Meeting of the Parliament

Meeting date: Tuesday, February 5, 2019

Official Report 1201KB pdf

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Topical Question Time

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McGill and Co Ltd (Redundancies)

To ask the Scottish Government what action it is taking to assist the Dundee-based firm McGill, which has entered administration and announced an initial 374 redundancies. (S5T-01470)

The Scottish Government is concerned that McGill and Co Ltd has gone into administration. Since being made aware of the company’s cash-flow problems, Scottish Enterprise engaged closely with it and offered it assistance with a turnaround plan. However, McGill did not provide the required financial information in time for the appropriate due diligence to be undertaken.

I also spoke with McGill’s managing director throughout the process and offered my full support. McGill responded to my offer to speak with any of its major debtors, and I spoke with the one that it asked me to on two occasions. Unfortunately, McGill’s trading situation declined, and a positive outcome was not possible.

Our partnership action for continuing employment—PACE—team was present on 1 February when McGill informed staff that it was appointing an administrator. A PACE event to support employees will be held on 7 February in Dundee. I spoke with the administrator and Unite the union yesterday. The administrator is exploring all options for a sale of the business, and Scottish Enterprise will maintain contact with the administrator and look to introduce and assist any viable interested parties.

We will continue to offer support to those employees who have been made redundant, to support them back into employment.

That is possibly the most inadequate answer that I have ever heard in the Parliament. That is not my understanding of the situation at all. I understand on very good authority from McGill that it provided all that was asked for in a timely way.

Some 450 workers will lose their jobs, and our thoughts today are with them and their families. They know, however, that this should not have happened. McGill is a company with a £40 million order book. It is profitable, but it had a cash-flow situation. It went to the Government on 9 November, in the same week in which we heard that Michelin was closing, and asked for a loan. On 30 January, 12 weeks later, Scottish Enterprise went back to McGill and said no to that £2 million loan to cover cash flow.

When Prestwick airport received £46 million of Scottish Government loans, with no indication of when they will be paid back, when Burntisland Fabrications can secure £35 million and Ferguson Marine Engineering can secure £45 million, why could McGill not get just £2 million to save 450 jobs, when Dundee is reeling from the Michelin and HM Revenue and Customs closures?

Who made the decision not to give McGill the loan? Why, given the scale of job losses in Dundee, did the minister not instruct Scottish Enterprise to make that loan available and save those jobs?

I am sorry that Ms Marra feels that the answer was inadequate. She may have thought that she had it on good authority, but my answer is entirely accurate. The issue is that McGill had no historical link with Scottish Enterprise. It is not an account managed company—the first time that it approached Scottish Enterprise or had any interaction with it was to say that it was in financial difficulty.

At that stage, Scottish Enterprise offered to support the company through funding KPMG to review the cash position and evaluate options, and it asked for a business plan. On 18 December 2018, Scottish Enterprise emphasised the need for a revised business and turnaround plan at that juncture. Unfortunately, the revised business plan did not come until some time after we were first approached and not in time for it to be given proper consideration through due diligence.

I would regret turning the issue into some form of political knockabout. At the end of her contribution, Jenny Marra said that her primary thoughts were with the workforce at this time. I hope that that would be the case for anyone in the chamber. That is exactly where my thoughts and priorities are.

Our PACE initiative has intervened quickly. We will have an event on 7 February, less than a week since the company went into administration. The task for us all now is to unite to support the workforce to get back into employment, not to engage in political knockabout on this most important issue.

This is utter complacency. PACE is for continuing in employment. Does Jamie Hepburn not realise the state of the Dundee economy? The jobs toll is running into the thousands.

Is the minister telling us that companies have to be account managed to approach Scottish Enterprise to save 450 jobs? All that McGill was told, throughout the whole process, was that it did not fit the Government’s model. The minister had 12 weeks to sort this out and to get his people in Scottish Enterprise to help McGill to save those jobs. He had 12 weeks. What kind of timescale is it when, in a commercial environment, the Government takes 12 weeks but then decides not to grant the loan? Why can millions and millions of pounds go to other parts of the country when Dundee cannot get one penny for McGill? Four hundred and fifty people are losing their jobs. The minister who failed to act should consider his position, given that utter negligence.

Ms Marra should have listened a little more closely to the answers that I gave. At no juncture did I say—and it is not the case—that a company has to be account managed if it is to approach Scottish Enterprise for assistance. The point is that, if a company has that prior engagement, it might be better placed to get earlier intervention if it is having financial difficulties. I am sure that Ms Marra understood that that was my point.

Ms Marra said that no investment is going to Dundee. We have just announced a £150 million city region deal, so the idea that we are not investing in Dundee does not bear scrutiny.

The immediate circumstances that are before us are that we have a company that, unfortunately, is not able to continue to trade, despite the best efforts of Scottish Enterprise and my officials and—let me tell Ms Marra right now—despite my best efforts in engaging directly with the company and some of its major debtors, both at my offer and at their request for intervention. Unfortunately, we have not been able to ensure that the company can sustain itself.

We will do everything that we can to get the workforce back into employment. That is our priority. We will do everything that we can to support the administrator in getting a buyer. I hope that everyone in Parliament welcomes that action and will collectively commit to it.

I think that all members acknowledge what a difficult time it is for the people who have lost their jobs at McGill, and for their families.

Yesterday, Joe FitzPatrick and I spoke to the administrator, KPMG, and received assurances that it is actively looking for a buyer for the company. It should be possible to find a buyer, given McGill’s extensive order book. Does the minister agree that that would be the best outcome for local jobs? What communication has he had with KPMG about the options?

Finally, what support can be offered to the many apprentices at McGill—I understand that there are about 75—to ensure that they can continue their apprenticeships with alternative local employers? We need to focus on the workforce and the people who absolutely need our support at the moment. I hope that the minister can give some assurances in that regard.

I thank the member and her colleague Joe FitzPatrick, who are the city’s constituency representatives in the Scottish Parliament, for taking the time to meet me earlier today, at their request. I will be happy to speak to any member who wants to speak to me about the issue.

I agree that our immediate priority is to support the workforce—we have the PACE event on 7 February—which, of course, includes apprentices. The adopt an apprentice scheme, which is administered by Skills Development Scotland, is a successful initiative whereby funding is provided to enable employers to take on an apprentice who has been made redundant, with a range of support for the employer and the apprentice. We will make every effort to ensure that apprentices are redeployed and can continue and complete their apprenticeships.

As I said, I spoke with the administrator yesterday. KPMG’s priority on Friday was, rightly, to support the workforce—that should be everyone’s priority—and we are at an early juncture in terms of the prospects going forward. Given that there is an order book, I think that we can find another buyer. We should set ourselves that task, and this Government is willing to do everything that it can to assist the administrator in that effort.

I will follow up Jenny Marra’s point. The minister indicated that there was a lack of time for due diligence to be conducted. Why was that the case if there was a 12-week process after the business first approached the Government? For what specific reasons was the request for support rejected?

As I have at least attempted to set out, there was a particular request at the time of the initial contact. There was some engagement with KPMG that was, I re-emphasise, paid for by Scottish Enterprise, not by McGill. At that stage, it was clearly indicated that a full business plan had to be made, but that was not provided until some time later. At that stage, according to the company, there was not the time for due diligence to be undertaken in the timescale in which it had to operate. That is unfortunate. If there had been time, full diligence would, of course, have been provided.

I recognise that Mr Rennie probably has constituents who are affected by what has happened—as will my colleague Graeme Dey. Mr Rennie will not have had the update from me, as I have written to the constituency representatives for the three sites and to the regional MSPs for North East Scotland, Lothian and Glasgow. I would be delighted—that is the wrong word because of the circumstances; rather, I would be very willing to provide him with an update and to send him any information that he requires in order to update his constituents accordingly.

I refer to my entry in the register of interests. I was a partner in KPMG in the past, but I have no connection with it now.

The Scottish National Party Government and the SNP-run council seem to be content to sleepwalk into a Dundee jobs crisis. It appears that the minister knew about difficulties at that vital local employer and did not act effectively. That follows the inaction on Michelin Tyre plc before its bombshell news about its intention to withdraw from Dundee. Rather than form a coherent jobs-first strategy for the city armed with early notice of difficulties at major local employers, the SNP seems to be content to cry crocodile tears after the fact. How is the minister arming the construction and manufacturing sectors in Dundee to avoid a repeat of these unfortunate circumstances?

My point about early notification has been made before. When we are in dialogue with a particular company, it will have approached us to look for our assistance. We offer every assistance that we can. There will be many situations that members will not learn about because the assistance has been successful and has allowed the company to continue. It would be entirely wrong for us to flag concerns publicly at that early juncture, because that would breach trust and cause further problems.

On support for the Dundee economy, I reiterate that the £150 million Tay cities deal will support up to 6,000 jobs and lever over £400 million into the city-region economy over the next 10 to 15 years. That is a serious commitment to Dundee and the wider area. We also have a significant pipeline of billions of pounds’ worth of investment in construction through our infrastructure investment plan, which will support the construction sector. However, with the specific circumstances with McGill, my commitment right now is to do everything that we can—and my clear effort is on that—to support the workforce, which has been badly impacted.

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Scottish Crime and Drug Enforcement Agency (Mismanagement Allegations)

To ask the Scottish Government what its response is to reported allegations of mismanagement and a cover-up at the former Scottish Crime and Drug Enforcement Agency. (S5T-01479)

Police Scotland is considering the court’s judgment, which was published on 31 January. Obviously, that is an operational matter for Police Scotland, but I will pay close attention to how it intends to respond and to members’ concerns. It is important to establish first and foremost whether the allegations are accurate and, if they are, how the circumstances surrounding them are to be scrutinised. It is also important to mention that these matters are still under active consideration by Police Scotland.

The Sunday Post has published details of an episode that sounds like a scene from “Life on Mars”. It involved chaotic filing; a stash of documents, from passports to credit cards and receipts; officers being sent to buy an incinerator and petrol; and documents taken to wasteland on the other side of the river to be disposed of before being burned in a car park. That all throws up serious questions. I appreciate that that happened in 2011, but has the Scottish Government asked anyone at Police Scotland for their version of events? Has the Scottish Government considered referring the matter for further investigation to the Police Investigations and Review Commissioner or to another police force in the United Kingdom?

I spoke to the chief constable this morning. It is fair to say that he shares that shock about the alleged practice in the SCDEA. It is important that we keep referring to these as allegations, and that we recognise that the matters that are referred to happened prior to Police Scotland’s establishment. Notwithstanding all that, the member is right to make the point that such practices would, of course, raise concerns.

It is important that I say that, under the current regime, the Investigatory Powers Commissioner’s Office provides independent and judicially led oversight of investigatory powers. Police Scotland’s most recent inspection, which took place from 17 to 21 September 2018, was led by Lord Bracadale and Lord Bonomy.

Police Scotland has the ability to appeal the judgment. It is important that we let it determine what route it intends to take. Thereafter, all the options for further scrutiny that the member has raised should be on the table.

The justice secretary said that the matter is not the responsibility of Police Scotland, but it does not sound as though it is the responsibility of anybody. Last week, two of the people who were at the top of the SCDEA announced their retirement, and it has been denied that that had anything to do with these matters. The Scottish Government has already asked Dame Elish Angiolini to look into complaint-handling investigations and misconduct issues in relation to policing, following concerns that senior officers could retire in order to avoid being the subject of misconduct allegations. Does the cabinet secretary think that those rules need to be changed?

I will do nothing to prejudge Dame Elish Angiolini’s review. When I have appeared before the Justice Committee, I have often said to the member that it is important that Dame Elish has the independence to take the review in the direction that she wishes. If the member wants to make direct representation to her on that matter, he can.

As I said, it is important to see what Police Scotland’s next moves will be. On the independent scrutiny to determine whether the allegations are accurate, I am open to listening to members’ concerns and suggestions.

As with a number of the scandals that have rocked Scottish policing in recent years, the alleged practices look to be the result of a failure of leadership and oversight at the top. The cabinet secretary talked about the current regime being more robust. Can he assure us that the practices that allegedly took place at the SCDEA would be impossible in the Police Scotland structure?

As I have said, the chief constable is absolutely shocked by the allegations. I would not expect such practices to take place in Police Scotland. It is really important to distinguish the SCDEA from Police Scotland. The alleged practices took place in 2011.

On the first part of Liam Kerr’s question, it is important that I reiterate that there is independent and judicially led oversight of investigatory powers. There is also the covert human intelligence sources code of practice. It is also important to say that, only a matter of months ago, the inspection team that was led by Lord Bracadale and Lord Bonomy carried out a routine investigation into Police Scotland’s investigatory powers and no substantial issues were raised. Notwithstanding that, as I said to Liam McArthur, it is important that we let Police Scotland decide how it will move forward in relation to this specific case. Equally, we should—I certainly will—keep an open mind on how the allegations are scrutinised.

The Sunday Post’s reports are worrying, because they reopen many of the questions about undercover policing. They also cast a shadow of doubt on the previous investigation into those issues. I heard what the cabinet secretary had to say, but surely there is a question about whether it is appropriate to leave the matter to Police Scotland. Surely we need an independent investigation into the alleged destruction of the evidence, and surely an external police force is required to do that. Does the cabinet secretary accept that now we must have a full and independent review not just of these matters, but of undercover policing as a whole, because of the questions that have been raised?

I will try to clarify matters; what I have said has perhaps been misinterpreted. I have said that Police Scotland is subject to a judgment, and it has a choice on whether to appeal it. I would not want to prejudice that court process.

I do not disagree with Liam McArthur and Daniel Johnson that, to give confidence in the scrutiny of the veracity and accuracy of the allegations, a measure of independence from Police Scotland will be needed. That can be provided through a number of routes, and Daniel Johnson has made one suggestion that should be on the table. I hope that I can clarify that nuance.

As for a public inquiry, it is worth saying that the most recent letter from the Minister of State for Policing and the Fire Service, which is from June last year, said that the Pitchford inquiry,

“under its current Terms of Reference, can receive evidence from key witnesses in relation to the tasking by English and Welsh forces of undercover officers who were also deployed outside of England and Wales.”

The serious allegations that have been made about the potential practices of English and Welsh forces in Scotland can be investigated by the Pitchford inquiry.

As I have said, Her Majesty’s inspectorate of constabulary in Scotland, which is independent, produced a report on the current structure of undercover policing. There is also independent judicially led oversight of such policing. The possible extension of the Pitchford inquiry was the subject of judicial review and that case was dismissed.

I am sorry that that is all that we have time for—we have already gone six minutes over the allocated time. I apologise to Rona Mackay, Neil Findlay and John Finnie, who all wished to ask supplementaries.