Meeting of the Parliament (Hybrid)

Meeting date: Tuesday, January 11, 2022

Official Report 966KB pdf

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Labour Shortages

I remind members that Covid-related measures are in place and that face coverings should be worn when moving around the chamber and across the Holyrood campus.

The next item of business is a debate on motion S6M-02740, in the name of Kate Forbes, on addressing the impacts of labour shortages on Scotland’s economy. I invite those members who wish to speak in the debate to press their request-to-speak buttons now.

15:25  

Today, I ask Parliament to agree to urgent, joint action to address the labour market challenges that we are facing as a result of Covid and Brexit. The Scottish Government has been working actively over a matter of months to resolve those challenges, but we need the help and support of this Parliament and of the United Kingdom Government.

That is why I am calling on this Parliament to support the Government’s work to protect the provision of services and the delivery of goods through our supply chains, and calling on the UK Government to commit to establishing with the Scottish Government a joint task force on labour market shortages. We need action, we need engagement from the UK Government and we need a migration system that works for Scotland.

It is clear that the UK immigration system is not meeting the needs of Scottish businesses and the wider Scottish economy. Instead of the UK Government engaging constructively with us on how to develop a system that works, we had to make 19 requests before the immigration minister was even willing to attend a meeting. There are immigration impacts on our economy, our public services and our communities. We need a commitment to genuine, on-going engagement and we need a migration policy that is tailored to Scotland’s distinct needs.

Employers across many sectors and regions of the economy are facing continued workforce challenges, and I cannot imagine that there is a single MSP in the chamber who has not come across businesses in their constituency that are directly confronted by those issues.

I quite agree that Brexit has had an impact on migration, but does the cabinet secretary not agree that, in order to address the issues fully, we need to look at the underlying factors, including workforce participation and long-term productivity, both of which pre-date Covid and Brexit?

The member makes a really important point about the structural challenges, but he cannot ignore the fact that the issues have come to a head in the past few months in particular. Over the past year, businesses in every part of the United Kingdom have faced a really significant challenge.

Just before the debate, I met the council members of the Scottish Tourism Alliance, and they cited data that shows that one of their biggest challenges both pre omicron and, probably, after it lies in being able to recruit and to trade fully as a result of having a full workforce. I will come on to specific sectoral examples.

In November, Sébastien Bazin, who is head of the Accor hotel group, was quoted in the French press as saying that the French hotel industry was on its knees due to staff shortages. Why does the Scottish Government persist in blaming such issues on Brexit when they are happening right across Europe and, indeed, right across the western world?

It is absolutely remarkable—notwithstanding that I accept that there are challenges across the world as a result of Covid—that the Conservatives want to make the situation worse by removing freedom of movement and ensuring that the solutions to some of the problems are denied to Scottish businesses. I do not understand that. That problem lies at the heart of the motion that we are debating.

In the latest published data, which is from November 2021, more than a third of Scottish businesses reported that they had experienced a shortage of workers, and the number of candidates applying for permanent jobs reached an all-time low in the same month. Almost half of businesses in the accommodation and food sector reported difficulties with filling vacancies during the period, as did more than half of construction, health and social care, transport and storage businesses.

Instead of wishing away those figures and the acute impact on businesses, I have come to the chamber to try to find solutions. One of those solutions is to ensure that we have freedom of movement and a migration system that works for Scottish businesses. [Interruption.]

Excuse me for a second, cabinet secretary. Mr Fraser, I do not know whether you wish to seek another intervention instead of intervening from a sedentary position—

I have not granted a request to intervene.

Whether she took such an intervention would be up to the cabinet secretary, not me. Please resume, cabinet secretary.

Thank you, Presiding Officer. I will continue, given that I am only two pages into my speech after four minutes.

Although some of those issues are not new, they have been severely exacerbated by the situation over the past year. Time and again, the Government argued that Brexit would be a disruptive force to Scotland’s society and economy. Two years on, that has clearly been the case, and very few would argue that it has not.

The ending of freedom of movement has made it more difficult for those sectors that have traditionally relied on European Union citizens. For many EU citizens, Brexit, together with the narrative from the UK Government, has changed their relationship with the UK.

We want to support EU citizens and to help them stay here, so we are providing information, advice and support through the stay in Scotland campaign. However, EU citizens should never have been forced to apply to retain the rights that they already had. We have explored the option of providing physical proof of status for EU citizens, but that is not within devolved powers, so we will continue to press the UK Government to provide physical proof and to safeguard the rights of EU citizens.

Will the cabinet secretary take an intervention?

I would love to, but I have made so little progress in my speech that I cannot. Perhaps I will do so later.

Although there remains strong business demand for staff across the economy, businesses continue to suffer from a low number of applicants overall, and that has further exacerbated existing pressures around shortages of materials and workers, and has amplified the mismatches between supply and demand that were caused by the pandemic.

What are we doing about that? In June, the Minister for Just Transition, Employment and Fair Work outlined how employers across a variety of sectors were struggling to recruit workers into business-critical roles. At that time, employers in food and drink manufacturing reported an unprecedented drop in the availability of workers over the first six months of 2021, while a shortage of around 76,000 heavy goods vehicle drivers across the UK meant that many supermarkets were struggling to keep their shelves well stocked. Many businesses in the accommodation and food sector also entered the busy holiday period without the number of staff that they needed in order to meet customer demand, and one in five small businesses reported that they could close or would have to radically change their business model, due to the increased difficulty in recruiting EU workers.

Therefore, over that time, we have been working with businesses and employers to develop and implement mitigation measures in response to those shortages. We have developed a working with business action plan, which identifies new and existing actions that can be taken alongside business and partners such as skills agencies. That plan aims to mitigate the impact of those shortages and to help to stimulate economic recovery through a range of employability, skills and sector-specific interventions.

That approach aligns with the national strategy for economic transformation, which will set out the Government’s plans for strengthening Scotland’s economy through national and regional action over the next 10 years. We will work with business, education providers and the enterprise and skills agencies to address sector-specific recruitment and retention challenges, including current and emerging skills and labour shortages.

As part of those measures, the Government and Skills Development Scotland are working with a range of sectors to support future workforce planning. Skills Development Scotland is working in conjunction with appointed childcare training providers to develop and deliver a taster programme in childcare for those over 25 who have been made redundant or who face the risk of redundancy, and for returners to the labour market. That will enable those individuals to apply for entry-level positions in the childcare sector, while addressing the retention and recruitment challenges that private and third sector providers face.

SDS is also working with Quality Meat Scotland on a project to encourage young people into that sector. The project aims to future proof the red meat industry by ensuring that there is a pipeline of employees who have the skills and the knowledge to provide a workforce for the industry.

To pick on another sector, through our manufacturing recovery plan we are working in collaboration with the industry, academia, business organisations and trade unions to deliver a set of targeted actions against four key priorities, one of which is skills and workforce. The national transition training funding of £1.98 million for the National Manufacturing Institute Scotland also directly supports that priority; that is in addition to the earlier establishment of the manufacturing skills academy as a key element of our £75 million investment in the institute.

We recognise how vital the manufacturing sector is, just as we recognise how important the childcare sector and the red meat industry are. They are all vital to Scotland’s recovery and just transition, and we look forward to the opening of the institute’s headquarters in the autumn.

We need to identify how to support people into key jobs. We are committed to supporting young people from all backgrounds into the labour market and ensuring that they have the right skills to succeed. The construction recovery plan recognises that a particular focus is needed on the younger workforce and getting apprentices back into work and learning.

Our work to align the young persons guarantee with sector and employer needs will open the door to more career opportunities for young people, including in sectors with current or emerging shortages. Through our summer marketing campaign, we have highlighted the diverse job opportunities that are available in the tourism sector, thereby promoting tourism as a career of choice for young people and attracting new talent. We mirrored that approach with our recent national marketing campaign, “There’s more to care than caring”, which ran from mid-November to December and showed the benefits of a career in adult social care to a younger audience.

I touch on those examples of the importance of understanding the particular issues that specific sectors face and putting in place tangible and meaningful interventions that try to resolve the issue.

Staff shortages pose significant challenges to businesses and require them to become competitive in their offer to employees. By adopting fair work principles and investing in upskilling and training, employers are developing a more sustainable and more competitive approach to recruiting and retaining workers. The Scottish Government is supporting those employers to create fairer workplaces and is promoting a sectoral approach through the Fair Work Convention’s inquiries into social care and construction and the planned inquiry into hospitality. Fair work will be central to our national strategy.

I started by outlining all the work that we are doing to tackle skills and labour shortages, but despite all that work, many businesses and employers are struggling due to the impact of the reduction in freedom of movement on labour mobility and supply, and pandemic-related disruption. The emergence of omicron has brought further challenges and insecurity for many industries and has exacerbated existing staff shortages. Although staff shortages and recruitment challenges are being recorded across all sectors, the issue is particularly pronounced in certain industries and sectors.

Cabinet secretary, could you bring your remarks to a close?

I will bring them to a close.

As I draw the debate to a close, the call, as I said at the outset, is to work across Parliament and, I hope, across Governments to bring meaningful resolution to the challenges that businesses face, because as we emerge from Covid and move into living with Covid, the issue of staff shortages will still need to be resolved.

I move,

That the Parliament recognises the resilience and innovation that employers and workers across many sectors of the economy have demonstrated throughout the last year in response to the continuation of workforce challenges associated with the pandemic, combined with reduced workforce availability as a result of the UK’s exit from the EU; believes that the Scottish Government and its agencies are committed to working with employers, business organisations and trade unions, to resolve and understand labour shortages, skills gaps and future requirements, and address recruitment and retention challenges through interventions and institutions designed to help more people into work, implementing a range of upskilling and retraining opportunities, and promoting the benefits of fair work, and calls on the UK Government to make immediate changes to its economically damaging migration policies in order to protect the provision of services and the delivery of goods through Scotland’s supply chains.

15:38  

I acknowledge at the start of the debate that Brexit has undoubtedly been responsible for some of the current issues in the labour market. Some of those issues are serious; I do not think that anyone should try to deny that or make light of the problems that have been encountered, because we all have constituents, many in rural and farming communities, who have expressed grave concerns about key aspects of the issue, including the shortage of migrant labour. I particularly cite fruit, vegetable and berry picking in my region as examples. Those people are absolutely right to state those concerns.

However, if one looks at the motion and had listened to the Scottish National Party during many debates in Parliament on the issue, one would think that Brexit was responsible for all the labour market issues, which is simply untrue. My colleague Murdo Fraser asked the cabinet secretary about the situation in France, because that is clearly not a Brexit issue.

Will the member give way on that point?

I will not give way just now.

There is plenty of evidence that demonstrates that several of the current problems existed long before Brexit or Covid. One need take only a cursory look at the evidence that has been supplied to Parliament’s Finance and Public Administration Committee by bodies including the Scottish Fiscal Commission—which is mentioned in the Labour amendment—and the Fraser of Allander Institute to recognise that there are much more deep-seated problems at stake.

Let me outline some of those problems. First, there are inherent structural weaknesses in the Scottish labour market, which have created skills shortages and insecure employment in key sectors and which, together with a higher-than-average ageing population, are creating serious challenges and impacting on the potential for stronger economic growth and long-term investment.

Those issues have been created not by Brexit but by Scottish National Party ministers, who sometimes refuse to listen to the business community and to put in place policies that will address problems. My colleagues will talk more about the detail of failures to, for example, close the skills gap, widen apprenticeship opportunities and help employers to upskill and reskill their workforce.

Will Liz Smith acknowledge that some of the structural and “deep-seated problems” that Scotland faces are the responsibility of previous Conservative Governments, which left our communities with intergenerational challenges? Does she accept that that is why we are in the position that we are in today?

If the minister cares to look at what the Scottish Fiscal Commission is saying, he will see that the greatest concern is the long-term skills gap in information technology and in technology companies. I think that I am right in saying that, according to Scottish Chambers of Commerce, some 47 per cent of employers in Scotland say that there is a lack of suitable talent for their businesses, which is detrimental to growth. That is not to do with the United Kingdom.

Secondly, there are serious productivity issues. If we track back to 2007, we will see that we have consistently lagged behind other Organisation for Economic Co-operation and Development nations, despite the SNP’s bold pledge to get Scotland into the top quartile for productivity. Sixteenth out of 37 is hardly that; we remain below the median for the OECD and the rest of the UK. That, too, has serious implications for growth.

Witnesses at the committee have flagged up that although we have the potential to improve productivity—and we do—including through our generally well-educated labour force, the SNP Government has neither taken the right approach to innovation nor offered the assistance that is required by employers that want to improve their business structures.

Members of the Scottish Government—or, which is perhaps more accurate, the SNP’s coalition partners, the Greens—should be careful about what they say in this debate. After all, their approach to oil and gas is hardly helping matters when it comes to labour market issues. I believe that, deep down, many members of the Government know that.

Then there is the issue of demographics. The Scottish Fiscal Commission and the Fraser of Allander Institute have demonstrated that Scotland’s population is ageing more quickly than the populations in other parts of the UK and in EU nations. That results in a higher rate of economic inactivity, as well as a greater social security burden on taxpayers.

The really big issue that results from the demographics is the weakness of the Scottish tax take. The net effect of current tax revenue is negative, to the tune of £190 million. Much more worrying is that we know that it is predicted that that could rise to £417 million by 2026-27. There are worrying signs for tax elasticity, too, in that regard. The decline in the working population as a percentage share of the total population is a serious issue, because the devolved tax take in Scotland, as a proportion of the total tax take, is declining. That, alongside the predicted problems to do with the need to increase social security spending, paints a picture of a very unhappy long-term outlook.

Brexit is by no means the root cause of that problem. Of course, if Brexit was the main cause, nations that are still inside the EU would not be experiencing the same problems as we are experiencing. However, they are experiencing those problems. Indeed, most developed nations are experiencing labour market shortages of various sorts.

In some ways, I agree with the point that Liz Smith is making, but does she accept that, although Brexit might not be the whole reason, it certainly exacerbates every single one of the issues that she has just set out?

If Daniel Johnson listened to the start of my speech, he heard me say exactly that. I recognise that Brexit is part of the problem. What I am saying, clearly, is that the issues do not relate only to Scotland and the UK. Other countries in the EU are having exactly the same problems as we are, so it cannot be a Brexit problem. That is the whole point—we cannot just blame the problems on Brexit when it is clear that countries that are still in the EU are having exactly the same problems. My colleagues will set out some of the things that we can do about that, and the policy commitments that we ought to be putting in place.

However, I finish by saying that there are, in the Scottish economy, long-term structural issues that predate Brexit and Covid by many years, so Brexit and Covid cannot be held responsible for them. That is a serious message from every single economic forecaster that we care to listen to. The cabinet secretary needs to listen to them.

I move amendment S6M-02740.1, to leave out from “reduced workforce” to end and insert:

“global supply chain issues and shortages of workers in some key sectors of the economy, and further recognises that there are serious and long-term structural issues within the Scottish economy, as shown by recent evidence presented by economic forecast groups, and that these must be addressed with more focussed Scottish Government policies targeted at reducing the skills gap, at improving productivity and stimulating economic growth.”

15:45  

It is a pleasure to open the debate for the Labour Party.

It is impossible not to see the impact that labour shortages have had on the Scottish economy. That was clear from the cabinet secretary’s speech. We see it in our supermarkets, at the petrol pumps and in many other scenarios that we encounter daily. I start on that point of consensus.

The Scottish Government refers to the impact of exiting the EU on labour supply and calls on the UK Government to scrap its “damaging migration policies”. I whole-heartedly agree. Brexit is a causal factor in the labour shortages that we are experiencing, and they will undoubtedly be exacerbated by the—frankly—risible and harmful attitude to immigration that dominates Tory thinking. It is telling that the Conservatives would, despite the Conservative spokesperson’s conciliatory language, remove any mention of Brexit with their amendment. I find that troubling, given that the Conservatives have just admitted that Brexit is a major issue with which we have to contend. Although Brexit is, undoubtedly, a crucial factor, it is not the only factor. That much I agree with.

The pandemic has exposed the underlying vulnerability and fragility of the Scottish economy. Although the pandemic has exposed fragilities, they are, in part, caused by the underlying lack of an industrial strategy—one that underpins upskilling, increases productivity and makes strategic public investments.

It is also just not credible for the Scottish Government to blame that challenge entirely on Brexit. For 15 years, the Scottish Government has been in power, and for 15 years we have had a slow erosion of Scottish economic sovereignty. Domestic ownership of industry has steadily decreased and there have been low business start-up rates. Predatory foreign investment has dramatically increased, at the expense of public investment, and there has been complete overreliance on imported labour that is largely low skilled and un-unionised, thereby generally exerting more downward pressure on wages.

We have had warnings from the Scottish Fiscal Commission that illustrate the scale of the challenge that faces the Scottish economy as a result of the pandemic. As a country, we have lagged behind the rest of the UK on pay-as-you-earn tax, employment, pay growth and labour market participation. Employment has been growing more slowly in Scotland than it has in the rest of the UK. In Scotland, the number of employees per head of population has grown by just 0.6 percent compared with growth of 2.3 per cent in the rest of the UK.

Some of my colleagues will elaborate on other challenges that are facing the Scottish economy, particularly in relation to productivity, and on the inequalities that are observable across many sectors of industry.

Many members in the chamber, across all parties, would agree about many of the symptoms over past decades that Paul Sweeney has diagnosed in the Scottish economy. Would he accept that many employment and economic levers are not the responsibility of this Parliament, and that we should, therefore, try to get those levers transferred to Holyrood so that we can do something about the challenges that he outlines?

I would like to focus very much on what it is in the grasp of this Parliament to achieve. I will focus particularly on the skills gap, on which, I am sure, we can find some consensus.

In the past 15 years of this Government, there has been a steady decline in Scottish employees receiving job-related training. Persistent sector-specific skills gaps, some of which were referred to in earlier speeches, are becoming increasingly prevalent. That is not just my partisan assertion. In June 2020, the Scottish Government’s own advisory group on economic recovery stated that

“there are persistent skills shortages sitting alongside graduate under-employment.”

It is hardly surprising, therefore, that upskilling and skills development have fallen by the wayside under this Government.

Just before Christmas, the budget revealed further cuts to Skills Development Scotland—more than £5 million has been cut from its budget. Some £10 million has been cut from the employability and skills budget. There has been a real-terms cut to the education and skills budget.

Our colleges, which should be the engine room of a resilient, adaptable and highly skilled workforce, face similar financial pressure. I was speaking about that to Glasgow Kelvin College only yesterday. It is concerned that new skills training funding is tied up by bureaucratic red tape and cannot be drawn down to meet the challenges that the college faces daily, including redesigning its provision of tailored training for local businesses and industries and getting people reskilled and into the workforce. The college is also finding it very difficult to keep people in training programmes because of the domestic pressures that they face due to lockdown restrictions.

It is quite straightforward: we cannot build a motivated, skilled and productive workforce on the cheap, a flourishing industry through neglect, or resilient economic growth through complacency. Our amendment attempts to address some of the issues. It urges the Scottish Government to provide a robust industrial strategy that is fit for the 21st century, for which I have been advocating for nearly a decade.

Our amendment recognises the need to address the gross inequalities that arise as a result of low pay, poor conditions and a failure to fully utilise fair work practices, which are all entirely within the remit of the Scottish Government. Finally, it urges the Government to fundamentally reconsider its relationship with employers, business organisations, trade unions, colleges and universities.

For far too long, we have been content with our public sector and its development agencies being passive and investing public money as a last resort. I know about that because I worked for Scottish Enterprise for two years. I have personally seen Scottish Enterprise’s weaknesses as an organisation, despite the great people who work for it. That has resulted in numerous failed industrial interventions, such as at Ferguson Marine in Port Glasgow, the Caley railway works in Springburn and, most recently, Prestwick airport. Why are we hesitant to use the power of the state to improve the lives of people across our country and to bolster our economy?

We need a shift towards a far more entrepreneurial state that makes proactive investments and sees such investment as an opportunity to improve people’s quality of life and to further their potential, and as a way to seed economic sovereignty in Scotland.

I urge colleagues across the chamber to support our amendment. It would refocus our collective efforts to address the skills gap, to increase productivity and to make investment-led growth our fundamental and singular economic priority.

I move amendment S6M-02740.2, to leave out from “believes” to “fair work” and insert:

“notes the finding from the Scottish Fiscal Commission that Scotland’s economy is lagging behind the rest of the UK, partly due to factors that predate the COVID-19 pandemic, such as declining labour market participation, weak investment in productivity and insufficient flexibility in skills development; considers that building a more sustainable and resilient economy will require an industrial strategy that addresses regional inequalities, low pay and poor conditions, and the skills gaps across Scotland; believes that the Scottish Government and its agencies must do more work with employers, business organisations, trade unions, colleges and universities to address recruitment and retention, promote fair work and offer more flexibility in reskilling opportunities for workers”.

Willie Rennie is joining us remotely.

15:52  

I am a bit of a Euro fanatic, but even I accept that the workforce shortages are not just because of Brexit. The Conservative Government would do well to listen to the more balanced approach taken by Liz Smith today—Brexit has certainly made the situation worse. However, the SNP should not hide behind Brexit or the pandemic, because the deep-rooted problems have been mounting for years.

First, I will focus on immigration policy, which is preventing industries from recovering from the pandemic. [Inaudible.]—plain and simple. It has deprived British businesses of the workforce that they need to rebuild the economy: the lorry drivers to supply our shops and supermarkets, and the workers for our care homes, farms and the hospitality sector.

Let us take my favourite subject: the berry fields of Fife. The new growing techniques demand more workers for longer periods. The sector has tried to recruit locally, but there are just not enough people locally for them to recruit. It needs a bigger seasonal workers scheme that works. It is not just the farms: the seasonal workers scheme needs to be extended to cover companies such as Kettle Produce, which supplies supermarkets across the country.

The hit on the fruit and vegetable sector in Fife alone stretches to millions of pounds, and that is just for this year. The rotting berries and the veg left in the fields this year is something that is unlikely to be repeated next year because the farmers will not invest in the crop unless they have guarantees that they will have the workforce, and they have not been given those guarantees. The pleas for a bigger seasonal workers scheme have been ignored by the UK Government. To limit the scheme to 30,000 visas—half of what is required—is bad enough, but for that to be tapered down from next year is utterly reckless.

The Conservative Government should be honest with businesses that it is prepared to accept casualties and business failures, that Scotland will produce and process less of its food, and that it no longer cares about food security, but the sleekit way that it is going about things shows that the Conservatives are obsessed with immigration policy rather than standing up for the economy and businesses.

On a wider basis, we need to get rid of the arbitrary salary threshold of £25,000, which does not recognise unskilled workers as key workers who should be valued. We need the youth mobility scheme to be extended to EU citizens, as well as a 12-month visa for the food and drink supply chain, and we must allow employers to recruit the workers that they need in order to get us out of this crisis.

It is positive that care workers are to be added to the Home Office’s shortage occupations list, but that is too late and too timid. The Conservative Government needs to think again and, with immediate effect, offer a three-year visa for carers.

However, the Scottish Government also bears some responsibility for our current predicament in social care. The problems have been brewing for years, since well before Brexit, and that is, in large part, because the SNP Government will not fund social care sufficiently so that we can give decent wages to carers. The social care sector is on its knees. People are waiting in hospital and at home without the care packages that they need. The reason for that is pure and simple: the SNP has been taking carers for granted for far too long.

The Scottish Fiscal Commission has found that Scotland’s economy is

“lagging behind the rest of the UK”

because of

“declining labour market participation, weak investment in productivity and insufficient flexibility in skills development”.

Those long-running issues were evident long before the pandemic and long before—[Inaudible.]—Brexit. It is right that we need

“an industrial strategy that addresses regional inequalities, low pay and poor conditions, and the skills gaps”.

That is why we are going to support—[Inaudible.]—because it takes out any reference to Brexit.

Immigration is a challenge that we must—

Mr Rennie, could you bring your remarks to a close?

I am just finishing.

We are struggling because the sound system is breaking down, so please conclude.

[Inaudible.] All of that is about the longer-term health of our economy.

Mr Rennie, I am afraid that we will have to stop you there. I apologise, but something is going wrong with the sound system. That has been happening, to an extent, during the rest of your remarks but, fortunately, we managed to get most of your contribution.

Before we move to the open debate, I remind all members who wish to speak to press their request-to-speak button now—the person I am looking at is not looking at me.

Michelle Thomson is joining us remotely.

15:58  

I will watch with interest how the Opposition parties, despite their softer stance today, vote on the motion, which focuses on Scottish business, its employees, growing the jobs market and developing the wider economy.

I have some sympathy for the calls from the Labour Party in Scotland for an industrial strategy, and I look forward with interest to hearing how Labour will protect economic development in the light of the threats that are posed by the United Kingdom Internal Market Act 2020 and the Subsidy Control Bill, because Labour’s answer is always that Westminster knows best.

The Tory amendment, despite the undoubtedly well-intentioned acknowledgement from Liz Smith, fundamentally seeks to remove the wording regarding the impact of Brexit on Scottish business and ignores the problems that have been created by Tory policies on immigration. I gently warn the Scottish Tories that they will not be forgiven for sitting supine and soporific as they allow the charlatan who is their leader, Boris Johnson, to inflict that damage.

I will focus on two main areas today, and the first is international competitiveness. I want Scotland to be a leading international player in a number of areas, particularly those that support our net zero ambitions such as developing the hydrogen economy.

We want to be at the top of the food chain in selected emerging technologies, with a higher-wage and higher-skilled economy than there is at the present time. I welcome the Scottish Government’s commitment to invest an additional £500 million over this parliamentary session for new, good green jobs. However, the consequences of Brexit and, in particular, the deliberate choice of the UK Government in restricting access to labour from Europe present a severe threat to many businesses, not least, as others have mentioned, hospitality, construction and tourism businesses, including those that export and those in new technologies. Surely all MSPs across the parties can add their voice to those of the multiple organisations—such as the Federation of Small Businesses, the Convention of Scottish Local Authorities and the Royal Society of Edinburgh—that support the call from the Scottish Government for new temporary worker routes.

Brexit harms our productivity, and we can all agree that both Scottish and UK productivity needs to be better. Critically, Brexit reduces the available working-age labour market pool precisely at a time of emerging skills gaps. If we are to be internationally competitive, we need to be able to attract the highly skilled to Scotland as well as train our own population to the highest standards.

My second area of concern relates to how best to serve our international-class businesses across a variety of sectors. In my Falkirk East constituency, that includes businesses such as Piramal Pharma Solutions and Fujifilm. They are reliant on access to high-quality skills development for their staff to ensure that they maintain their competitive edge and that they can continually improve their productivity.

I have previously spoken about the need to pursue excellence, as it is called for by the likes of the Cumberford-Little report, which was authored at the behest of the Scottish Government by the principals of Edinburgh College and the City of Glasgow College and was supported widely across the college sector. They invite us to move beyond competence and to drive up standards in pursuit of excellence. They are not alone; the Scottish director of WorldSkills has made similar calls. We need to heed their calls to ensure that our businesses and their employees have access to the skills that are needed to remain internationally competitive.

I fully support the actions of the Scottish Government, and I hope that it agrees that combined action to mitigate the clear damage that is being done by Brexit and to strive for excellence in skills is part of the way forward for Scotland.

16:02  

I agree with the cabinet secretary that the issue of labour shortages in key sectors of our economy is a serious one, and it deserves a proper debate. However, it is disappointing—although perhaps not surprising—that, despite five and a half years having passed since the Brexit vote, the SNP continues to pin most of the blame on Brexit rather than acknowledging its own failings on the issue and the fact that labour shortages are a global problem. We may be in a new year and looking to the future, but it is clear that the SNP is looking to the past and focusing on old grievances.

As Liz Smith and others have pointed out, the issue is complex and multifactorial. It cannot be attributed to one reason alone. That is not to say that Brexit has not played some part—it has—but I have made the point in debates in the past that labour shortages across various sectors existed long before Brexit. This morning, I spoke to workers in the maritime sector, who talked about recruitment and retention. There was no mention of Brexit at all.

It is undoubtedly true that the pandemic has played a major role in exacerbating the problem. That is on top of the many pre-existing issues that have resulted in labour shortages in different countries and across different sectors across the world. The OECD noted in “International Migration Outlook 2021” that changes to Covid rules are preventing the settling of labour markets, and that has resulted in a 30 per cent drop in migration to countries worldwide. We should use this debate to examine those deep-rooted problems and do what we can to resolve them.

We know that there is a global crisis and that countries as diverse as America, Australia and China are experiencing labour shortages. The EU faces similar challenges. As Deloitte noted last year:

“The heightened risk of contracting COVID-19 has made certain jobs riskier than others—and employers”

in those industries

“find it more challenging to attract workers at prepandemic pay rates”,

with industries such as the hospitality industry particularly impacted.

Domestically, there are fears that Scotland will experience a massive worker shortage by 2030. The think tank IPPR Scotland has estimated that, by that date, we are likely to have a gap of 410,000 workers. That is hugely concerning, and we face a significant challenge, but the Scottish Government has to play a role in preventing those scenarios from playing out in the long term. The Scottish Chambers of Commerce made an interesting point when it talked about firms being worried about the skills of the candidates who are coming forward, not simply the lack of candidates. There is a distinction to be made between a skills shortage and a labour shortage, and that is particularly significant.

Will the member give way?

I would normally do so, but I have a very short time in which to speak.

The Chartered Institute of Personnel and Development’s report on “Addressing skills and labour shortages post-Brexit” notes

“that apprenticeships could play a stronger role in addressing labour shortages”,

and that

“Improving the supply of apprentices is an urgent priority given the severe disruption to apprenticeship activity last year.”

The Scottish Conservatives agree with that, which is why, in April last year, we outlined proposals for unlimited demand-led apprenticeships that would be based on employers’ needs. We also called for the creation of a £500 right-to-retrain account for every Scottish adult, which would give people the ability to retrain and upskill to enable them to be more competitive in a modern workforce. If ever there was a moment to turbo-charge the skills agenda and focus on reskilling and upskilling, this is it.

Those are some of the Scottish Conservatives’ solutions to resolving the issue of labour shortages in our economy, but we stand ready to support any meaningful measure that will help to reduce the skills gap and create economic growth to the benefit of the people of Scotland.

16:06  

I begin by welcoming the fact that there is one part of the motion that neither of the amendments seeks to delete or alter: the recognition of the “resilience and innovation” shown by employers and workers across the country, and across many sectors of the economy, in the face of the most incredible challenges as a consequence of the global pandemic.

Unfortunately, however, the unanimity does not last long, because the Tory amendment clearly tries to airbrush out the role of Brexit. I congratulate Liz Smith on accepting that point. She is clearly speaking to the same people to whom I am speaking in my constituency of Perthshire South and Kinross-shire, and she is hearing from the hospitality industry, the butchery business and the soft fruits sector.

Liz Smith also talked about the long-term structural challenges. I accept that there are such challenges in Scotland, but they predate devolution, going back to the Thatcher years, when she decimated whole communities throughout Scotland. We are still living with the effects of that to this day. I have previously told members about my discussions with the Gleneagles hotel, Crieff Hydro and Simon Howie Butchers, which are three extremely important businesses in my constituency. They have made it clear to me that, in order to operate at full capacity, they need to address a staffing shortfall of up to 25 per cent, and they have to be able to recruit beyond our borders to do so. I wrote on their behalf to the UK Government, but the reply was firmly negative. It is not that the UK Government does not get or know what the problems are or what is needed to address them; it is simply choosing not to hear about or help with those problems, and it is refusing to take responsibility for them.

The problems might be inevitable consequences of the pandemic situation in which we now find ourselves, but they were not unavoidable. They are the consequence of decisions that were knowingly taken by the Conservative Party and the UK Government. The choices that they made and the decisions that they took have left us where we are now. It is not only that they chose to rip Scotland out of the EU, despite the overwhelmingly expressed view of the Scottish people that that should not happen, or that they chose to embark on a harder Brexit than those who put the leave case said would happen. It is the fact that, when the country was careering towards a hard Brexit cliff edge, they chose not to apply the brakes, even when something totally unexpected hit. Nobody knew that we were going to face a global pandemic, but that decision has made it extremely tough for many sectors of the economy, who have had to deal with a double whammy.

As James Withers of Scotland Food & Drink wrote in August on Twitter,

“Brexit has been an enormous shock to the labour market; a Brexit implemented in the middle of a pandemic, when supply chains were already straining.”

I know that all other members will have received the same NFU Scotland briefing as I did in advance of the debate. Willie Rennie talked about it earlier. One does not have to have a farming background to understand the grim picture that the NFU paints. To put it simply, there are farmers who are not going to plant this year because they cannot guarantee a labour force for next year. The labour shortages in 2021 meant that those farmers lost huge amounts of money. That is the start of a vicious circle if they are not able to plant for next year.

It is not just farming that is affected, but food and hospitality. Bus companies are cutting services because they simply cannot recruit enough drivers. If we look at the shortage of heavy goods vehicle drivers, we see that the problem is not just the ending of freedom of movement with our leaving the European Union or employers’ aversion to the extra paperwork that is now needed. The UK Government has deliberately created a toxic environment for immigration across the board, and this country needs immigration.

Will the member take an intervention?

I will, yes.

The member is just about to wind up. Very briefly, Ms White.

I will be very quick. Thank you for taking my intervention—

Please speak into the microphone.

Does the member agree that there is an issue with HGV drivers not just in Scotland and the UK, but across Europe as a whole?

Yes, I absolutely agree that there is an issue across the whole of Europe, but why make things harder by introducing a hard Brexit?

As I am to come to the end of my speech, I will move on quickly. More and more people are coming to recognise that it is only through this country of ours having the normal powers of a nation that we can take the decisions that our people need. This debate underlines the importance of securing our independence and engaging properly with the people and countries of the world.

16:11  

Colleagues from all parties are rightly raising the real business concerns across Scotland, which have made been made worse not only by Brexit, but by Covid-19.

I thank the Food and Drink Federation Scotland for its helpful briefing for today’s debate, which notes that we have now reached crisis point, with the growth and viability of businesses in danger, and knock-on impacts for consumers, with high food price inflation. The briefing also highlights that, in a survey carried out last August, 97 per cent of businesses said that they would struggle to fill vacancies in the future. That shocking statistic highlights just how dire the situation is.

However, as several colleagues have said today, labour shortages have multiple causes. We cannot blame just Covid or Brexit. Those are key aspects, but they are not the whole story. Many of the factors that are driving failures in the Scottish economy predate the pandemic and have gone unaddressed during the Scottish National Party’s entire time in office. We are also lagging behind the rest of the UK.

As Paul Sweeney eloquently noted, before Covid, Scotland’s economy had been suffering from low investment and productivity, limited local and community ownership and increasing inequalities in our labour market for more than a decade. Scottish Labour has previously called on the Scottish Government to work with the UK Government to create a flexible visa scheme. We are not asking it to reinvent the wheel, but it is time to look at the steps that we took in the past. We should learn from the experience of the fresh talent initiative that was introduced during the regime of Jack McConnell, the former First Minister. However, it is also clear that, although we need flexibility, we cannot rely totally on imported labour. We must also look at the home-grown crisis.

I want to raise the issues of fair work and childcare, in particular. Labour’s amendment highlights the need for an

“industrial strategy that addresses regional inequalities, low pay ... poor conditions, and the skills gaps”

that we have across Scotland.

There has been a steady decline in the number of employees in Scotland receiving job-related training during the past 15 years, and slow wage rises are also reflected in poverty data. The data for 2015 to 2018 show that, after housing costs, 60 per cent of working-age adults living in relative poverty lived in working households. That is the highest percentage on record.

In-work poverty is also a major driver of child poverty, with the proportion of children living in relative poverty also rising. That is before we take into account recent food and fuel cost rises.

Let us look at gender inequalities. In 2018, the gap between employment rates of women and men in the workforce was nearly 8 per cent; between disabled and non-disabled people, it was nearly 36 per cent; and between white people and people from ethnic minority groups, it was nearly 20 per cent, which is the largest gap on record.

We have deep-seated inequalities in our labour market and in our communities that must be addressed with targeted action, not with headline grabbing or empty statements. That means making training available, not cutting skills development budgets. It means making childcare accessible and affordable to parents, particularly for women in the community, so that they can access jobs knowing that they can turn up to work and that they will be paid enough to support their family and pay their bills.

We need to tackle the deep-seated inequalities and provide adjustments and support for disabled people across the workforce. To tackle such inequalities in our communities, we need Government investment in jobs and training at the national or local level. We need to work with businesses and trade unions and, as we recover from Covid, we need to use procurement policies to provide more attractive employment that pays people enough to live on and offers training and career development opportunities. When we bang our desks relentlessly in relation to care, we just need to look at the number of people who are not getting care support because working in care is unattractive and does not pay well—people cannot support their families on the poor wages that are paid.

All those deep-seated inequalities need to be tackled. In coming out of Covid, we need to find a process that gets people into work that they can live on. That must be the priority in tackling our labour inequalities.

16:15  

The past few years have been difficult for business, with the on-going pandemic and our departure from the EU. My background is of 20 years in the banking sector and a further five years in the development sector, and I have also been a councillor for 15 years. I have spoken to hundreds of businesses all over my county in the past year or so. In all my time engaging with businesses, the clear feedback has been that this has been the most difficult period that they have ever faced for recruiting staff.

I will focus on a few key areas of the economy in East Lothian and on the impact that labour shortages are having on them. In food and drink, East Lothian led the way with the first-ever sector-based business improvement district in Scotland. Along with East Lothian Council, Queen Margaret University has announced a food and drink innovation centre, which will be funded in partnership through the Edinburgh and south-east Scotland city region deal.

Food and drink is Scotland’s largest manufacturing sector. It employs 44,000 people, contributes £3.6 billion in gross value added to the economy and has a turnover of more than £10 billion. Skills Development Scotland forecasts predict that Scottish food and drink manufacturing will need 8,700 new recruits between now and 2031.

In East Lothian, we have fabulous names such as Belhaven Brewery, Glenkinchie distillery, Luca ice creams, Winton Brewery and Thistly Cross Cider. Members who have not tried any of their products should try them. All those companies are struggling to recruit staff. In recent discussions that I have had with it, East Lothian Food and Drink has said that its members have been impacted by withdrawal from the EU—that relates to the supply chain, export opportunities and of course labour shortages.

East Lothian has about 200 farms. In 2021, labour shortages were a major issue. We are in discussions with the NFU about the new skills strategy that it is looking at. Labour shortages meant that some farmers lost their harvests. Farmers are making decisions now and there is a danger that, if labour shortages remain, many will move away from sectors that are important to the economy, such as soft fruit.

Farmers previously had the ability to employ as many EU workers as possible. The NFU briefing says that research shows that its members had a labour shortage of about 22 per cent this year. A key point is that the retention rate for EU workers was more than 80 per cent. Willie Rennie was right to say that visa numbers have been restricted to 30,000 in the past year. The NFU predicts that about 60,000 visas are needed.

Changes are required to the immigration system to address the acute labour market shortages that are being faced in multiple sectors of our economy and in the public sector. The Scottish Government gave warnings about that. The UK Government could make changes. As has been said, the CIPD is calling on the UK Government to

“establish a temporary job mobility scheme for young EU nationals to act as a ‘safety valve’ to ease immediate, acute labour shortages”,

which apply across the UK, Scotland and Europe. As a few speakers have said, the Scottish Government is calling on the UK Government to immediately introduce a new temporary worker route to address acute labour shortages.

East Lothian has recruitment issues in hospitality and social care—Sarah Boyack mentioned that—and in construction, food production, agriculture and tourism, which is an important sector in the county. Changes could be implemented immediately, and it is really important for workers to be able to switch to other visa routes once they are in the country and have employment.

Scottish ministers and the Scottish Parliament are best placed to decide how to accommodate our distinct labour market needs. We must also be cognisant of the opportunities that the growth of renewables brings to Scotland, and we need to prepare workforce planning strategies by working with the sector.

The impact of the UK’s immigration policy confirms the need for a tailored approach to migration in Scotland. The Scottish Government’s proposals are widely supported among key stakeholders such as the FSB, COSLA, the Scottish Council for Development and Industry and the Scottish Tourism Alliance.

As the cabinet secretary said, the Scottish Government is working with business organisations to develop a working with businesses action plan. It will engage with education providers and enterprise and skills agencies, as well as local authorities, to address sector-specific recruitment and retention challenges.

The best way to tackle the issue is to put Scotland’s future in our own hands. That is the only way to have a migration policy that is fit for purpose.

16:20  

The past 21 months has taught us much about resilience: our resilience, or otherwise, as human beings, and the resilience, or otherwise, of the systems and structures that support us. We have had some uncomfortable truths laid bare, too. Our economy does not currently support everyone in the way that it should, our politics often fails to provide security and safety to everyone, and our society is profoundly unequal. As we plan and develop an economy that is robust in the face of future shocks, while supporting individuals and communities equitably and fairly, we must address at least two significant issues, both of which speak directly to addressing the problem of labour shortages in different parts of our economy.

First, we must make work fair. I do not disagree with the calls from Labour for a focus on fair work. We must all work with employers and trade unions to secure genuine improvements in pay and conditions. We must address low pay, in-work poverty, poor flexibility and inequalities in the workplace. No worker should suffer precarious contracts. We need better sick pay; Covid has made that very clear. We need strong trade unions with real bargaining power. I remain disappointed that it was Labour, back in 2014, during the Smith commission, that vetoed the devolution of employment law.

However, there are things that we can do, and have started to do, in Scotland. I believe that our social security system will support people better. I just wish that we had the powers to introduce things such as a universal basic income—but we will have them, one day. We need to ensure that all workers have access to the training and development opportunities that they want and need, both to deal with issues such as the much-needed just transition to renewable energy and to allow workers to adapt and be flexible as technological innovations and automation remove some aspects of their roles.

Secondly, we must have the right data and information about the things that we need to understand, and we must use that to plan effectively. We must better understand the differences and intersections between skills shortages and labour gaps. We must also better understand workers’ expectations about their employment, how things vary geographically and regionally, what impacts demographic changes will have and so on. We need institutions and organisations that understand those data and can turn them into effective planning and actions. For example, we have known for many years about the challenges that we face in social care due to demographic shifts, yet we have not always effectively planned for those changes and challenges. Similarly, we know that our future economy will be reliant on jobs in green industries, so we must ensure, now, that we provide the right education, training and skills development for people to fill those jobs.

However, it is not just about having the people with the right skills. Our planning must take account of other issues, too: where people will live, where their children will go to school, where they will be able to access healthcare, and so on. We hear, time and again, across different sectors, that the limiting factor for recruitment is affordable housing. In addition, there will be shifts and shocks in the future that we still need to properly identify. That is why we should explore the creation of a foresighting centre—one of the recommendations of the Royal Society of Edinburgh’s Post-Covid-19 Futures Commission—to provide an important contribution to the industrial strategies of the future.

There are many more issues that I would want to address in the debate, but I will make my final point about immigration. It seems to me that, for many Conservatives, Brexit was about stopping the world so that they could get off, but they dragged us off, too. With the other awful immigration changes that we see coming at us from Westminster, I urge all those in the chamber with any influence in the UK Government to press this point wherever possible: Scotland deserves so much better than Westminster is currently providing.

16:24  

We all know the impact of the pandemic on the economy, but in recent months the labour shortage has become more and more obvious, with understaffed hotels and restaurants, empty supermarket shelves and fuel tankers with no one to drive them. As we recover, it is important that we recognise the labour and skills shortages that we are seeing and understand the causes.

Government must take the right action to resolve those challenges. We are seeing just how reckless it was for the UK Government to press ahead with a hard Brexit in the middle of a pandemic. Long before Covid, the Scottish Government, businesses and trade unions were telling the UK Government that a hard Brexit would have a major impact on the economy, including labour shortages. When Covid struck, it was clear that, at the very least, the reasonable thing to do would be to delay a hard Brexit. Instead, the UK Government carried on.

The Tories should surely have foreseen the consequences of adding another 500 million people to their hostile environment policy on migration. The UK Government’s points-based approach to migration does not value the right things, and it has not considered the needs of public services and private businesses. It has fixated on high salaries, rather than the skills and social value of workers. The introduction of short-term visas for HGV and poultry workers was not only embarrassing but, more seriously, a symptom of a broken immigration system. If the Tories cannot create an immigration system that works for Scotland in key business sectors, they should devolve the powers now, so that this Parliament can take those important decisions.

With the powers that it has, the Scottish Government is working with businesses to develop action plans, promote fair work and address sector-specific recruitment challenges. SNP policies, such as the young persons guarantee, will support the next generation by creating more opportunities to work, study or undertake training. Through its Covid recovery strategy, the Scottish Government will also deliver an additional £500 million to support new green jobs and equip people with the skills to work and progress in those jobs. That combination of working to improve things now and laying the groundwork for a better future is crucial.

It is a tale of two Governments with very different visions. It is not only my colleagues and me who are sick of the UK Government; industry is fed up with it, too. Perhaps the Tories have just given up on pretending that everything is good in Brexit Britain. Food and Drink Federation Scotland said that it contacted the UK and Scottish Governments with its demands for support for that vital sector. To date, only the Scottish Government has responded, with Mairi Gougeon reaffirming her commitment to promote and support the sector.

The labour and skills shortages that we are all experiencing demonstrate the recklessness of pursuing a hard Brexit in the middle of a pandemic. Within its powers, the Scottish Government is working hard to support business recovery, promote fair work and boost skills. The upcoming 10-year national strategy will drive Scotland’s economic transformation as we recover from the pandemic. The young persons guarantee will equip our young people with new skills so that they can flourish.

Migration is also part of the solution—

You need to wind up now, Ms Stevenson.

The UK Government must face reality and take a rational approach before the damage to our economy and communities increases. If it does not do so, it should devolve the powers now, so that this Parliament can.

16:28  

On a point of order, Presiding Officer. At the start of her speech, the cabinet secretary said that she was drawing the debate to a close. Hopefully, that was a mistake and it does not mean that the Parliament is not working and there is no debate today. I wanted to put that on record.

That is certainly not a point of order. I would be grateful if you would continue with your speech, Ms White.

As we continue to navigate our way through the Covid-19 pandemic, the blunt truth is that most developed economies are grappling with labour shortages. The pandemic and associated public health responses have had a profound impact on workforces and working practices. That is not unique to Scotland or the UK; business leaders and policy makers around the world are assessing which levers to pull to remedy the situation as best they can.

Those in the sectors that are worst affected by labour shortages recognise that the problems that they are experiencing have multiple causes. The Road Haulage Association, for example, told the Scottish Affairs Committee in November last year that

“The driver shortage that we face is nothing new. It existed before Brexit.”

It added that

“there is not one single lever that could have been pulled to sort this.”

Predictably, the SNP-Green Government is focusing its energy on blaming Brexit and the UK Government’s migration policies for Scotland’s reduced workforce availability. As usual, it is about constitutional grievance. However, the pandemic has brought into sharp relief pre-existing tensions and weaknesses that prevent economies from reaching optimum performance. As my colleague Liz Smith identified earlier, there are serious structural issues with the Scottish economy that long predate the pandemic and Brexit.

The message that we repeatedly hear from the business community is that Scotland is being hampered by a significant and persistent skills gap, which goes back years. We know from the employer skills survey that, between 2015 and 2017, the number of businesses in Scotland that reported skills gaps increased, while there was a decline at UK level.

More recently, the SNP failed to meet its commitment to deliver 30,000 new apprenticeships by 2020, impacting the pipeline of talent that Scotland needs as its ageing population becomes economically inactive. That is not to mention the dramatic fall in apprenticeship starts in the early months of the pandemic, which the CIPD says fell more sharply in Scotland than England.

I have spent the past 30 years of my career matching people and skills with organisational demand. Our top priority should be full employment, which requires the creation of good, sustainable jobs across all regions of the country.

We need to give people the opportunity to reskill and upskill, which must be demand led. Take, for example, Scotland’s digital sector, which creates around 13,000 new roles annually. Only around 5,000 new recruits are being produced each year through universities and apprenticeships, which is a massive shortfall. As the Confederation of British Industry argued after last month’s budget announcements, we need “greater ambition” from the Scottish Government on upskilling and retraining. It needs to start delivering.

The world order changed profoundly as a result of the pandemic. The resilience that has been demonstrated by businesses and workers over the past two years has been extraordinary. As we seek to recover from the pandemic, we must focus on ways to help as many people as possible. We need action—Scotland’s economic growth and productivity depend on it.

16:33  

In speaking in the debate, I must first acknowledge the devastating impact of Brexit on the Scottish and UK economies. I note that the Conservative amendment to the motion removes any acknowledgement of the impact on the Scottish economy of the end to free movement. I can only say that burying your head in the sand and completely disregarding the impact of Brexit today is as great a betrayal of the Scottish people as was the entirety of the disingenuous Brexit campaign.

Although beyond the scope of the debate, it is clear that there is a need for a wider discussion on immigration in general and on the potential pros and cons of a separate Scottish immigration system that is under the control of this Parliament.

However, I will focus today on a key sector on which there is no doubt that Brexit is having an impact and in which the main underlying causes of recruitment and retention issues are poor pay and, crucially, unequal terms and conditions, depending on the employer. I am speaking about the social care sector and the terms of employment for care workers who are employed by agencies to deliver health and social care through public sector contracts issued to private companies by public authorities and paid for by this Government.

I have talked to a number of contractors who have outlined the difficulties that they have in recruiting staff—and the even greater difficulties in retaining those staff. That is no wonder. The rate of pay for the job, at £10.02 per hour, comes nowhere near recognising the complexities and challenges of being a care worker.

The problem is about much more than the rate of pay for the job. Many carers are paid only for the time that they spend in the client’s house. If they are allocated half an hour for a client, they clock on when they enter the house and clock off when they leave. They do not clock on again until they are in the next client’s house.

I spoke recently to one carer who told me that she has to travel for up to 20 minutes between clients but is not paid for any of that travel time. She can find herself working for eight hours a day but being paid for only five or six. She is away from home for 10 hours because she is required to take two hours of unpaid breaks in the day. Would that be acceptable to any worker? Is it any wonder that we have a recruitment and retention problem in that key sector of our economy?

Carers who have to use their own cars to get between clients are not paid for travel time but get a mileage allowance. Care workers I have spoken to tell me that the allowance is 25p per mile. MSPs are paid 45p per mile, as are most public sector workers. Care workers, who are key to our economy, are paid far less and have very poor terms and conditions. Can anyone justify that? Can anyone seriously say to potential recruits that caring is a valid and valued career option? I think not.

While the finance secretary rightly points to UK Government figures, she must accept that the Scottish Government must first put its own house in order and must ensure that workers who are hired directly or indirectly to deliver key public services are treated with dignity and respect and are paid the rate for the job. Discrimination against care workers must end if we are to tackle the underlying issues in care.

16:37  

It is a privilege to speak on an issue that affects every part of our country. As others have said, we are approaching a crisis of labour and skills shortages. Although many factors play a role in that, I believe that the biggest is the reckless choice to pursue a hard Brexit, especially during a global pandemic. However, as we have seen from news reports last night and in recent weeks, there is not much that the Tory Government has not done during the global pandemic.

Many of the amazing sectors in the Scottish economy report issues with the supply of labour and skills, which have been exacerbated by Brexit and the pandemic. That double attack on our economy is difficult to navigate. What is frustrating is that one of those factors could have been avoided. At the start of the pandemic, all parties in the chamber, except the Conservatives, asked for Brexit at least to be put on hold. A Tory Westminster Government pushed Brexit on us in full knowledge of the effect that that would have; I believe, as others have said, that that was a grave mistake, particularly when coupled with the pandemic.

We can be really proud of Scotland’s food and drink sector. However, it is suffering greatly from labour shortages. Although encouraging migration is important, migration is not the sole solution to that widespread problem. The Scottish Government is working productively with business and, in line with its responsibilities, is acting in those areas.

This is a worrying time. Farming and the seafood industry report extreme labour shortages. In August 2021, Scotland Food & Drink carried out a survey of Scottish food and drink businesses to find out more about the scale of the labour crisis. Of those that responded, 93 per cent had job vacancies, 90 per cent described job vacancies as being “hard to fill” and 97 per cent felt that they would

“struggle to fill vacancies in future.”

Those figures are stark and incredibly worrying.

Like Alex Rowley and others, I have spoken to the owners of local recruitment businesses. Gary Robinson, who runs Talent365 in Coatbridge, works on the front line. He said:

“We are witnessing acute labour shortages across multiple sectors in Scotland, as businesses seek to rebuild from the pandemic and deal with the implications of Brexit (notably higher energy costs and costs of purchases / raw materials). This, in turn, is creating significant wage inflation, leaving many businesses with no option but to pass these costs on to their customers, at a time when we are already seeing considerable inflationary pressures on the economy.

Of particular concern are labour shortages in the agricultural, logistics, hospitality, technology and manufacturing sectors, with employers reporting significant difficulties in recruiting the staff they need to operate their businesses successfully.”

That business owner in my constituency has done a lot of good work in this area, and that is how he is feeling right now.

The truth is that industries do not want to see just blame or talk about the reasons for the shortages; they want to see action now. The Scottish Government’s Covid recovery strategy includes investment of an additional £500 million over the current session of Parliament to support new good, fair and green jobs and to equip people with the skills to enter and progress in them.

We must recognise that Scotland’s current population growth is due to migration, and the UK Government must end its destructive policies, which limit that growth. We have repeatedly made representations to the UK Government asking it to put in place emergency changes to the UK immigration system in order to combat acute post-Brexit shortages, but they have gone unaddressed. As usual, the UK Government just buries its head in the sand and hopes that the issue will go away. It will not, and action is needed now.

That is why I will vote for the Government’s motion. I ask members across the chamber to take this unique opportunity to do the same and demonstrate a united front in our resolve to deal with the crisis, which is affecting every constituency and every corner of our country.

We move to the closing speeches.

16:41  

I will pick up, perhaps, from where Fulton MacGregor left off. In a sense, there has been more unity in the chamber today than one might have expected from looking at the motion and the amendments. There has been a stark contrast between what were clearly the pre-prepared, written bits of members’ speeches and the bits where they responded to the debate. There has been acknowledgement that businesses are having to face a number of issues because of Covid, because of other changes in the economy and, not least, because of Brexit.

The most important point of consensus was perhaps the one that Jim Fairlie highlighted. The one bit of text in the motion that we all agree on is the one that says that businesses out there and people in the workforce have shown incredible resilience over the past years. We must pay tribute to them and perhaps listen to them a little more when we consider the solutions, rather than pretend that we have all the solutions.

Unfortunately, however, in what has been written down, we see all-too-familiar approaches from the two parties of government that we have, with one trying to claim that all the issues are to do with Brexit—many of them are, but not all of them—and the other saying that none of them is to do with Brexit.

I agree with much of what Liz Smith said—indeed, there was barely a word that I did not agree with—but unfortunately, when we look at the Conservative amendment, we see that it would completely obliterate the terms of the Government’s motion. We cannot look at the labour shortages that we see across the country—whether Scotland or the rest of the UK—and not conclude that the shortages are that much worse here than in any other part of the world.

Does the member accept that it is not about SNP members saying that it is all about Brexit and not recognising that Covid has been an issue? Does he accept that one of those things—Brexit—was avoidable and was due to a political decision, whereas Covid is a worldwide pandemic?

I would not disagree with that, but I ask the member to acknowledge that other political decisions that have been made over the past 10 years have impacted on our productivity, our labour participation rate, our attempts to tackle skills shortages and, ultimately, our income tax receipts. Not only are those receipts growing more slowly than the UK average, but pretty much every Scottish region is lagging behind pretty much every other region of the UK. Those are the consequences of other political decisions.

Our amendment would not remove the reference to Brexit—

Will the member take an intervention?

I would like to make some progress.

If Fulton MacGregor acknowledges that, he should vote for our amendment, which makes exactly those points. Quite simply, it is not credible to claim that Brexit is the sole reason that we have labour shortages. It is not just the rest of Europe, because America has shortages of truck drivers, too. Likewise, we have global supply chain problems. We have to look much more broadly if we are to seriously address those issues.

The Scottish Fiscal Commission’s report, which a number of members have alluded to, is a critical intervention at an important time. It highlights the points that I have just raised in response to Fulton MacGregor. We need a broadly based approach.

Critically, I also highlight the points that were raised by my colleagues Sarah Boyack and Alex Rowley. There is an issue about overreliance on immigration that ignores the fact that, fundamentally, inequality and insecurity have been a feature of our jobs market for far too long. Simply seeking to replace the lost migrant workers, as the sole solution, completely ignores that point.

Fundamentally, there are two ways of approaching the shortages in the labour market: either one can seek to bring more people into the labour market or one can seek to invest in skills to boost productivity and thereby the wages of the people who are already in that labour market. The best, or, rather, the worst and most egregious example of that is in social care, as highlighted by Willie Rennie and others. Alex Rowley gave the example of the mileage rate that social care workers are allowed: 25p. An MSP can claim 20p if they commute by bicycle. We are paying social care workers barely more to travel by car than we are paying MSPs to travel by bike. That shows the inequality that we have in the Scottish labour market.

On top of that, we have huge regional inequalities. The difference in hourly output between Edinburgh and the least productive region in Scotland is 50 per cent. Just between Edinburgh and Dundee—a distance of 30 miles—there is a one third drop in productivity.

Those are things that the Scottish Government has the ability to tackle. It has the levers, in its competence, to deal with skills, to support enterprise and to drive investment in infrastructure that can link our cities and places of work—yet it chooses not to use them. It has consistently cut enterprise support and it has cut the skills budget. A number of members have highlighted the fact that such choices are political—they are choices to pursue Brexit as opposed to a more rational approach, or to improve support for businesses, invest in infrastructure and invest in enterprise support—which, frankly, the Government has failed to do.

16:47  

I will start my contribution by agreeing with the first part of the Government’s motion. The resilience and innovation that employers and workers have shown through the pandemic in keeping much of our economy open should be recognised, so I, too, thank everyone who has played their part.

As we have heard today, labour markets across the world are undergoing significant pressures and changes. The United Kingdom is no different from what can be seen in the US, Europe, China and beyond.

However, there are differences within the UK, right here at home, thanks to 14 years of SNP inaction and failed economic policy. Our tax take per person is lower than the take in the rest of the UK, our welfare bill is rising, our working population is falling in comparison with that in the rest of the UK, economic growth is lower and our recovery is slower than recovery in the rest of the UK is.

Will the member take an intervention?

No, I will make some progress first.

As we say in our amendment, that has been highlighted by forecast groups, and must be addressed by the devolved Government as a matter of urgency. However, instead of attracting investment and higher-paid jobs, the Government seems to be intent on driving business away. Decisions such as turning its back on the energy industry do nothing to reverse that decline. Another lost opportunity is the Government’s decision to block free ports in Scotland. We lose out, while investment goes to England.

Will the member take an intervention on that point?

I will, at the end of this part of my speech.

The mayor of Tees Valley said:

“We have attracted investors who were originally looking at Scotland when some areas in Scotland were looking at freeport status, and when they decided not to move forward with the current UK freeport policy”

they

“have actually abandoned Scotland.”

To correct the record, I note that—as Douglas Lumsden might know—the Treasury was committed to ensuring that there was a free port or green port in Scotland before that was changed by the Scotland Office. We are engaged in discussions with them to ensure that Scotland is treated fairly. I remind the member that the UK Government has chosen to invest in ports in England to the detriment of Scottish ports.

I hope that we have seen another U-turn from the SNP Government, because so far it has not engaged with the UK Government like the other regions across England have. If that is now the case, I welcome that news.

Jobs and investment have been lost to Aberdeen, all because the devolved Government wants to pick a political fight. It is a disgrace. Another motion for debate has been brought before us by a tired Government that is attempting to pat itself on the back but is, in fact, doing the opposite by highlighting its incompetence. That is just like when Alex Salmond promised many years ago that there would, with the SNP, be thousands of green jobs, none of which have come to fruition.

Members from across the chamber have made interesting points. I think that we all agree that immigration impacts on our economy—but so do many other factors. As Daniel Johnson and Liz Smith pointed out, the economy has long-term underlying issues that existed long before Brexit or Covid.

The cabinet secretary ignored the intervention by Murdo Fraser about labour shortages in Europe and how the Accor group of hotels in France cannot get staff. Freedom of movement is therefore obviously not the only issue, when places in France also have labour shortages.

As Liz Smith pointed out, SNP ministers have refused to listen to businesses, failed to the listen to the Scottish Fiscal Commission and failed to invest in skills and productivity.

I am grateful to Douglas Lumsden for giving way. Does he acknowledge that although there are shortages in hospitality on the continent, they are worse here—and worse because of Brexit?

If there are issues in France and companies cannot employ people there, how can we tell that it is worse here? It is not as though there are thousands of people lined up who are being blocked by Brexit. That is simply not the case.

The big issue is the weakness in tax revenue and the shortfall that it will bring. Liz Smith pointed that out and we heard about it at the Finance and Public Administration Committee today. That is the big serious issue that is caused by long-term structural issues in our economy.

I completely agree with Michelle Thomson that we need to train Scottish workers to the highest possible standards. However, Paul Sweeney was right to highlight cuts to the skills budget. Just when we need it, money is being taken away.

Jim Fairlie said that we need independence. Well, I have news for him. He does not like Brexit, but the SNP’s own economic adviser said that independence would be like “Brexit times 10”.

Other huge areas of failure by the Scottish Government are productivity and automation. I have seen nothing from the Government that will address those issues, which are long term.

The Scottish Conservatives’ top priority at the last election was employment. We want to create good and sustainable well-paid jobs across all the regions of the Scotland. We want to give people hope and opportunity.

We also promised unlimited apprenticeships for Scotland’s young people. Our demand-led model for apprenticeships would ensure that funded places would reflect employer need rather than unambitious SNP targets. We would expand funding for graduate apprenticeships, and we would extend choice in and availability of one-year and two-year foundation apprenticeships for secondary 5 and 6 pupils. We would aim to boost the number of apprenticeships that are taken up by women, and we would ensure that the UK apprenticeship levy is fully used for apprenticeship funding in Scotland.

The UK Government’s kickstart scheme has been a great example of what a Government can achieve when it is focused on the day job. New figures show that 100,000 young people have started new jobs through the kickstart scheme—among them, thousands of Scots who have been helped on to the first step of the career ladder.

So much more could be done by the Government to develop the existing talent in this country, so that we could boost our currently lagging productivity levels. There must be a real focus on workforce planning, skills training and increasing employee compensation for our essential workers. Scottish workers have heard enough warm words while seeing other parts of the UK recover faster than us. They have heard enough platitudes, but seen no action, from the Scottish Government, and they have had enough of seeing our public services being underfunded and our workers being undervalued.

It is time that the Government stopped playing politics with the issue and, instead of simply blaming Westminster for all Scotland’s ills, came up with proposals for how it can grow and flourish. It has had 14 years in power. It is time that it stepped up and took responsibility for the financial situation that Scotland is in.

16:55  

I genuinely thank members for their powerful and valuable speeches, which have reflected the importance of the issues that we are discussing.

Let me reiterate what we say in our motion and what members of other parties have said: this Government recognises the resilience and innovation that employers in many sectors of our economy have demonstrated over the past year in response to extremely challenging circumstances.

It is clear that businesses and employers need our support, and the support of others, in mitigating the impact of the current shortages in the labour market. Labour shortages affect our nation’s productivity, as many members have said. They affect business profitability and growth, inflation, and the country’s finances and economic success. They can also present an opportunity to get more people into employment, but labour shortages hold our country back.

The cabinet secretary set out the challenges that, as a result of several factors, face Scotland’s business community, economy and society. As many members have said, the pandemic has been enormously disruptive. The challenges are also the result of the cataclysmic, reckless and monumentally foolhardy decision to remove Scotland from the European Union against her will.

Several SNP members have said today that Brexit was a political decision. Does the minister acknowledge that the decision about Brexit—I disagreed with Brexit—was a democratic one by the British people, including many people in Scotland and in the SNP, which we have to accept?

We have to accept that Scotland’s Parliament and the people of Scotland rejected Brexit in a referendum and that Brexit was foisted on us against our democratic will. Not only that, but—this is key to the debate—Brexit was foisted on Scotland at the worst possible time and in the worst possible way, against the backdrop of a pandemic and other on-going pressures, including the demographic trends of an ageing population and declining birthrate that have led to projections of a 3 per cent to 5 per cent reduction in the working-age population in Scotland. In that context, the loss of freedom of movement, the erection of barriers and the tightening of immigration are the last things that our economy needs.

Those are themes that many colleagues have eloquently explored—albeit that some members, particularly Conservative members, seem to live in an alternative reality in which those issues can simply be brushed under the carpet. Indeed, Donald Cameron said that he did not even want to talk about Brexit. Of course, Brexit is such a fiasco and is so damaging that we can understand why the Conservatives do not want to talk about it.

In the real world, employers across the Scottish economy have been reporting a combination of skills shortages and labour shortages that are impacting on their ability to provide goods and services. In November, 38.3 per cent of Scottish businesses reported that they were experiencing a shortage of workers. The shortages are more substantial in particular sectors, including accommodation services, food services, and transportation and storage. Although some of the issues are not new, as members have said, Brexit and the pandemic-related disruption have severely increased their scale.

Less than two years after Brexit, it is clear that its impact on the Scottish labour market has been disastrous, particularly for industries that traditionally relied on EU workers. Brexit has significantly reduced businesses’ ability to source non-domestic labour, which makes up about 8 per cent of Scotland’s workforce. The rate is higher in some sectors—for example, the hotel and restaurant sector.

Over the past two years, national insurance number registrations for overseas nationals in Scotland have fallen by around 75 per cent. I ask members to think about that for a second; the number has gone down by three quarters. It is preposterous to dissociate that statistic from Brexit or the UK Government’s hostile immigration policy.

Liz Smith rose—

Daniel Johnson rose—

I will take an intervention from Daniel Johnson.

I thank the minister and I apologise to Liz Smith.

I agree that it is preposterous to dissociate those issues, but Brexit is a fact and it is not going away any time soon. Does the minister acknowledge that, whether we agree with Brexit or not, the solution is to do with flexibility, skills and getting people who are out of work into jobs as efficiently as possible?

The solutions should be, and are being, looked at, but the damage that is being caused by Brexit needs to be fixed, and many of the tools for fixing the damage that is being caused by Brexit lie with the UK Government. That is why Brexit is such an important part of the debate.

However, this is not just about Brexit. Covid’s impact of further reducing migration to Scotland has worsened the issues, which is leaving businesses across the economy struggling to attract enough staff and skilled workers. Again, however, I note that we cannot divorce Covid from Brexit, because what we are being told by employers—the Conservative Party should listen to Scotland’s employers—is that people who have left to go home because of Covid are, because of Brexit, not coming back to Scotland.

When it comes to listening to employers, would the minister care to remember that the business community is telling us very bluntly that many of the issues that it is facing now are partly issues about productivity, growth and investment, which are Scotland-related problems that are not to do with the UK?

Various problems face the labour market in Scotland at the moment, some of which the Government is addressing. However, other problems require the UK Government to wake up to the damage that has been caused by Brexit and to use the tools that it has to help us to repair the damage and to address labour shortages in Scotland.

One of the biggest sectors that is suffering at the moment is Scotland’s food and drink industry, which is facing crippling staff shortages. Seafood Scotland has said that around 15 per cent of jobs in larger factories are unfilled, and 63 per cent of seafood processors are experiencing staff shortages. There are fears that the situation will get worse. So much for the “sea of opportunity” that was promised by the Conservative Party to fishing communities in this country. The chief executive of Scotland Food & Drink, James Withers, recently reported that one business had been forced to forgo up to £15 million-worth of contracts because it did not have enough staff to fulfil orders. If we replicate that right across the Scottish economy, we can see the cost of Brexit to our economy.

I will reiterate the impact that Brexit has had by illustrating its effects on agriculture. The past year has been a particularly difficult time for agriculture. As Jim Fairlie said, the industry has struggled to cope with the issues that the UK’s exit from the EU has created, including additional paperwork and reduced labour supply for planting and harvesting crops.

In the soft fruit and veg industry alone, businesses have reported an average 20 per cent shortfall in seasonal agricultural workers. With the uncertainty over labour, some growers have had to walk away from the industry, while others have reduced production, which is another economic cost to our rural communities.

On Christmas Eve, the UK Government announced an extension, to the end of 2024, of the seasonal worker visa route, with a statement that the industry must transition to using domestic workers. Apparently, the Conservative Party thinks that that has nothing to do with Brexit, but it was treated as a big damp squib by NFU Scotland, which said:

“On Christmas Eve, the government has given Scotland’s fruit and veg industry deeply disappointing news”.

It went on to say that

“Government plans to then start tapering the scheme down from 2023 shows a complete disconnect from the industry.”

It continued:

“Plans to start dismantling the scheme are a blow and mean some very difficult decisions will have to be made about future production.”

Yes, there are things that the Scottish Government can do, but the UK Government has the tools now to try to fix the damage that has been imposed by Brexit. We are asking the UK Government to work with the Scottish Government to try to fix some of the damage; otherwise, more damage will be inflicted on the Scottish agriculture sector.

I want to close by talking about what the Scottish Government is doing. We will develop a talent attraction programme and an immigration service to attract workers who have the skills that Scotland needs. We have made constructive proposals to the UK Government, including for 24-month and 36-month visas, additions and structural changes to the shortage occupation list and a number of other measures. We want the UK Government to work with us, which is why we are proposing a joint task force that would include the devolved Administrations and the UK Government.

This is a very serious situation for the Scottish and UK economies and it is a very serious situation for Scotland’s business community, so our message to the UK Government is this: “Work with us. Help us to get this sorted, repair the damage caused by Brexit and address the staff shortages that are undermining this country’s success.”

I support the motion.