain, from farm to manufacturer to haulier.

And if you think gaps on supermarket shelves are worrying, remember care homes & hospitals need food too”.

A recent survey by the federation pointed out that 93 per cent of food and drink companies have vacancies that they are struggling to fill.

Good, skilled people lie at the heart of our food and drink sector. The current problem of employers being blocked from recruiting staff from elsewhere in Europe is caused in part by ideological dogma. I agree that we need to do more to increase the attraction of employment in food and drink and to provide skills for the future, but, at least in the short and medium terms, we need to open the gates to recruitment from our European neighbours.

This is my last point. I welcome work such as the Scotland food and drink recovery plan, as well as other work that is being undertaken by the Food and Drink Federation and our own Scottish Government.

I would certainly agree that the pandemic has had an influence on skills leaving. However, in terms of skills coming back, the so-called hostile environment—which applies not just to areas outwith the EU—is being strictly enforced on those friends and neighbours who used to come here from the EU. It has had a real impact on them feeling welcome to return, and that is what I bemoan.

Much of the labour market problem is due to the insanity of a Tory Brexit compounding problems on top of the pandemic. The deniers—I think that we have just heard from one—who are easily found among the Tory group should listen to the views—[Interruption.] No, I will not take another intervention. They should listen to the views of James Withers:

“Brexit has created a world where too often problems are denied, warnings ignored & evidence is dismissed”.

“Brexit has been an enormous shock to the labour market; a Brexit implemented in the middle of a pandemic, when supply chains were already straining.”

What are we to do? What kind of future—apart, of course, from an independent Scotland—are we looking for? I am inclined to support the view of Wendy Barrie of the Scottish Food Guide, who recently wrote to me:

“What we need in Scotland is to focus on quality: honest good food, sustainably produced on smaller units. Smaller scale, multiplied up, is more resilient for Scotland’s future and better for the environment”.

I am not saying this to imply that we should turn away from importing and exporting, an idea eloquently outlined by my colleague Jim Fairlie. Instead, we should ensure a healthier home market, where our commitment to quality and resilience serves our needs better. There is much to consider, but working with the sector will allow us to set down strong roots once more for our future growth.

We need to develop strategies that better prepare us for future shocks and global challenges.

Yes. I am talking about the new funding streams on levelling up, community renewal, UK shared prosperity and so on.

There might well be a residual benefit in letting the larger public understand the dog’s dinner of the current fiscal framework, but that is by the by.

Local government faces very similar challenges with regard to its being confident about when money will appear and so on. On the review of capital accounting, which I believe you requested and which is being led by directors of finance on behalf of local government, are you able to express any view on the extent to which the focus should be on understanding service concession flexibilities to facilitate financial planning, or do you intend to wait for the outcome of the review before local councils can get some more certainty about what flexibilities they have?

I have been listening to the contributions with great interest. The themes that keep recurring are around uncertainty and complexity. I appreciate the very difficult job that you have to do in reconciling what has actually happened with a forecast of what might happen, and I am interested in exploring that a bit further.

We have touched on some of the rationale that you use for your analysis when questions have been asked. I am interested in understanding the rationale for some of your analysis in your report. For example, we know that climate change will affect us, and net zero targets are being talked about a great deal. How do you reflect such issues in your analysis? Can you see a development of your report in which you reflect more on those issues?

For my last question, I want to pick up on Liz Smith’s point about the debt burden on small businesses. When you have your conversations with the UK Government, could you impress on it the need to implore banks to have flexibility in certain loan schemes? There are some protections in place, such as no personal guarantees for coronavirus business interruption loan scheme loans up to a certain amount, but the fact remains that, post the 2008 recession, there was some really poor behaviour by banks, with small to medium-sized enterprises forced into very distressed circumstances and made bankrupt or sequestrated. Will you add your voice to ensuring that banks understand their obligations, particularly to the SME community?

It is the best worst, as I think people would agree.

Cabinet secretary, your comments lead neatly to a question that I have, which concerns an alarming statement from the Fraser of Allander Institute in its report for the Economic and Social Research Council, “Designing and funding the devolved nations’ policy responses to COVID-19”, which you will know about. It said:

“The effect is to circumvent not only the Barnett Formula but the devolved governments themselves.”

I was interested to hear you talk about the implications of spending coming in from left field. Have you given further detailed consideration to a range of scenarios in which that might have unintended and potentially undesirable consequences for your ability to control and manage your budget and your ability to deliver on your policy imperatives?