Chamber and committees

In June, the minister advised Parliament that the remainder of the £10 million a year MAT funding had been earmarked for the recruitment of more than 100 additional staff. She has highlighted that progress has been made in some areas. However, given that Glasgow has the highest proportion of drug deaths in Scotland and not a single MAT standard had been fully implemented in the city by the target date that the minister set, will she update the Parliament on how many additional staff have been recruited in Glasgow and how much of that £10 million has been allocated to Glasgow in particular?

Although the opening speeches focused on concerns about and deficiencies in the bill, it has been great to see the debate evolve over the course of the afternoon to focus on the opportunities that it presents, culminating in the speech made by the member for East Lothian, on the opportunities for small and medium-sized enterprises in particular. He mentioned his experience working at TSB and Bank of Scotland. My mum worked for both those banks, so I, too, express the opportunities, but I also highlight how concentrated Scotland’s financial services landscape is on a handful of big financial institutions. Although they have a lot of opportunity to open up increased financial packages for business lending, perhaps that is something that could be considered more broadly.

An issue that was raised when the committee took evidence was that conventional financial institutions highlighted the opportunities for business lending but did not recognise the concerns about consumer risks because they would not ordinarily enter that space, as the credit products that they offer would not be provided to people in distressed circumstances. That is where there was a major gap in the consideration of evidence—the right modelling and consultation was not carried out because people are not going to advertise that they are going to rip people off. The Wongas, BrightHouses and other nefarious institutions of that sort are not going to turn up at the committee or the Scottish Law Commission and advertise that they plan to prey on vulnerable people.

While we highlight the opportunity that the bill presents, which is absolutely correct, we have to be cognisant that many of the risks do not present themselves as obviously as we might like. That major concern became apparent only when the money advice agencies came forward and said that the bill could potentially open a Pandora’s box. I am pleased that the Government has taken swift action to address those concerns. I hope that we can be wary of that in the future.

There have been some very important speeches today, particularly from Jenni Minto and Maggie Chapman, who talked about the risks that businesses currently face in a very difficult financial landscape in which we are seeing increasing cost pressures. Jackie Dunbar referred to structural issues, particularly around invoice, finance and cash flow constraints, which have strangled and destroyed many great businesses in Scotland that had a lot of potential to offer our country. The landscape of destruction that has been unnecessarily brought about by the lack of access to finance is tragic—it has stymied our economic potential.

A potential solution to that—or at least something that will help—will be a major opportunity. It was mentioned that 3,000 businesses fail every year due to cash flow constraints. To be able to liquidate that liability and pass it on to a business or secondary provider that is not under the same financial constraints would be a definite boon for small and medium-sized enterprises across Scotland.

Maggie Chapman made a really important point about the huge opportunity for businesses with intangible assets, which are an increasingly important part of our economic model in Scotland. The traditional industrial model with big factories and assets that were property based is no longer such a feature of our economy. Increasingly, for small and medium-sized enterprises, it is the value of intellectual property that counts. When we consider the richness of our university sector and its spin-off companies in particular, the huge opportunities to raise increased finance are really exciting.

I will support the bill at stage 1; Labour supports the bill because it agrees with the general principles of this innovation. I thank the Scottish Law Commission for its work in the public interest to develop proposals to deal with a clear deficiency in public policy in Scotland, as colleagues have illustrated in the debate. I thank my colleagues on the Delegated Powers and Law Reform Committee for the work that they have done, along with me, to look at the bill and identify concerns that had not previously been identified. That demonstrates the earnest work of the Parliament to constructively and collegiately address drafting deficiencies and ensure that we have the best possible legislation on the statute book.

As the minister said, the concern that came out loud and clear from all the evidence that the committee heard was about the risk to consumers, which would be an unintended consequence. The bill was developed and drafted with businesses in mind; it was intended to address a competitive disadvantage to doing business in Scotland because of concerns about the ability to use assets that were held in stock, which is a form of waste for business.

The bill will allow businesses to raise liquidity against such assets. In Scotland, the most obvious example of them is barrels of maturing whisky—they represent tens of millions of pounds of assets that cannot be used for the benefit of further investment and for the development of industrial growth. In that respect, the bill will create a great advantage for the Scottish economy and will further the development of industry in our country.

I welcome the minister’s indication that, to address the key concerns about consumers that witnesses highlighted, the Government will take action at stage 2 to carve out consumers from the bill. In committee and as a party, Labour stood ready to lodge amendments if the Government did not do that, but the minister’s comments have given comfort.

There is a worry about how the bill was developed, which colleagues have referred to. It has taken the best part of a decade to develop the bill from the initial process that started with the Scottish Law Commission to the bill’s arrival in the Parliament for stage 1. We all need to reflect on the efficiency of the development of Scottish Law Commission bills and on their potential for obsolescence.

The committee happened upon the bill’s major issues for consumers only quite late in the process. Citizens Advice Scotland, StepChange, Money Advice Scotland and Christians Against Poverty highlighted the distinct lack of consultation of consumer and money advice stakeholders since the process for developing the bill started in 2010. In the spirit of continuous improvement, we need to reflect on that.

Martin Whitfield makes a really important point about the gaming industry. It is a good example of where Scotland is a world leader but has to sell the companies to overseas owners in order to raise the finance to bring the games to market. In a way, we are seeing massive overseas ownership of a sector in which Scotland leads the world because the companies that grow out of Scotland cannot raise the finance—they get to a certain level of financial gearing and then they hit a glass ceiling. For example, Grand Theft Auto, which was developed in Dundee, is now owned by a company based in New York. The situation is almost tragic. Would it not be great to have the global headquarters in Dundee, rather than New York, given that it is driven by Scottish ingenuity? Those are examples where the bill could be a real game changer—pardon the pun—for the Scottish economy.

Members such as Katy Clark raised important points about the gap in understanding around the development of the bill. The voice of the poor is very often the last to be heard, and this process is an example of that happening. Unscrupulous and predatory activity in our economy is very little understood by the establishment that develops these bills, and we need to take cognisance of that. It is great that the Parliament has managed to effectively capture the issue, which speaks to the utility of the Parliament as an institution in the land.

Mike Dailly’s description was very apt when he said that the bill could have led to the introduction of “virtual pawnbroking”. To have that happen in our economy during a cost of living crisis would have been absolutely disastrous, so it is great that the Government has addressed the issue, and we support it in doing that. However, we also need to emphasise the huge opportunities. I go back to the point that Martin Whitfield and Maggie Chapman raised: this is an opportunity for the Government to look at how the enterprise agencies and the Scottish National Investment Bank could capitalise on this. It is not just down to the private financial sector to develop products; it is also for our state enterprise agencies to look at how they can capitalise on the opportunity, so that we can bring forward products that will help grow the Scottish economy and improve our productivity.

With that, I further emphasise Labour’s support for the bill at stage 1.

Will the member take an intervention?

We could work collaboratively with my colleague Martin Whitfield’s Standards, Procedures and Public Appointments Committee to identify opportunities for improving the Parliament’s processes and working more collaboratively and constructively with the Scottish Law Commission to improve the efficiency of the legislative process. I know that there is a reservoir of reports from the commission that are yet to reach the Parliament, which does not serve the public interest as well as it could be served. We could increase the parliamentary time that is available for such bills and we could look at ways of expediting the process. We must continually test and adjust the pool of people and stakeholders that we engage with, to ensure that we do not end up, late in the day, having to retrofit bills with quite substantial provisions, which might be risky for the wider public. I think that it is important to contribute that to today’s debate.

I have concerns about sole traders, which the minister talked about. There was definitely a big risk that harm to consumers would occur as an unintended consequence, but the committee wrestled with the dilemma of how to identify the threshold between individual actors and corporate actors, particularly given the gig economy and increasing changes to our economic structures. Indeed, that point was highlighted by Alan McIntosh in his evidence. I pay tribute in particular to the contributions from Alan McIntosh, Mike Dailly and Myles Fitt in highlighting those concerns to the committee.

In relation to business debts, they have expressed continued concerns that the bill would allow statutory pledges to be called up in relation to self-employed consumers without a court order being obtained. That is a major concern, and we look to the Government to push further to address it through amendments, because it could in practice introduce all sorts of potentially perverse behaviours that could be deeply damaging. Some of the examples that were used, such as statutory pledges over farming livestock, did not seem particularly convincing. Even in that case, there are animal welfare implications and the supervision of the courts would be prudent to say the least.

There is also concern that courts using unconventional and informal remedies to take possession of the movable property of a debtor could potentially result in someone facing wrongful loss of their property and, in a worst-case scenario, public order disturbances and criminal offences. In that context, the Government should, through amendments, go further and consider introducing court orders in relation to self-employed traders. Not to do so would be a mistake, and it would potentially introduce further risks for many vulnerable consumers who are forced to become self-employed; I am thinking of the gig economy or potential issues for taxi drivers or people working in the hospitality sector. The Government needs to investigate and consult further on those areas.

I highlight some particular provisions that the committee has recommended, which may be of assistance. With consumers in mind, the committee proposed that the minimum threshold for an asset should be increased. The committee recommended that the amount should be no lower than £3,000 and should be tied to an annual inflator associated with the retail prices index. That may well be a prudent measure to introduce in relation to businesses as well, because it would help to shelter sole traders and people operating as a start-up, who might be using the family car for business purposes as well as for personal use.

With regard to Jeremy Balfour’s point, there might also be a mechanism whereby people self-declare, in the same way as they do for car insurance, whether they are using an asset for personal or business use or a combination thereof. That might help to inform a more intelligent application of the provision for raising a statutory pledge.

That is where the key opportunities lie to further improve the bill. Labour stands ready to assist the Government in making the legislative mechanism as good as possible, so that it can achieve all the required efficiencies to ensure that the competitive position of our economy is enhanced, while also ensuring that there are no unintended consequences that could visit pretty damaging harm on people in Scotland. With that, we support the bill and look forward to considering further amendments and working constructively with the committee.

I thank Mr Carlaw for his response. I am sure that the bond markets will be listening to whatever decisions are eventually arrived at.

We can all agree that MSPs’ offices make a tangible difference to constituents and provide a vital public service. I have found that all members strive to provide a decent pay settlement for staff, but the fact is that that frontier needs to increase in line with the cost of living. Given the unprecedented cost of living crisis that we face, will the SPCB meet the GMB’s Scottish Parliament staff branch as a matter of urgency to discuss its pay proposal in good faith and to agree an appropriate award for members’ staff?

To ask the Scottish Parliamentary Corporate Body whether it will reject the annual survey of hours and earnings and average weekly earnings average of 4.2 per cent for uprating the staff cost provision in financial year 2023-24. (S6O-01610)

We again find ourselves debating the cost of living crisis. It is critical to people across Scotland and it is the most important topic of conversation, bar none. It impacts on each and every one of our constituents, regardless of their financial circumstances, but there can be no doubt that the poorest and most vulnerable will be disproportionately affected.

We have an economy that has flatlined, a Government that has run out of ideas and a UK policy landscape that takes us back to George Osborne’s austerity agenda. As we look set to embark on austerity 2.0, it is important that we consider what that will mean for our economy and our people in the years to come.

The OBR estimates that the measures that were outlined in the chancellor’s budget last week will result in a 7 per cent drop in household incomes over the next two years, culminating in the biggest fall in living standards since records began, which is six decades ago. The Organisation for Economic Co-operation and Development predicts that the British economy will contract by 0.4 per cent of gross domestic product next year and that it is already in recession. It also predicts that Russia will be the only advanced economy in the world to perform worse.

The Joseph Rowntree Foundation has issued a stark warning that, next year, some people in the UK could be up to £538 worse off than they are this year. There have also been warnings that unemployment could be about to surpass half a million by the end of 2024, with the economic and social consequences that that will have for our communities.

The worst part of it all is that we have already tried austerity economics; the Tories embarked on it in 2010 only for it to deliver flatlining growth and stagnating productivity while eroding the wages and conditions of working people. We know the human impact that it had, too. We saw it first hand in Glasgow, with recent research from the University of Glasgow and the Glasgow Centre for Population Health concluding that more than 330,000 excess deaths could be linked to the austerity programme that was pursued by the British Government during its 2010 to 2017 agenda. That is a grotesque failure of public policy that cannot be allowed to be repeated.

We are also in the, frankly, perverse situation in which those who lauded the tax-cutting, high-spending mini-budget of Truss and Kwarteng are the exact same people who are triumphantly applauding the tax-raising, austerity-imposing autumn budget of Sunak and Hunt. It is politicking at its most cynical, and voters will not forget it.

Labour has proposed a series of alternatives for our economy and a policy platform that stands in direct contrast to the one that has been outlined by the current Conservative Government. We want to see a publicly owned energy generation company, which both the Tories and the SNP have failed to implement despite having more than a decade to do it. We want to see the threshold for the top rate of income tax in Scotland dropped from £150,000 a year to £120,000 a year, which the Government has yet to agree to. We want to see a return of the mortgage to shared equity scheme, to which today’s motion refers.

For all the reasons that we have discussed—many of which I think the majority of us agree on—we need tangible action in both the short and longer term. For too long, we have looked at our economy as though we are accountants, by shifting money from one portfolio to another portfolio without any real understanding of the economic impact and the economic multiplier effect that some of our decisions have.

We need a focus on public sector investment that will produce long-term growth and innovation. It is abundantly clear that more of the same economic austerity and doom loop of decline that has been handed down to our communities for too long simply will not work. It has never worked, it will not be accepted by working people and it should not be accepted by the Parliament. It is time to say that enough is enough.

The cabinet secretary will be well aware of the wider problems that our national health service faces. Spiralling waiting times, missed targets and, indeed, impending strike action due to low pay have been routinely discussed in the chamber and are common knowledge.

Just last week, a whistleblower contacted me to express their grave concerns about the conditions that nurses and patients face at the Queen Elizabeth university hospital. They explained that nurses are

“frequently left in charge of up to 30 patients”,

and how they are forced, despite having raised concerns with management, to conduct deeply inhumane 5 am bed washes of vulnerable patients due to severe understaffing. Was the cabinet secretary aware of that prior to the press reports on Sunday? If he was, does he think that either scenario is acceptable?