Chamber and committees

It has been interesting to listen to colleagues’ contributions, and I share many of the concerns that the Local Government, Housing and Planning Committee has raised about the inadequacies of the current national planning framework.

Planning is a great tradition in Scotland, born of the Scottish enlightenment. Urban planning was devised in Scotland, and the city of Glasgow was largely designed by the city architect John Carrick and laid out from the 1870s under the Glasgow City Improvement Trust, which set the standards for how tenement buildings might look, the datum line of streets, how wide streets would be and the sanitary conditions of the city’s public buildings. That has largely given rise to the outstanding historical character of the city of Glasgow, despite many ill-advised post-war planning decisions that the city has suffered.

Unfortunately, over the past 20 to 30 years, the previously accepted standardised design of communities—high density, sustainable and scalable—in cities such as Glasgow has been eroded and replaced by a patchwork, laissez-faire approach, where developers are largely given free rein to build whatever they see fit. A key omission from the national planning framework is a serious attempt to meet the need for rigorous and clearly prescribed urban design codes. That really needs to be more rigorously attempted in the national planning framework.

Although attempts have been made to reinstate a design code, with work being undertaken by heritage architects such as Collective Architecture and Dress for the Weather, as yet, they have failed to be adopted in Glasgow—much to the detriment of the city—or more widely in Scotland.

We also have a huge opportunity to address the climate emergency. For example, if there were to be a standardised design code for Glasgow, it would allow for the creation of standard designs of products such as air-source heat pumps and standardised ways of installing them in the city’s buildings. Instead, constituents have contacted me to express frustration about the fact that their planning applications to install such devices have been rejected by Glasgow City Council’s planning department rather than being encouraged in a constructive way. I think that the approach that is being demonstrated is short-sighted and counterproductive in the context of a twin climate and cost of living crisis, and I hope that that can be rectified swiftly through the NPF4 process.

We also need to consider our cities’ beauty and how that impacts on people’s wellbeing and sense of self-esteem. Harry Burns has often talked about the way in which the urban environment of a community impacts on people’s psychological sense of wellbeing, and that is often given scant regard in the planning process. We can consider things such as how beautiful shopfronts look. We have seen examples of outstanding best practice in Scotland, where traditional shopfront reinstatement programmes have dramatically improved the condition of high streets, yet they are seen as an isolated intervention rather than being the norm that is formalised in planning legislation. That is something that we need to learn from and rigorously adopt as part of a proper urban design code. I hope that NPF4 will examine where best practice is working well and scale it up as the baseline for policy in Scotland, rather than letting it simply be a flash in the pan.

Good work is being done in places such as Saracen Street in Possilpark in the north of Glasgow, where the Possilpark business improvement district project is working with local businesses to encourage such interventions, which are proving to be amazingly and dramatically successful. Those are the things that need to be developed as part of NPF4, rather than vague promises and vague visions.

We also need to look at sustainability. In Glasgow, for example, there are more than 76,000 pre-1919 tenements. A maintenance crunch is coming, as more than 60 per cent of those buildings are in need of urgent repairs, with a collective cost that is estimated to be in excess of £3 billion. We are not addressing that with nearly the sense of urgency that is required, and NPF4 does not do that, either. We need only look at recent crises such as that involving the Trinity tower in Park Circus, where the owners face a £3 million repair bill, which will potentially bankrupt them.

Those are just two examples of where we need to see change and more rigorous intervention. NPF4 is the best opportunity that we have had in decades to reinvigorate our great cities and towns, stitch them back together and make them more attractive and sustainable places in which to live. I hope that we are all able to work together to achieve that aim.

Mark Logan’s company, Skyscanner, was sold to Ctrip of China for £1.4 billion in 2016. That is not necessarily a success story for the Scottish economy; it reveals a major strategic weakness in companies of high-scale potential being lost to overseas ownership. What measures might the Scottish Government consider to protect Scottish start-ups through the critical growth phase? Would it consider direct measures such as the Government taking golden shares in companies to shield them from predatory overseas takeovers, or perhaps tackle a strategic weakness that Mark Logan identified by coaching a critical mass of senior executive leaders to have the confidence to keep their headquarters in Scotland through making an initial public offering of shares, rather than selling to an overseas multinational?

Will the member take an intervention?

Will the cabinet secretary give way on that point?

Today’s debate is long overdue, and I thank Mr Simpson for bringing it to the Parliament. Audit Scotland’s report is timely. The on-going saga at Ferguson’s can only be described as a national scandal. As with many of the Scottish Government’s ill-fated industrial interventions, there has been mishap after mishap since the Government took over the yard.

It all started in 2015, when ministers awarded the £97 million fixed-price contract for two ferries, despite the Government’s own procurement agency, Caledonian Maritime Assets Ltd, being hostile to the shipbuilder. Rather than there being a team Scotland national approach to re-establishing commercial shipbuilding on the Clyde, that attitude bred a toxic relationship and long-running feud, which ministers steadfastly refused to intervene in, despite direct pleas from the shipyard management to the First Minister to appoint independent arbiters. That culminated in the shipyard going into administration and a botched Government takeover, which has left the taxpayer with a £25 million exposure due to CMAL forfeiting an insurance bond with the HCC insurance company and then being successfully sued by the insurance company. When I raised the matter in June 2021, the Cabinet Secretary for Finance and the Economy claimed that I had rewritten history, saying that she could not comment on the on-going legal dispute. In January 2022, the court found in favour of the insurers and, in response to a written question about the same issue, the cabinet secretary, who had told me that I had rewritten history, accepted the point:

“The Scottish Ministers accept the summary judgement in the English court proceedings”.—[Written Answers, 28 February 2022; S6W-06586.]

The takeover was botched, and it was allowed by the failure to complete the Glen Sannox to cost, quality or schedule, meaning that it was launched in 2017 in a low state of outfit, with no bridge windows and a bulbous bow so defective that it has since had to be removed and replaced. Her sister ship, hull 802, which was planned to be launched in 2018, is still on the slipway—[Interruption.] I am sorry, but I cannot take an intervention.

There is no sign of a firm launch date in sight. Audit Scotland now estimates that the two ferries will cost £240 million, which is two and a half times the original price, and the company ran a £100 million loss in its first year of state ownership.

To add insult to that grievous injury, we now have the embarrassing situation of the contract for the two newest ferries for Scotland’s publicly owned ferry operator being awarded to a shipyard in Turkey instead of at Scotland’s publicly owned shipyard, which did not even make the final shortlist. All the while, Tim Hair, who held the job of turnaround director at Ferguson’s without a hint of irony, was pocketing £2,500 a day—more than the managing director of BAE Systems, the UK’s most successful and largest shipbuilding company.

There have been numerous changes of structure, ownership and leadership at Ferguson’s, but one thing that has remained consistent throughout is the presence of the First Minister. Her fingerprints are all over the botched takeover, all over the disputes between FMEL and CMAL and all over the ever-increasing costs to the taxpayer. It is about time that we heard some contrition on the part of the Government and an admission from the First Minister herself that she takes some personal responsibility for the mismanagement instead of claiming that her Government was somehow a white knight in what has become the single biggest public procurement disaster in Scottish history.

We all know about the failings at Ferguson’s, and those failings undoubtedly have consequences. They have consequences for island communities, which are left without lifeline ferries, for our industrial base and capabilities, and for the local communities around Inverclyde, which are left standing idly by while contracts for Scottish ferries are won by overseas competitors. It is for those reasons that we cannot simply allow Ferguson’s to continue on the path that it has been on since 2017. We need a strategy that focuses on a workforce plan, a continuous drumbeat of contracts and an ambition for shipbuilding in Scotland to be returned to its former glory as a global player.

A recent report by the Westminster all-party parliamentary group for shipbuilding and ship repair highlighted the workforce challenges facing the sector and recommended that

“a Strategic Workforce Register”

should be established to collate

“a database of individuals with interest, skills and capabilities relevant to naval shipbuilding, sustainment, and supply chain industries.”

That would give a focus to a national effort to train people up and fill the gaps, managing the workforce across different shipyards on a national basis.

Public sector contracts in Scotland alone offer a massive opportunity to anchor a continuous merchant shipbuilding programme. There are 34 vessels in the CalMac fleet, with an average lifespan of around 25 years. If Scottish shipyards were to be awarded the contracts for the entire fleet—as the Ministry of Defence does for naval shipbuilders—that would mean a drumbeat of one new vessel coming out of a Scottish shipyard every nine months. At the current replacement rate, however, it would take 87 years to renew the entire CalMac fleet, which is obviously unsustainable.

If returning shipbuilding in Scotland to its former glory was a genuine ambition of the Government, we would not be in the absurd position whereby a national asset such as Inchgreen dry dock, one of the largest in Europe and less than a mile from Ferguson Marine’s cramped and antiquated shipyard, is having its potential suppressed by its owners purely to give their Merseyside shipyard subsidiary a competitive advantage. Instead, Scottish Government ministers are lauding the creation of 100 jobs in ship scrappage at Inchgreen, many of them going to agency workers and workers on temporary contracts—at that vast facility, built with public money, which could feasibly create thousands of highly skilled, well-paid, secure shipbuilding jobs for the local community and the nation.

If we are to have any intention of unlocking our potential as a nation, Inchgreen should be subject to a compulsory purchase order and heavily invested in as a national shipbuilding asset, with Scottish firms such as Ferguson Marine, Malin Marine Services and Dales Marine Services forming the basis of a national effort to restore commercial shipbuilding at scale on the Clyde in collaboration with naval shipbuilders such as BAE Systems and Babcock International.

Fundamentally, we need to end the boom-and-bust, feast-and-famine approach to shipbuilding that has plagued Scotland for the past decade. For too long, uncertainty and incompetence have dominated the shipbuilding landscape. The approach means that there is no confidence to attract the sustained capital investment that is needed to establish world-class shipyard infrastructure and for a local supply chain ecosystem to flourish. More important, it means that there is no foundation on which to recruit and train a younger skilled workforce that would be the backbone of the industry for decades to come.

Scotland has a proud shipbuilding industry, and the shipyards on the Clyde have produced world-class vessels, but the Government’s record on shipbuilding has not filled me with confidence. It should start to listen to people who know what they are talking about and who want Scottish shipbuilding to succeed.

We will then start to turn the tide.

Lots of people are homeless in Glasgow, but 2,659 residential properties are currently vacant on a long-term basis, and hundreds of square feet of vacant commercial buildings could be converted into residential properties, if there was a will to do so. However, often, the VAT arrangements militate against that, because VAT on residential conversions and adaptions is charged at 20 per cent, whereas, for demolition and new builds, it is 0 per cent. Will the Government make representations to the Treasury to deal with that issue at source? Will the Government also consider a VAT-offsetting scheme for Scotland, so that we can move forward and get retrofitting under way at scale?

I hear the member’s point, but I do not agree with her perception or assertion. Even the Treasury Committee in the House of Commons said as much in its report on the funds, which questioned why one of the centrepieces of the Government’s levelling up ambitions was to be reduced to such an extent. The idea that there will be a complete offsetting is simply not correct.

It is not just the Treasury Committee that is calling that out. The Scottish Government, the Welsh Government, the Northern Irish Government, the Northern Powerhouse Partnership and the metro mayors are all saying the same thing, and they cannot all be incorrect. They will be worse off, and that is not acceptable.

As usual, ordinary working people will pay the price. We are already seeing gross inequalities across our country: one in four children lives in poverty; almost a quarter of all households live in fuel poverty; life expectancy in our poorest communities is now falling; and food bank use is rising. Each of those are symptoms of political choices. It beggars belief that, after 12 years of Tory austerity, the party’s failed macroeconomic policy of public disinvestment and resultant low economic growth is set to continue.

It is also true to say that the Scottish Government has been asleep at the wheel on this, too. In the SNP’s time in office, council budgets have been slashed every year. There has been a laissez-faire approach to Scotland’s economy and the productivity rate is drastically lagging behind the Organisation for Economic Co-operation and Development average. EU structural funds and regional selective assistance have been potentially misallocated and inefficiently managed through the enterprise agencies. The Scottish Government has shown a timid acceptance of Tory laissez-faire economics and has failed to develop an industrial strategy that would provide high-quality and high-paid jobs for people in every town and city across the country.

The point about council funding being absent from the Government’s motion is particularly important to the debate. We know that Scotland’s councils have borne the brunt of funding cuts: £250 million has been cut this year alone. I have concerns about the UK Government’s approach to providing funds directly to local authorities, bypassing the Scottish Government entirely.

Labour believes fundamentally in empowering local communities. That means providing them not only with adequate funding but with the powers to make their own choices. We have a devolution settlement in place, but the Tory plan quite clearly circumvents it, meaning that we simply cannot support that method of delivery.

I, too, want to touch on the issue of co-operation. We know that the Scottish and UK Governments hold colossal differences of opinion on a whole host of policy areas, but we really need them to work together in the national interest on the funding issue.

If the UK shared prosperity fund is provide the same benefits as were provided by the EU structural funds that it is replacing, I would argue that how those funds are delivered is of fundamental importance. We simply cannot have a situation in which both Governments incessantly argue, as they have done on issues such as city deals, including about who gave the money to who and what flag should appear on billboards and at construction sites. Sadly, I think that that is exactly what is about to happen. I am sure that we will be subjected to those tedious arguments during the debate. Frankly, that is not good enough.

As the Scottish Parliament information centre’s report articulates, the longer it takes the UK Government to bring in the shared prosperity fund, the more questions will be asked about any costly gaps in funding. Stakeholders and beneficiaries who may have been waiting since 2017 to know how the UK shared prosperity fund will operate are being forced to bide their time for a while more. My plea to both the Scottish and UK Governments is quite straightforward: grow up, work together in the best interests of people across Scotland and begin to match the incessant levels of facile rhetoric with tangible actions.

I move amendment S6M-03393.2, to leave out from “agrees” to end and insert:

“recognises that the UK Government’s proposed arrangements for the UK Shared Prosperity Fund circumvent the devolved settlement; notes that there are increasing regional inequalities across Scotland, including in health, child poverty, income and economic opportunities, which neither the UK Government nor the Scottish Government is adequately tackling; regrets that Scotland’s progress in closing the gap in productivity levels with the UK average has been halted during the last decade; understands that the voluntary sector has highlighted the potential loss of funding compared with previous years and has called for certainty around funding and delivery; notes that both the Scottish and UK governments have a record of centralising control and decision-making on the delivery of funding, and believes that decisions around addressing regional inequalities are best made in the regions and communities where support is needed; calls, therefore, for the Scottish Government to deliver adequate funding for local authorities, and further calls for the UK and Scottish governments to work together constructively to take the urgent action needed to address the regional inequalities in Scotland, and ensure that communities across Scotland receive the additional support and funding that they desperately need.”

The strategy describes Scotland’s desire to be

“a magnet for ... global private capital”

and foreign direct investment. On the face of it, that sounds impressive, but we know that there needs to be more critical analysis. There are two types of foreign direct investment: developmental and dependent. In Scotland’s economy, so often, we have seen companies flourish under Scottish ownership but then be able to achieve growth only through foreign takeover, which often means that capabilities are stripped out of the Scottish economy. The strategy does not offer any critical analysis of how we deal with that. There are examples from around the world of how we could tackle the issue—for example, the Scottish National Investment Bank could take anti-takeover shares in strategic firms to protect them from predatory takeovers. That is happening in the UK already; for example, with Oxford Nanopore Technologies. Could the cabinet secretary consider that as a way to improve the strategy?

The debate on the UK’s shared prosperity fund is long overdue. Since the Brexit vote in 2016, questions have frequently been asked about what would replace the EU’s structural funds. Despite repeated assurances that a replacement would appear, many of us were sceptical about whether it ever would.

Let us start on a point of consensus and welcome the fact that the detail has finally appeared. However, I fear that that is where the consensus will end, because the reality is that the detail far from matches the rhetoric that we heard in the run-up to the announcements. The rhetoric was that the UK prosperity fund would at least match the level of EU funds that it replaces; in fact, the Conservative amendment states exactly that. The reality is that it is 40 per cent less than the EU funds that it is replacing. The Treasury Committee in the House of Commons—