Chamber and committees

I commend my colleagues Ian Murray, the former Secretary of State for Scotland, and Euan Stainbank, the member of Parliament for Falkirk, for their efforts to save bus manufacturing, particularly by extending the new UK Procurement Act 2023 social value provisions to Scotland. Ultimately, Scottish bus manufacturing must have the most advanced vehicle production facility in the world if it is to be competitive, and the Government can offer direct subsidy to manufacturers such as Alexander Dennis to achieve that—notwithstanding the Subsidy Control Act 2022. Will the Government co-operate with the UK Government on benchmarking the site at Camelon, which is antiquated, ensure that it is upgraded and ensure that bus manufacturing facilities in Scotland are competitive?

To ask the First Minister what additional support the Scottish Government is giving to the public dental service, in light of reports that there has been a 10 per cent rise in spending over the last two years due to increased demand. (S6F-04287)

—that there is a need for an electric arc furnace and a direct reduction ironworks. Can the minister assure the chamber that the Government is working to try to proactively develop those assets and is not just standing by?

Does Stephen Kerr not find it rather odd that, despite the national shipbuilding strategy having been around since about 2019, there has been very little engagement from the Scottish Government on delivering it, despite the bulk of the UK’s shipbuilding industry being in Scotland?

I welcome the announcement, after a year’s impasse, of the impending restart of production at Dalzell because of the contract, via Navantia, for the fleet solid support ships. It is great news, but we need to build on it.

The minister referred to the £2.5 billion fund for steel investments that was set aside by the UK Government in the National Wealth Fund. I would like the Scottish Government to take a more proactive approach. We know from recommendations from the community and others—

It is a pleasure to contribute to today’s debate by closing for Labour. I express my best wishes to Kate Forbes for her future endeavours. It has been a pleasure to work with her in the past few years of this parliamentary session. It is a small world. I discovered that we apparently grew up on the same street—Sinclair Gardens in Bishopbriggs—and it is good to know that it has exported a disproportionate share of parliamentarians over the years.

This has been an interesting debate that has reflected a common mission for everyone in the Parliament, which is to grow our national prosperity. That is a consistent endeavour. I remember that, when I worked at Scottish Enterprise, looking at assessments of Scotland’s position relative to trade in other parts of the world, in 2015 we were around 33rd out of the 36 countries who were then members of the Organisation for Economic Co-operation and Development. Unfortunately, that position has not really changed. We can talk about absolute numbers but, relatively speaking, Scotland still has a lot of work to do. The process cannot be reduced to exchanging political arguments. Parliament needs a common framework and a common mission for developing our country’s prosperity.

Members are engaging in the debate in a spirit of co-operation on how we deal with that, because, ultimately, there are external factors that we have to confront. The most notable of those is the increasingly complex and volatile geopolitics that we are encountering in the shift away from a unipolar world order to one that is more fragmented, with greater competition between great power blocs and a beggar-thy-neighbour approach to protectionism in trade. We cannot be industrially naive—we have to be alive to emerging situations and deal with them accordingly. We must bolster our domestic supply chains, and we have to be more interventionist in that regard. Mr Leonard mentioned the need to be more geared towards industrial planning, and I share that sentiment.

The current situation is counterproductive, of course. We know that tariffs are ultimately a tax on consumption and that they reduce economic prosperity. They have never worked, and it is deeply disappointing that the United States has taken that course. However, it was welcome news to see the First Minister join the Scotch Whisky Association on its trade mission to Washington DC to press for a more favourable deal for Scottish whisky distilleries, which have been dealt a significant blow since the President announced the tariffs on imports to the United States.

According to the most recent survey of Scottish businesses, around 11 per cent have reported being impacted by the rise in American import tariffs earlier this year, which figure rises to 27 per cent for manufacturers. Therefore, we are seeing particular exposure in our manufacturing sector, in which businesses have cited impacts including increased additional costs, supply chain disruptions and reduced demand. Some 13 per cent of businesses in Scotland that were surveyed expect those tariffs to impact their business negatively.

It has been mentioned in the debate that the tariffs are costing our country £4 million a week, so it is important that both the UK and Scottish Governments exercise whatever influence they have to secure a better deal. It is to be hoped that, in time, the Americans will see the folly of introducing such tariffs.

It is a shame that our single biggest export—our national drink, Scotch whisky—is so affected by the situation, but it is also important to note that the industry itself is dominated by foreign ownership, with many of the profits from Scotch whisky leaving Scottish shores. Indeed, in 2021, a study found that nearly 70 per cent of malt whisky distilleries are owned by companies outside Scotland. We must look at our domestic ownership and investment in assets.

We have seen a recent decline in Scottish international goods exports. Last year, there was a 2 per cent drop to £18.4 billion. We have also seen a shallow exposure of Scottish firms to exporting activity, which has not changed substantially in the 10 years since I was at Scottish Enterprise. There are around 2,300 foreign-owned companies in Scotland that disproportionately take up the share of export activity, because they are already multinational in nature. That in itself is not a problem, but it signifies a lack of indigenous smaller firms in Scotland that are exporting. Consequently, the Scottish economy overrelies on foreign-owned companies to generate export growth. Indeed, large firms dominate exporting, in that they account for around 54 per cent of our export activity.

The First Minister says that those things should not be conflated, but my question reflects what public dental service dentists are telling us. Although the First Minister correctly observed that the public dental service is meant to be a safety net for emergencies and for those with vulnerabilities, it is increasingly filling in the gaps where routine NHS dental provision has collapsed. In areas such as Fife, Moray and the Borders, dentists no longer treat NHS patients, even if they are on their lists, so the only options are for people to seek care from the public dental service safety net or to use their savings to pay for private care. That is not good enough. What is the First Minister doing to tackle the scourge of dental deserts in Scotland and to end the growing overreliance on the already overstretched public dental service?

I agree that Brexit was a disaster—it has been the single biggest geopolitical mistake that this country has made, certainly in my lifetime. However, we are where we are, and we have to move forward together as best we can to minimise the frictions that the situation presents. I hope that we can do so together, because it has affected our ability to trade.

In 2019, of the 346,000 businesses in Scotland, only 11,000 exported. Of those that exported, 100 businesses accounted for 60 per cent of our exports, and 60 firms accounted for half of them. Therefore, there is a real shallowness in the entrepreneurialism of Scottish firms. We need to encourage greater activity and greater sales around the world. We can do that in practical ways, but ultimately it is about individual business behaviour. We need to look at how we can address that.

Our performance relative to that of other countries signifies how much work we have to make up. We are still rattling around the 20 per cent mark while other countries are way ahead of us. As I mentioned, Scotland is ranked in the bottom quartile of exporters in the developed world. If this country were to have the same level of exports as a proportion of GDP as other countries that rank in the top quartile, such as Denmark, Scotland would have an additional £35 billion of exports annually. If we can encourage our firms to be more ambitious in that regard, that will be a massive prize.

There are practical ways to do that. When I was at Scottish Enterprise, I worked on placing native foreign-language master of business administration students with Scottish firms to do business development. Within a few months, they were winning millions of dollars-worth of orders overseas. Even simple practices such as working with universities and with our foreign-language and international students can significantly change business opportunities. There are a lot of quick wins to be had.

The recent shipbuilding contract with Norway has certainly been a big win. It is to be hoped that the Government will get more involved in that project. I know that it has been reluctant to get involved thus far, but the project represents a huge prize for Scottish firms. There are opportunities for both small and medium-sized enterprises and the big primes to build on that contract with Norway—there is £10 billion of value to unlock.

The legislative consent motion is a welcome sign of co-operation between the Scottish and UK Governments. The Cabinet Secretary for Transport clearly set out the rationale for the expedited procedure. Ultimately, it is crucial that we decarbonise our bus fleet and that we work collaboratively to do so. Therefore, it is important that we give certainty to the industry by agreeing to the same timetable and allowing further cross-Government co-operation.

In the context of the threat to the future of the only major bus manufacturer in Scotland, Alexander Dennis, it is important that we expedite fleet renewals, which is a key component in supporting a demand signal to industry. It is also important to note that the recent ScotZEB scheme has not been efficient in converting the demand signal into contracts for Scottish manufacturers. Of the 523 electric buses that have been funded through the Scottish Government’s subsidy scheme so far, more than two thirds—340 buses—have been manufactured overseas, with 287 made in China by Yutong Bus. Only 162 buses have been manufactured in Scotland by Alexander Dennis and EVM UK.

From written questions that I have lodged, it is particularly concerning to learn that the Government does not collect data on where buses are manufactured, so its ability to calculate social value is limited. Social value weighting in public procurement in Scotland is not fit for purpose, and it needs to be bolstered to support critical manufacturers in Scotland, such as Alexander Dennis, instead of subsidising foreign competitors that have a clear industrial strategy to dominate the electric vehicle market and put Scottish industry out of business. It is clear that the Scottish Government needs to be cognisant of that and work further with the UK Government to extend to Scotland reforms that are being made to public procurement provisions in the rest of the UK, embedding social value at the heart of the public procurement process, so that Scottish manufacturers are supported to do so.

It is important to recognise the wider provisions in the Bus Services (No 2) Bill that will allow English bus franchising to further accelerate ahead of the pace in Scotland, which is already far behind. For example, the UK Government has already clarified and streamlined the guidance to make it easier, quicker and cheaper for local authorities to intervene on bus route development, and this new bus services bill will go further to reduce the barriers to franchising, including costs. Alongside that, the Government is building capacity within the Department for Transport to provide tangible on-the-ground support to those local transport authorities that wish to pursue franchising. That is exactly what we need in Scotland to accelerate the process with Strathclyde Partnership for Transport and other transport authorities. However, unfortunately, the Scottish Government has not been anywhere near vigorous or urgent enough in its actions.

I would like the cabinet secretary to respond to that and say how we can further support local transport authorities in Scotland to bring forward bus franchising at pace. I would be willing to support the cabinet secretary in the effort to build that collaborative approach to improve our bus services across Scotland, drive up modal shift and drive demand into Scottish manufacturing, which is a virtuous cycle. Let us seize this opportunity and make the most of it.

To ask the Scottish Government what its response is to reports that paid-for visits at private health clinics in the first quarter of the year were at the highest level recorded in a single quarter. (S6O-04910)