Chamber and committees

I apologise for not being in the chamber in person for what I consider an incredibly important statement. I also refer members to my entry in the register of interests, as I am a director of a company with a residual retail interest and I am a member of USDAW—the Union of Shop, Distributive and Allied Workers.

I welcome this report earnestly and I agree with the preamble that the minister has provided. I also add a really important element, which is that retail is fundamentally the interface through which people’s salaries get recycled into the productive economy. Therefore, retaining retail is vital not just for the people who are employed in the sector or for the people who obtain goods and services from it but for the whole supply chain of a productive economy.

The report is useful and it identifies the right areas, but I question whether it identifies clear and new steps to address them. First, on productivity and technology, we know that there is a significant issue especially among small retailers with regard to technology uptake. Why, then, are no new initiatives identified to provide the flexible and clear support that they need? Likewise, on skills, we need more than just an audit of skills programmes. I wonder whether the new leadership group could have been empowered to design and deploy new skills programmes that would deliver the focus and flexibility that retail employers say is currently lacking.

On town centres and place, the linkage between office workers and retail footfall is key. In the short term, will the Scottish Government undertake a public reassurance programme to encourage people to get back into offices and deliver footfall, and will that element be incorporated in future iterations of the strategy?

Finally, I reiterate the points about business rates. As we discussed in committee, the link between non-domestic rates and business performance in retail, and indeed even business rents in the retail sector, is broken. Does the Scottish Government not realise that it fundamentally needs to review that levy?

I apologise for joining the meeting late. I have been having some network issues at home, hence the cable that members can see running over my left shoulder. Indeed, I will give the short version of my speech in case I get cut off.

I agree with Jamie Halcro Johnston that this is a necessary piece of legislation. We need an overarching framework for the regulation of subsidy across the United Kingdom now that we have withdrawn from the European Union.

Jamie Halcro Johnston’s acknowledgement of the need for “clarity”, as he put it, also points to the deficiencies in the UK Government’s approach, which lacks transparency and fails to consider the devolved Governments and the arrangements that we have across the United Kingdom. In so doing, the legislation is deficient. Scottish Labour therefore cannot support it and we will vote for the motion to withhold consent at decision time this evening.

This was an opportunity to rethink subsidies and the relationship between industry, enterprise and government. Ultimately, the UK Government has failed to seize that opportunity. What is more, the plans do not target regions or sectors for subsidies, and there are no measures for subsidies to help to tackle regional inequality—the levelling up that the UK Government professes to care so much about.

The bill lacks the transparency that is needed to ensure that taxpayers’ money is spent well. The Law Society of Scotland shares the view that

“a well-functioning subsidy control regime must be based on clear rules that provide legal certainty to businesses and granting authorities”

and that the bill must implement

“a regime that is clear, proportionate and gives businesses and local authorities ... the tools to operate confidently”.

Critically, it is the lack of respect for devolution that is most troubling. We raised those concerns with Westminster, and we also note the concerns raised by the Economy and Fair Work Committee about the lack of devolved engagement and the asymmetry of power between the United Kingdom and Scottish Government. This could have been an opportunity to enhance devolution and thereby strengthen it. However, yet again, the UK Government has shown that it either does not understand devolution or just does not care about it.

In the House of Commons, Labour tabled six amendments to ensure that the devolved Administrations were given a meaningful role in the design and implementation of the new subsidy regime. Although we understand that power over UK-wide subsidies should ultimately rest with Westminster, we also recognise that it is vital that all the nations of the UK are involved in that regime. The bill fails to respect the role of the devolved nations and it does not give them a meaningful seat at the table.

We tabled an amendment that would require the secretary of state to seek the consent of the devolved Administrations before making regulations that define the terms of subsidies, including those that are deemed to be of particular interest. We believe that the devolved Administrations should be a partner in making those decisions and definitions. Those reasonable amendments were defeated, so the UK Labour Party abstained at the second reading of the bill.

We must ensure that we get this right. Poorly designed subsidies can give businesses an unfair advantage, trigger subsidy races and create a risk of international trade disputes. On the other hand, good subsidies can help to achieve policy objectives, boost regional growth and encourage research and development.

Indeed, historically, the UK has spent significantly less on subsidies than EU member states. In 2019, for example, the UK spent just 0.5 per cent of gross domestic product on subsidies, whereas France spent 0.85 per cent and Germany spent more than 1.5 per cent. On average, EU member states spend 63 per cent more of their GDP on state aid than the UK does.

Although a UK-wide system of subsidy control is needed, we are concerned that the lack of a role for the devolved Administrations under the proposed regime fatally undermines it. Labour believes that there is a need for a genuine four-nations approach. We are also concerned about the unworkable position of the UK Government having complete unilateral control over subsidies in Scotland, which flies in the face of the co-ordination that is required in our UK single market.

Although it is clear that some form of regulation is needed, the Subsidy Control Bill cannot be supported, because of its lack of transparency and because of its failure to enhance or even take account of the devolved settlement across these islands. Therefore, at decision time, we will vote with the Government to withhold consent for the bill.

Does the member have any evidence that the funding will match that from the EU, or will we just have to take on good faith what Michael Gove and others have said?

In a sense, I agree with the minister. The logic behind the new fund is confused. Indeed, the metrics and the application process are unclear. However, we have gross regional inequalities in Scotland and surely those need to be addressed even if the shared prosperity fund is not the right way to go about it.

Thank you, Presiding Officer, for arranging this opportunity to ask questions in Parliament about the strategy. Indeed, perhaps the best way of summing it up is “Better late than never.”

On the cabinet secretary’s comments about the so-called invitation to the launch, let us be clear—that invitation came at 4 o’clock on Monday and was for a time when we were in a Finance and Public Administration Committee meeting. It was not at all a credible invitation.

More important is that the cabinet secretary asked what we would remove from the strategy. I genuinely would not remove anything, but I think that there are things missing. First, it is a report that is broad in terms of its objectives; there is insufficient analysis of the deep structural problems and there is no real analysis of what would change in terms of delivery. For a strategy to be worth its name, it needs to have those things.

On the specific questions, there is a key focus on entrepreneurialism, but given that 99 per cent of firms in Scotland have seen zero productivity growth over the past decade or more, do not we need more focus on scaling up—or, rather, skilling up—existing firms rather than focusing on starting new firms, although that is also important?

I welcome the comments on reskilling but, again, what is going to change? Labour market participation is a key problem in the Scottish economy, so how will that be delivered? Will it be through existing structures and mechanisms or new ones? How will flexibility be incorporated?

In terms of the cluttered landscape, we seem to be adding new bodies—two, I think—which means that we have gone from three to seven boards and bodies, if we start from the beginning of the last parliamentary session. Audit Scotland, among others, has identified that as a key issue. How will that be resolved?

Finally, in the future, when major plans and strategies are launched, can the cabinet secretary please bring them to Parliament first, rather than bringing them first to private invitees to a private event elsewhere, so that we can ask questions here first?

Although I acknowledge what Liz Smith is saying in this debate, when Mr Gove appeared before the committee, she pursued a very interesting line of questioning about co-ordination. We have very clear goals set out in places such as the national performance framework and there is a risk that this funding is somehow out of alignment with some of those goals, so there is a need for co-ordination. Will Liz Smith reflect on that? What are her thoughts about improving the co-ordination of these funds?

The structural funds have played an important role in Scotland. Paul Sweeney set out very well why they have been important and why their replacement is long awaited.

An important point that has been missed in many contributions is that Scotland remains a country of inequalities. As Paul Sweeney pointed out, a person’s life chances and ability to earn can be very different, depending on where they live. There is a 40 per cent gap between the highest productivity rate in Scotland, in Edinburgh, and the lowest, in the Western Isles. That is not sustainable. Although I have a huge number of criticisms of what the Conservative Government has proposed, I have yet to hear a response from the Scottish Government on what it is doing to target those regional inequalities.

Ultimately, the proposed funds fall short, in terms of both how they are structured and their quantum. As Paul Sweeney pointed out, they are 40 per cent less than the EU structural funds that they replace.

I perhaps admire Murdo Fraser’s choice of tie, but that is the limit of my admiration this afternoon. What he presented was nothing short of chutzpah. Am I to take it on Michael Gove’s word, because he is a minister of the Crown, that more money is coming? According to Murdo Fraser’s remarks, apparently the Conservatives are the champions of local government and local democracy, despite the fact that they cut local authorities’ funding by 40 per cent in England. We should take no lectures from the Conservatives on local government funding whatsoever.

The most important contributions came perhaps from my colleague Rhoda Grant and Michelle Thomson. When we look at the detail of how the funds have been structured and how the indexation has been put together to come up with a system whereby the Highlands and Islands is in the same category as Buckinghamshire, we surely know that something is very wrong.

Although I very much enjoyed Michael Gove’s contribution at the committee on Thursday, what he said was very much, “This is a work in progress—don’t worry, we will look at it. Yes, I know that these measures are very narrow, but they will be improved.” As somebody put it, it was very much, “It’ll be all right on the night.”

Liz Smith accurately represents what was said, but given the significance and importance of what the funds are supposed to deliver, the fact that they are still, in essence, a work in progress is deeply troubling and exposes the flawed and, frankly, hurried nature of how they have been put together.

Along with others, I have deep concerns about the lack of co-ordination. Liz Smith put it very well in committee when she said that if there is not co-ordination on the measures that are used to look at the funds and co-ordination with other priorities, we run the very real risk of Governments making incompatible and divergent efforts. I am concerned by the eagerness of some members to draw out the constitutional arguments, but the co-ordination points are far too easily glossed over by members on the Conservative benches.

Ultimately, the debate was best summed up by Willie Rennie. Six years on, surely we should expect more. We need more clarity but, ultimately, we just want our Governments to get on and deliver. I do not think that that is too much to ask.

On a point of order, Presiding Officer. I am very grateful to you for allowing me to make this point of order. A number of members are still waiting to ask questions. Given the great discourtesy that I believe the Government has shown to the Parliament by not making a statement before now, I propose a motion without notice to extend this session under rule 8.14.3, so that we can hear the questions from those who wish to ask them.

On a point of order, Presiding Officer. Today, the Scottish Government held an event in Dundee to launch a document that sets out a 10-year economic plan. Clearly, it is intended to be a document of significance that will shape Scottish Government decision making and spending on the economy in this session of the Parliament and the next. It is convention that the Government makes statements to Parliament if matters are significant.

Presiding Officer, do you share my disappointment that the Government chose to hold an event with private invitees rather than placing the document in the Parliament and announcing it through a ministerial statement, which I believe has been done for previous strategies? Did you or the Parliamentary Bureau receive a request for such a statement to be given prior to the launch and prior to the strategy’s being published and shared with the public?