Chamber and committees

Will the member take an intervention?

The Deputy First Minister might note that other countries have a model by which they take strategic equity investments in key firms to secure them for the long term. Is the Government considering developing such a model?

The point that the Deputy First Minister makes about demand signals is key, and it does not relate only to renewables: shipbuilding is a classic example of an area where such investment must be made. In that regard, Mr Rennie talked about the steel industry in Scotland and the fact that key assets are currently hanging by a thread. A huge opportunity lies in green steel and electric arc furnaces. Could the Government take a more proactive approach to developing those assets?

My constituent Liam Robertson has Parkinson’s, which is slowly taking away his independence and his quality of life. The disease is no longer responding to his prescribed medication. However, his consultant has advised that a treatment called Produodopa could be successful in slowing his deterioration.

When I wrote to the Cabinet Secretary for Health and Social Care, I was told that the decision on whether to prescribe that life-altering treatment is up to individual health boards. NHS Greater Glasgow and Clyde has told me that it will have to wait until care home applications are restored for the drug to be prescribed to my constituent. It is critical that we break that impasse and get Mr Robertson the vital treatment that he needs. Will the First Minister ask the health secretary to meet me and Liam Robertson so that we can ensure that he has access to Produodopa as soon as possible?

Another area of concern in that constituency is the number of homes left empty over the long term. In particular, there is concern about a tenement block at 272 Saracen Street that has been empty for more than 20 years. Will the minister undertake to write to the empty homes team at Glasgow City Council to encourage it to expedite the compulsory purchase of the building and its conversion into affordable or social housing without delay?

This has been a very interesting debate, which takes me back to my days at university, when I had the privilege to be taught economic history by a noted member of the Scottish National Party, Dr Duncan Ross.

Over the past century, the Scottish economy has faced long-term challenges. Fundamentally, it has been characterised by underinvestment, which has been and remains a chronic issue. I think back to an essay that I wrote on the Toothill report of 1961, which was commissioned by the Scottish Council for Development and Industry. The inquiry was run by John Toothill, who, at the time, was the managing director of Ferranti. That was a watershed moment for the Scottish economy, because the inquiry’s recommendations led to a realisation that Scotland’s faltering heavy industries should not be reinvested in. The inquiry committee wanted labour to be released from the heavy industries and reinvested in light industry, which would be developed largely through inward investment.

That was the first time that Scotland went in earnest for an explicit policy on inward investment, which at that time usually came from US multinational firms. Employment in US multinationals in Scotland peaked in 1974, when it stood at 92,000 employees. Of course, we know the longer-term story of silicon glen. It did not represent sticky investment; it was what the economist Turok described as dependent, and not developmental, investment. As we know, it led to a litany of firms closing throughout the 1990s, and a large reduction in Scotland’s industrial base in that decade.

We need to learn the right lessons from our engagement with inward investment over the past half century. It is encouraging that the Government has a mind towards how we can deepen the value chain in Scotland. I encourage it to further its ambition in that regard.

Investments that the Government has made in recent years can be characterised as reacting to crisis rather than being proactive in nature. I think of the example of McVitie’s, which was a Scottish company founded in Edinburgh and Glasgow and which ultimately became foreign owned by a Turkish company. A couple of years ago, it decided to withdraw the last remnant of that Scottish company from the country in which it had been founded, at the cost of nearly 500 jobs in a poor part of Glasgow. I do not condemn or criticise the cabinet secretary for her efforts in making a counter-proposal. However, it seems to me that the development agency should have been alive to the risks much earlier. It should have been able to work proactively with the firm to anchor that investment in Scotland if it had thought that the factory was at risk of closure in any restructuring round. That is just one example of many cases in which we could have been more proactive.

The Scottish Enterprise account management service does a great job—I used to be an account manager there myself—but perhaps it is not engaging with firms at the right level of decision making to ensure that we are ahead of issues when they emerge.

There are many other such examples. One accidental beneficial investment that the Government made in recent years concerned Prestwick airport. Although, ostensibly, that was done to rescue the passenger terminal service there, it turned the area into what we might call the Farnborough of Scotland, in that it is now largely recognised for its aerospace cluster. State ownership of such real estate assets is beneficial in the longer run. I encourage the Government to seek to develop that rather than dispose of it.

Several members made the fundamental point about there being insufficient investment. We need to find new ways of crowding that in, but we must do so in a way that does not introduce undue risks. The Bank of England has spoken about the risks of private equity investment, in highlighting that the lack of risk management of private equity can present longer-term risks. A number of Scottish companies have been delisted from the FTSE and have gone private. We do not really know what the longer-term implications of that might be. We have also seen Scotland not fully exploiting opportunities from unicorn companies, which have ended up in foreign ownership. Those are strategic weaknesses that the Scottish Government needs to address.

We need to consider other countries’ approaches to taking strategic equity investments and anchoring businesses to Scotland. A good example is Clansman Dynamics in East Kilbride, which is a high-end manufacturing company founded by Dick Philbrick in 1994. The business is built as a workers’ co-operative, so it is not possible to sell shares in it to a speculative owner. Dick’s concept of ownership was rooted in the idea that the business would be anchored in this country and would be a high-value firm that would develop and grow its business here organically. He did not want it to disappear into General Electric, Philips or Siemens—he wanted to keep it as a Scottish business. Indeed, it is a huge success. It is more productive than its peer firms, does most of its work in exports, and has high levels of engagement with its staff, who are engaged in every aspect of the business’s decision making. It is a wonderful example of what we could do more of in Scotland, by emulating the Mondragon co-operative structures that are prevalent in Spain.

A multitude of opportunities exists in Scotland, but the fundamental issue is how we can leverage investment for long-term value creation. I encourage the Government to look more broadly at other models and explore pockets of excellence where that can be achieved. I would hate to see us repeat the mistakes of half a century ago, when we overrelied on fluid capital investments from other countries that were not fully anchored here. We still have weaknesses in that regard. Some major firms that are not fully anchored in Scotland might be at risk of removal in any round of asset restructuring in those businesses. We must consider how we can approach that more effectively so that we do not see ourselves again having to react to corporate closures and then losing out.

I have been moved by the thoughtful contributions by members on all sides of the chamber. I, too, pay tribute to all the people who have been needlessly killed in the tragedy of war, which intensified in Israel and Palestine after the horrific pogrom of 7 October 2023, and in the brutal and disproportionate campaign of retaliation against the Palestinian people that amounts to collective punishment. It was welcome that the British Government suspended the processing of arms export licences to Israel in September last year.

It is also important that, at all levels of government, we uphold our international obligations. Prior to my election to Parliament, I worked as an account manager at Scottish Enterprise, and I agree that Scottish Enterprise should carry out appropriate due diligence checks so that we can be sure that state aid is not used to facilitate defence sales to states that are suspected of committing war crimes. The process should be reviewed to minimise the risk that products that are manufactured in and exported from Scotland might be used in breaches of the law of armed conflict.

We should also consider the products that the UK Ministry of Defence and UK defence contractors import from Israel. We should look to reduce those imports in favour of strengthening our domestic industrial base.

The motion that is before us fails to acknowledge the importance of the aerospace, defence, maritime and security industries in Scotland. They support highly skilled, well-paid and unionised advanced manufacturing jobs and they have a central role in our national defence and the collective defence of the NATO alliance. All the state aid that is in question today has supported projects that do just that.

The state-of-the-art applied shipbuilding academy at Scotstoun in Glasgow, for example, received a grant of £360,000 from Scottish Enterprise. That new facility will allow apprentices to gain hands-on experience with mock-up ships, as well as giving them access to cutting-edge STEM innovation labs. The shipbuilding academy is intended not only to be an asset of BAE Systems—a company that I worked for—but to be a facility that will be open to the entire shipbuilding industry in Scotland and to its wider supply chain. It will guarantee a thriving shipbuilding industry in this country for years to come.

Crucially, the applied shipbuilding academy will bolster national capabilities and support the continued growth of the largest manufacturing industry in Glasgow and in the west of Scotland, which supports more than 3,200 jobs. The shipyards in Govan and Scotstoun in Glasgow have operated since 1864 and 1906 respectively. In that time, they have never exported any naval ships to the state of Israel. Green members should be careful not to demonise shipyard workers in an industry that is synonymous with Glasgow and critical to our national security. As the member for Eastwood mentioned, the abuse of apprentice shipbuilding workers outside the Parliament last year was shameful.

Before Christmas, I visited Govan shipyard—I note that it is in the constituency of the Rt Hon member for Glasgow Pollok—for the steel-cutting ceremony of HMS Sheffield. I encourage members to visit the Glasgow shipyards and see the work that they are undertaking for the Royal Navy. That work is critical to our national security in an increasingly volatile geopolitical environment.

As the Prime Minister said yesterday,

“European countries must do more for their own defence”

in the face of increasing aggression from Russia and other expansionist regimes, which have scant regard for national sovereignty or international rules of co-operation to preserve peace. Now, 35 years on from the end of the cold war, is the time not to weaken our defence industry—the logical end point of the Green motion—but to strengthen our defence capabilities and industrial base. Although the Scottish Government should ensure that there is no link between Scottish Enterprise grant funding and defence exports to Israel and other states that are suspected of war crimes, Scottish Enterprise should absolutely be playing its part in bolstering our aerospace, defence, maritime and security industries, which support thousands of jobs and underpin our sovereign defence capability.

Will the member take an intervention?

Will the cabinet secretary give way?

Will the cabinet secretary take an intervention?