Meeting of the Parliament (Hybrid)

Meeting date: Tuesday, March 15, 2022

Official Report 1137KB pdf

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Topical Question Time

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Food Shortages and Rising Food Prices

To ask the Scottish Government what action it is taking in light of reports of potential international food shortages and rising food prices. (S6T-00575)

The war in Ukraine is truly terrible. While our thoughts are rightly with all Ukrainians who are suffering the consequences of the invasion by Putin’s forces, the war’s impacts are beginning to extend beyond Ukraine’s borders. Ukraine is a proud independent nation that exports many foodstuffs and agrifoods to many countries. Scotland is not exempt from the loss of that produce.

I therefore regularly meet officials, key stakeholders and industry representatives to gather information to monitor the situation, including the effects of rising energy prices on transport, and of other supplies such as fertiliser, and how that will affect farming, fishing, fish farming and food production and manufacture in Scotland and the United Kingdom.

As a result of Brexit, we already have acute labour shortages in key sectors—including food and vegetables production, horticulture generally, fish, seafood and meat processing—which are likely to be exacerbated by the current crisis, given that many people who come to Scotland for seasonal work do so from eastern Europe. I have met relevant ministers in the other three Administrations, and we have agreed to meet regularly.

The cost of living crisis, especially when it affects essentials such as food, clearly affects people on the lowest incomes most. Across Government, we are committed to using all the powers and resources that are available to support people in Scotland, but we are also calling on the UK Government to do more.

NFU Scotland has called for a relaxation of greening rules so that land that has been set aside for nature recovery can be used for cereal production. As a country, we need to have a much more strategic approach to food security, including by ensuring that our productive land feeds as many people as possible, but that must not come at the cost of our long-term future and ecological wellbeing. Can the cabinet secretary confirm that greening schemes will not be discarded in that way?

First, I want to make clear the Scottish Government’s commitment to supporting farmers and crofters to meet more of our food needs, and to do so more sustainably. However, it is really important that we maintain and enhance nature and that we do not scale back our efforts in that regard. Events in Ukraine, tragic as they are, do not lessen the adverse global impacts on the climate and on biodiversity that we are facing. Indeed, they only strengthen the case for doing more because, ultimately, that is how we can make our farms and food production systems more resilient.

There are a number of considerations in relation to changes to greening. However, there is flexibility within the greening rules for farmers to apply them according to their own circumstances. For example, they could choose options other than to fallow, such as green cover crops or catch crops. We will work with the industry to promote those other flexibilities, and we will, of course, continue to work with the industry to find practical solutions that bolster food production in these times of uncertainty, while continuing to contribute to wider climate change and biodiversity objectives.

Our food supply was already being disrupted before the conflict, because of Brexit. We had tailbacks of lorries and food literally rotting in fields because of the lack of seasonal workers. Even if farmers plant on greening land, who will be there to harvest the crops? It is clear that sustainable domestic food production must be the priority, which includes a shift from growing crops to feed livestock to growing crops to feed people.

How will the Scottish Government ensure that food producers are supported—especially smaller and sustainable local producers—to maximise food growing for people and ensure that we have a robust food supply system?

We recently published our vision for the future of agriculture, in which food production is identified as a critical element of our plans for the future of agricultural support, along with tackling the climate emergency and the biodiversity crisis.

We absolutely recognise the tumultuous times that we have faced over the past couple of years through the pandemic, Brexit and, now, the realities of the impacts of the war between Russia and Ukraine. They show how important our food security is, so we will, of course, continue to focus on that. We are working alongside the industry and our wider food and drink supply chain to understand the impacts and to support them in developing our food security and ensuring that that is a key focus, going forward,

I heard the cabinet secretary’s response to Maggie Chapman. The UK Government has just announced that it will impose a 35 per cent tariff on top of existing tariffs on a range of imported goods from the Russian Federation, including fertilizers, wood, beverages, spirits, vinegar and cereals. How does the Scottish Government envisage that increase in tariff affecting food security here, in Scotland?

We are giving urgent consideration to the announcements that were made this morning in relation to tariffs. We are looking at how they will impact on the availability, first of all, of white fish and white-fish produce in Scotland and the UK. There is no doubt that there are going to be issues in that regard.

I make it clear that we support the action that the UK Government is taking. It is the right approach, and the international community is absolutely united on the matter. We fully support the application of sanctions against the Russian Federation because of its illegal invasion of, and unprovoked aggression towards, Ukraine.

However, we are also alert to the potential significant and adverse impacts that that could have on Scotland’s white-fish producers. That is why we are currently considering the matter. Previously, we made clear our commitment to providing support to Scottish exporters and businesses that are affected by the on-going situation. However, I have raised with ministers at the Department for Environment, Food and Rural Affairs the specific needs and interests of our fish processors and have made clear the need for it to provide support for businesses that might be affected by such tariffs. Potentially, that includes providing some sort of furlough for workers who are affected.

Will the cabinet secretary commit to developing a plan to increase the number of acres that are available for food production in Scotland, and consider a temporary moratorium on the support scheme rules? Furthermore, does she agree with Lorna Slater, from the green wing of her own party, who has suggested that sanctioning supermarkets on waste to landfill through the proposed circular economy bill will address the immediate and serious impacts of global food insecurity, in light of Putin’s attacks on Ukraine?

I do not know whether Rachael Hamilton caught my response to Maggie Chapman on food production and the land that is made available for that. Again, we have made clear our commitment to supporting farmers and crofters to produce more of our own food and to do so more sustainably. However, it is vital that we maintain and enhance nature and that we do not scale back our efforts on that, because only by doing that can we make farms and our food production systems more resilient.

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Ferguson Marine

To ask the Scottish Government what action it is taking to ensure that Ferguson Marine is competitive, in light of the reported decision to award the contract to build two new CalMac ferries to the Turkish ship builder, Cemre Marin Endustri. (S6T-00577)

We were disappointed that Ferguson Marine did not progress to the invitation-to-tender stage of the Islay vessel procurement last year. The Scottish Government remains fully committed to supporting the yard to secure a sustainable future, including a pipeline of future work. My officials are supporting the yard in its development of a business case for capital investment, which will help to support improved competitiveness.

Significant progress has already been made at the yard. We know that it is actively pursuing vessel opportunities and that Ferguson Marine is back to being a serious contender for future vessel contracts.

I hope that the minister is right about that. Caledonian Maritime Assets Ltd had no choice but to award the contract for the ferries elsewhere. The Turkish yard churns out one vessel every few months, so we can be pretty certain that we will see new ferries on time.

Last month, we learned that nearly 1,000 cables would have to be ripped out of the MV Glen Sannox—which was launched by the First Minister in 2017—because the cables are too short. They are too short because the control panels that they were meant to connect to were fitted further away than was originally planned, so they do not reach. Who is responsible for that, what is the extra cost involved, and by how long will both ferries be delayed as a result?

Graham Simpson’s characterisation of the issue is not accurate. There were issues with the length of the cables, due to previous issues with subcontractors. That is being looked at contractually in order to understand the reasons for it, and progress has been made on refitting the cables and correcting the error—which, as I said, was a consequence of earlier activities.

When it comes to the impact on delivery, the site director will give a report and make information available on that very shortly.

I have asked a question in this chamber and I expect to get an answer. The minister has not attempted to answer the question, which was about by how long the ferries will be delayed. That is not acceptable.

We are at crisis point. Just yesterday, only 13 of CalMac’s 29 routes were operating normally. Islanders are at their wits’ end. There is no slack in the system, so when a ferry breaks down, the knock-on effects are horrendous. We need a steady pipeline of new ferry orders. The £580 million over five years that was announced by the Government is nowhere near enough. Graeme Dey asked for £1.5 billion over 10 years. That kind of commitment would give Scottish yards, including Ferguson’s, the confidence to invest. If Graeme Dey knew what needed to be done, why does the minister not know?

Lastly, Jenny Gilruth promised to publish the long-awaited project Neptune—

If we could have a question, please, Mr Simpson.

There was a question. My other question is this. What has happened to the project Neptune report that Jenny Gilruth promised to publish last month? We are still waiting for it.

As Graham Simpson knows well, the Scottish Government is committed to ensuring that Scotland’s islands have the connectivity and ferries that they require, and we are making a substantial investment to ensure that that is, indeed, the case.

Graham Simpson is also aware—I said this in my answer to his previous question—that the details of the impact of the cable issue are being worked through at the moment. We will report back when robust information is available on timing and on the cost implications.

As the minister said, it is clearly disappointing that the yard did not progress to the invitation-to-tender stage of the Islay ferry procurement last year. Does he share my view that, given the noise that the Tories have previously made about the ferry fleet, and given the benefits that the new vessels will bring to islanders and the economy, their questions seem disingenuous?

I am very pleased to see that CMAL has named the preferred bidder for that vital project, which will lead to the building of two new ferries to serve the Islay routes.

We look forward to continuing to work with key stakeholders to develop programmes for major and smaller vessels. We are investing at least £580 million as part of our infrastructure investment plan. Our approach will accelerate the bringing of new ferries into the fleet, allowing a second Islay ferry to be deployed 12 months sooner than was previously planned. The new vessels will provide additional car capacity of nearly 40 per cent and an increase in heavy goods vehicle capacity of more than 60 per cent compared with capacity on the existing vessels on the route.

The links to Islay are some of the busiest services for freight on the Clyde and Hebrides ferries network, and the new vessels will help to grow the island’s economy, as well as bringing added resilience to the fleet.

The new vessels are being built overseas in a Turkish yard. That yard is increasingly exposed to changes in exchange rates, and to inflation, which hit 54 per cent in Turkey only two weeks ago. That is on top of increasing costs for raw materials and fuel resulting from recent events, most notably those in Ukraine. Will the minister confirm that it was agreed that the ferries would be built to a fixed price, or is there a mechanism or flexibility in the contract for the price to increase to recognise some of those variables?

CMAL has entered into the contract with the yard on a commercial basis and I am not in a position to give details of the commercial aspects of the contract at this point. The member should rest assured that CMAL will have taken those factors into account in the contract and in making arrangements and placing the orders with the yard that will provide the ferries.

Our island communities desperately need a new ferry-building programme, and that programme should support Scottish industry. An Organisation for Economic Co-operation and Development peer review found that the Turkish ship-building industry was hit by Covid, in common with the industry worldwide. It also found important strengths in the industry in Turkey: it has enough highly skilled labour, flexibility in response to changing market conditions, and worldwide recognition. Does the minister agree that those things are also true of the industry on the lower Clyde?

The Turkish Government has a development plan to support its shipbuilding industry. Why is no equivalent plan in place here to ensure that Ferguson’s and the lower Clyde win contracts and future opportunities?

The member should rest assured that there is continual engagement between the Scottish Government and the Ferguson yard to support the yard in its journey to become globally competitive.

As I indicated in my answers to Graham Simpson, the yard now finds itself able to bid for vessel contracts, and it is continuing to seek out opportunities in that regard. I have also said that the Scottish Government continues to work closely with the yard to ensure that it becomes globally competitive as soon as possible. We are supporting it in every respect to achieve that.

The minister was surprised that Ferguson’s did not bid for the contract to build the ferries. He should not be, because his Government owns that company. Does he have a clue what is going on in his company?

The First Minister said that Ferguson’s was on a journey, but she did not say that it was on a journey to Turkey. Given what has happened with Burntisland Fabrications, the Lochaber aluminium smelter and other companies, is it not the case that this Government’s industrial intervention strategy is a complete and utter shambles?

No, that is not the case. The yard is still operating, employing hundreds of skilled workers, as a consequence of action taken by the Scottish Government. Lochaber is still producing aluminium as a consequence of action taken by the Scottish Government, and Dalzell is still producing steel as a consequence of action taken by the Scottish Government. Scotland is still the area of the United Kingdom outside London that attracts the most foreign direct investment, all as a consequence of actions taken by the Government to support industry in Scotland and create high-paid jobs.

That approach will continue as we progress towards delivery of the industry of the future, as we articulated in our strategy for economic transformation. Scotland has great strengths across a range of industries, the length and breadth of the country.

I say to Willie Rennie that I do not think that shipbuilding is the Lib Dems’ strongest suit—[Interruption.] Nor is it that of the Tories, for that matter.

I am sure that all members agree that the new chief executive needs to be given the opportunity to make progress, finish the current vessels and make the yard competitive. Will the minister assure the Parliament that the chief executive will be given the support that he requires and that greater co-operation with CMAL will be established at the beginning of his tenure?

Will the minister also assure us that reporting mechanisms to the Scottish Government will be strengthened? Does he agree that working with and listening to shop stewards at the yard will be imperative in ensuring that the yard is the success that it can be?

I welcome the member’s comments. We have set out two priorities for the yard’s management: to finish building the two ferries that are currently under construction; and to get the yard into shape to compete for new work. Ministers will do all that we can to ensure a strong future for Ferguson Marine.

I agree that it is key that the yard is able to draw on CMAL’s experience and expertise. We welcome the collaborative approach that the new chief executive is taking, in working closely with CMAL, including through the secondment of an experienced CMAL staff member to Ferguson’s management team.

Ministers regularly meet yard management, the chair of the board and trade union representatives, all of whom share the ambition for the ferries’ delivery and the yard’s success. We encourage all partners to work together in the interests of the success of Ferguson Marine and a strong future for commercial shipbuilding on the Clyde.