Meeting date: Wednesday, August 12, 2020
Meeting of the Parliament (Hybrid) 12 August 2020
Agenda: One Minute’s Silence, First Minister’s Question Time, Return to School, Economic Recovery Implementation Plan, Business Motion, Decision Time
- One Minute’s Silence
- First Minister’s Question Time
- Return to School
- Economic Recovery Implementation Plan
- Business Motion
- Decision Time
Economic Recovery Implementation Plan
The next item of business is a debate on motion S5M-22396, in the name of Fiona Hyslop, on an implementation plan for economic recovery.15:23
I want to begin on a note of hope and optimism. This morning, as I left home, I saw three young children from my street, who were excited as they set off for school. All three were starting primary 1 this morning. That serves as a reminder of what our focus should be: building a future and recovery for our young people.
The advisory group on economic recovery report stated that Scotland’s recovery must be education led, and I am clear that education, skills and employment opportunities that support our young people must be our focus. The actions that we take now will shape the future opportunities of all Scotland’s children.
On top of the devastating health impacts, the Covid crisis has already caused serious damage to the economy here in Scotland and across the globe. The labour market statistics that were published yesterday and today’s United Kingdom gross domestic product figures demonstrate clearly the challenge that individuals, communities and businesses will face for some time.
Reflecting the urgency of the crisis, we quickly commissioned reports from a sub-group of the Enterprise and Skills Strategic Board and from the independent advisory group on economic recovery to draw together recommendations for a green economic recovery built on wellbeing, jobs and a digital economy.
The advisory group reported swiftly, with 25 wide-ranging recommendations, and we set out immediately to develop a full response, which we published last week. We have accepted all the recommendations and set out not just how we would take them forward but where we can do more, with additional actions on procurement, small and medium-sized enterprise support, digital support and equalities to help Scotland on its path to recovery. We responded immediately, with actions to protect and support good-quality and high-skilled jobs, and our work will continue. Further actions for recovery will be published in the forthcoming programme for government, infrastructure investment plan and climate change plan update.
Clearly, the Government will have a key role in responding to the crisis, but I know that we cannot do it alone. We need a national endeavour and to work with partners from across the economy and society. To deliver on the recommendations for recovery, we need everyone to play their part. I reiterate my offer to work constructively with MSPs as part of the national recovery work.
The reports were clear that we have an opportunity to do things differently—to rebuild our economy with wellbeing and fair work at its heart. That is something that I believe in passionately. At the core of the Scottish Government’s responses to the reports is a firm commitment to do all that we can, first, to protect jobs and the productive capacity of Scotland’s economy. Secondly, there is a commitment to ensure that workplaces can reopen safely for workers and for customers and that, where there is a need for people to reskill or upskill to do their job differently or take advantage of new opportunities, they can do so. Thirdly, there is a commitment to create new good-quality jobs for the future as part of a necessary and desirable move towards a sustainable, wellbeing and digital economy that is built around fair work and a just transition to net zero.
The advisory group on economic recovery rightly highlighted the long-term impacts on young people as one of the greatest risks of the Covid crisis. The young people who will make up our future workforce are among those who have been hit hardest by the pandemic. We must support our young people and I want to send a clear message to them today. Last month, we announced an additional £100 million employment and skills support fund to tackle the employment challenges that we face as a result of the pandemic. Yesterday, I announced that £10 million of that funding will be for a range of measures to recruit and retain apprentices, including the Scottish Government’s adopt an apprentice programme, which supports apprentices who may face redundancy as a result of Covid-19.
The advisory group also recommended the creation of a job guarantee for Scotland’s young people. I can announce today that the Scottish Government will be committing £60 million of the £100 million employability fund to support Scotland’s youth guarantee, which will be targeted at those most in need of support. That will support young people in a range of ways to make the transition into work, and I know that that has the support of parties across the chamber.
I asked Sandy Begbie, who helped to design the Edinburgh guarantee, to urgently draw together an implementation plan of interventions to keep young people in work; to encourage employers to recruit more young people; and to ensure that our colleges and education system prepare young people for future work opportunities.
We want employers to have a clear leadership role in delivering the youth guarantee. I encourage employers in all sectors to come forward and support that crucial intervention in order to prevent Covid from leaving a lasting impact on the employment opportunities of our young people and so that they can play their full part in our economic recovery.
Our actions must support the creation of jobs now, but we also have to put in place the long-term foundations for a future of good sustainable jobs that contribute to wellbeing and grasp the opportunities of a green recovery. The £230 million economic recovery stimulus package that was announced in June was the start of that. The stimulus package will create new jobs by providing a pipeline of work for businesses, covering construction, low-carbon initiatives, digitalisation and business support.
Our net zero ambitions are at the heart of that stimulus, with £66 million to support the transition to renewable energy sources, research in future transport, including hydrogen bus investment, and a range of renewables and decarbonisation projects across the country. Additionally, the Scottish Government’s heat transition deal will support investment in low-carbon heat infrastructure projects, including in heat networks, heat pumps and hydrogen for heat to aid the net zero transition, reduce emissions from homes and buildings and create new green jobs across the sector.
We are supporting innovative new companies. Scottish Enterprise has reported 199 applications—mainly from companies in the technology, engineering and life sciences sectors—to the £38 million early stage growth challenge fund that we launched in July.
Our package for support to business has, so far, totalled more than £2.3 billion. The small business and retail, hospitality and leisure grant schemes have provided a lifeline for many companies. The £185 million additional support fund and the £17 million for the seafood and fisheries sector have provided targeted assistance where other schemes did not. Collectively, those grants have helped to protect jobs, prevent business closures and lay the foundations for our economy to safely restart and recover.
Protecting jobs goes beyond financial support. We will build on the successful partnerships that delivered sector-specific guidance at the height of the crisis by bringing together business, industry leadership and trade unions to deliver appropriate sectoral plans for recovery. Those plans will chart the route out of the Covid crisis by outlining immediate, short, medium and long-term priorities, with a focus on delivering a wellbeing economy, and will develop approaches to deal with other external issues that face the economy, such as the end of the European Union transition period. The chamber must and will return to discuss the economic reality of Brexit for businesses and jobs.
Beyond the measures that we can take directly, we will also continue to press the UK Government to recognise the specific nature of Scotland’s economy and to put in place appropriate measures to support the hardest-hit sectors beyond the end of October, when the job retention scheme is phased out. There needs to be a sector-specific jobs protection and retention scheme for workers in the sectors that cannot safely reopen by that date.
For many, the nature of work has changed and, last week, I announced that we will double the size of the flexible workforce development fund to £20 million to help employers, particularly SMEs, to upskill their existing workforce with training delivered by colleges. We will also support jobs through development of a Covid-19 transition training fund: a flexible skills programme to support people facing redundancy in the most affected areas, sectors and regions to retrain, for example, for the green and digital jobs that will be part of the economic recovery.
Procurement and planning also have a significant role in supporting jobs. Last year, Scottish public sector procurement spending supported around 100,000 jobs; we will aim to get more value from our procurement spend by targeting economic recovery in local areas and securing jobs. We will explore options to alleviate planning constraints, build capacity and deal more quickly with complex applications, in order to unlock investment and provide jobs.
In his amendment to the motion, Maurice Golden asks us to continue to work productively with the UK Government; of course, we will do so, but we will also press the UK Government on the need for support measures that reflect the specific nature of Scotland’s economy. Business and workers want action to protect and deliver jobs; our response seeks to deliver that, and we will keep Parliament informed of that progress.
I am happy that the amendments from Richard Leonard and Willie Rennie recognise the importance of quality childcare. For 15 years, I have been campaigning for childcare to be recognised as a crucial part of the economy. I am glad that others agree and I will listen to what they have to say.
There is much in Andy Wightman’s amendment that I agree with, but it does not help the tone of the debate or the desire to reach consensus if contributors on any side resort to name calling.
Recent events have driven home the fact that the Covid crisis has not gone away. Our economic recovery has to proceed in a safe and sustainable way that balances the safety of Scotland’s people with their economic prospects and livelihoods.
As she will know, the Scottish Government has allocated £500 million to the Scottish National Investment Bank. Can the cabinet secretary confirm that the vast majority of that money will be used to help existing firms to survive Covid?
The Scottish National Investment Bank has a well-respected and talented chief executive, Eilidh Mactaggart. If Mr Lockhart has not had the opportunity to meet her, I will encourage her to meet him and explain the progress of the bank’s work. It will be using its patient capital to support businesses. As he reflects, many of those will be existing businesses, to make sure that they can capitalise on the opportunities for a green recovery but also save jobs. However, the bank will also look to new industries; for example, in the north-east, where we have the transition from oil and gas companies, there is the balance around supply chains and potentially new companies. He is right that the growth in jobs and the pipeline for jobs in Scotland will come from inward investment and new companies starting out, but there is great potential in our existing companies, particularly moving into the new energy transition and green recovery area.
The only way to build a sustainable recovery will be by working collaboratively across parties and with industry, unions and other partners building trust and confidence and taking decisions collectively.
We are bringing forward the immediate actions that we need to take to support Scotland’s economy and protect jobs, and in the coming weeks and months we will publish more detail in our programme for government, our infrastructure investment plan and our climate change plan update to match the scale and ambition of what a wellbeing economy and green recovery mean for Scotland.
The Covid-19 crisis has fundamentally changed how we think about many aspects of our economy and our respective roles in it. There is no question but that we must now do things differently. Crucially, we have an opportunity now to work collectively in a national mission to rebuild our economy with wellbeing and fair work at its heart.
That the Parliament notes the serious damage to the economy already caused by COVID-19 in Scotland and across the globe; recognises that the country will continue to face economic damage affecting individuals, communities and businesses for some time to come; resolves to work collectively in a national mission to build a resilient, inclusive and green recovery, which will build on the natural, economic, social and individual strengths of Scotland to deliver a wellbeing economy; notes the publication of the reports, Economic Recovery Implementation Plan: The Scottish Government’s response to the Advisory Group on Economic Recovery and Addressing the labour market emergency: The Scottish Government’s response to the Report by the Enterprise & Skills Board sub-group on measures to mitigate the labour market impacts from COVID-19, and calls for cross-party consensus in taking forward the actions required to deliver on both the recommendations of those groups and the additional actions proposed by the Scottish Government on procurement, sector recovery, SME support and digital support to ensure that Scotland continues to develop its path to recovery, and acknowledges that further actions for recovery will be set out in its forthcoming Programme for Government, Infrastructure Investment Plan and the updated Climate Change Plan.15:36
The Scottish Conservatives welcome the findings of the advisory group on economic recovery, with the caveat that detailed policies must be drawn up as quickly as possible to get the recovery underway. The Government’s response also contains much to welcome: talk of a green recovery, addressing rising unemployment and focusing on the wellbeing of our citizens. However, the detail on how to accomplish any of that is still missing—and I say that because we need urgent action to prevent this crisis from becoming a catastrophe.
I appreciate that the Cabinet Secretary for Economy, Fair Work and Culture understands that there is a need to act. During last month’s debate she said that the crisis had
“instilled a desire for change”.—[Official Report, 23 June 2020; c 36.]
That is why it is so frustrating not to see urgency reflected in the Government’s response. It should be, because jobs are being lost right now. Unemployment has risen to 4.5 per cent, which is higher than the overall UK rate, and it is almost certain to rise again. Across the west of Scotland, we have already seen jobs go at Glasgow airport, Rolls-Royce and many other businesses. Similar losses are happening across Scotland and serious effort is needed now to mitigate those losses.
Would the member accept that some of that effort, for example extending the furlough scheme, would be action that needs to be taken on the part of the UK Government, and that aviation and other sectors need the furlough scheme to be extended?
I fully accept that we need sector-specific action and that both the UK and Scottish Governments have a role to play in the wellbeing of Scotland’s economy. I am delighted that the UK Government has, for example, provided a Covid-19 corporate finance facility in excess of £2 billion to help airlines and aerospace companies, as part of a suite of measures.
Nevertheless, we must secure more than 500 Scottish jobs that are linked to the UK’s internal market. However, the SNP’s plan only mentions strengthening Scotland’s brand value in international markets and not in the rest of the UK, which makes up 60 per cent of Scotland’s trade. With so many jobs—
I know that the UK Government wants to have a political and constitutional argument about the internal market, but I have said in my discussions with Minister Zahawi and Secretary of State Alok Sharma that the danger of their proposal is that it would slow decision making and provide an opportunity for bureaucratic red tape, as it would allow other people to make decisions that are already made in Scotland.
From a business point of view, does the member see the merit in keeping things simple and using the mechanisms that we already have, rather than having bureaucratic legislation when we do not need it? If we do not need to legislate, we should not—that is a tenet of business philosophy.
I quite agree that we want to have minimum red tape and bureaucracy and work collaboratively. Unfortunately, the cabinet secretary’s colleague who is negotiating as part of the UK internal market does not share that approach and, unfortunately, that is where the politics is coming from, to the detriment of the people of Scotland.
Job losses will affect young people most of all, so I welcome the £50 million announced to tackle youth unemployment, but we need a breakdown of that. For example, how much will go to colleges and universities, to prioritising apprenticeships or to young people in rural areas, who face their own set of challenges? We also need clarity on the proposed transition training fund to help those at risk of redundancy. Exactly what sectors will it focus on and will workers who are not in those sectors be eligible for help?
It is worth highlighting that the fund will support the net zero emissions effort, which is the right approach if we want a green recovery. Efforts should be made to seek opportunities with relevant businesses and sectors on that. For example, low-carbon bus manufacturer Alexander Dennis Ltd and the oil and gas sector present opportunities to help hard-hit areas create green jobs and apprenticeships and retain high-value skill sets. The green recovery would also help to increase resilience for future economic shocks by protecting natural capital, which underpins industries such as agriculture, food and drink, tourism and hospitality. The latter has seen an almost 90 per cent downturn, which is a clear indication of the need for better protection. That is recognised in the Government response but, again, we need to see the practical short and long-term policy steps, which is a common thread across every section of the plan.
If we take active travel, for example, we have seen temporary adaptations, with councils competing for funding. What we really need is fair funding for permanent adaptations that cut emissions, improve wellbeing and ensure better access for residents and visitors to local businesses and services. Local economies could be further helped through procurement reform. A commitment to make it easier for small businesses to win contracts is a good step, but the Government could go further with a target for procuring from microbusinesses, which would help to unlock an additional 63p of value for every £1 spent with local suppliers.
Further opportunities exist through improving our digital landscape. In that regard, there was a welcome commitment to work with telecoms operators to identify barriers to equipment deployment. We also welcome the commitment to boost Scotland’s data hosting sector, which lags behind that of Wales, but the Government must now set out the industry engagements, timescales and policies needed to make it happen. More important is our need to ensure that the public have both the access and the required skills to use digital services. The Government response said too little on that, so we need to see plans for a sustained campaign covering a wider demographic base, otherwise we risk a digital divide between those who can and those who cannot access new, faster and cheaper services.
The same risk is present in the proposals to boost business engagement by involving business leaders in policy development and increasing representation on public boards. We need to hear more about the leaders and sectors involved, and how small businesses will participate. Private enterprise accounts for almost 80 per cent of jobs, so it is vital that we have as broad a range involved as possible, otherwise we risk having another divide between those with the ear of Government and those without. We also need transparency on potential Government intervention. Building management expertise is sensible, but who decides how and when the Scottish Government takes ownership stakes in private businesses? We are told that the Scottish National Investment Bank will open this year, but when will that be? Will it be ready to invest?
For any of those measures to succeed, the public must have trust in them. We have seen that the British Government’s furlough scheme is straightforward and trusted and is widely successful as a result. Almost 900,000 Scottish workers—a third of our entire workforce—are protected by that UK Government scheme. The focus must be on saving as many jobs as possible. That is the challenge that the Scottish Government faces and that we face, because at the heart of this crisis are real people whose livelihoods are at risk.
I move amendment S5M-22396.1, to insert at end:
“; calls on the Scottish Government to work constructively with the UK Government to ensure the continued success in Scotland of the Chancellor’s unprecedented support measures, which have protected at least 891,500 Scottish jobs, and asks the Scottish Government to recognise and respond to requests from key stakeholders for a detailed policy memorandum outlining the timescales and detailed methodology for the implementation of the proposals in the Economic Recovery Implementation Plan and for Ministers to provide the Parliament with that information at the earliest opportunity.”15:44
I welcome the opportunity to set out the Scottish Labour Party’s response to the Scottish Government’s response to its advisory group on economic recovery.
It is true that signs of life have returned to our high streets, but Aberdeen is in lockdown once again and, here in Edinburgh, the city is a shadow of its usual August self, so let us make no mistake—Scotland is already in economic crisis. This is an important debate, because working people across Scotland are struggling with rising debts and rising anxiety, not knowing whether they will ever have a job to go back to. On top of that, it follows a decade in which working women and men, who depend on their weekly wage, have seen their living standards slide along with their take-home pay and their quality of life.
For those working people, the collapse in the jobs market that we are experiencing is nothing short of catastrophic, so I suggest at the very outset to the cabinet secretary, on the day when the UK economy is officially defined as being in recession, that what is required to avoid a prolonged slump is a radical approach, including a radical use of the powers of this Parliament. That means that we need public investment in infrastructure and education. In a week when we have seen the doubling of the unemployment claimant count and when we know that the UK job retention scheme is being wound down and will be phased out completely in a matter of weeks, people are rightfully fearful about their future, so it is our job to provide hope in place of that fear.
I agree with some of what the member says. Does he agree that we in the UK could do with something like what Germany has done—it has provided a fiscal stimulus package of some €80 billion—but that that would be well outwith the range of the Scottish Parliament?
Most economists agree that the only way to forge a pathway through this, at a time of low international interest rates, is to raise debt in order to invest. That has been the call that the Labour Party has made, not only in Scotland but across the UK.
We are clear that we need a stimulus package; we also need a strategy for industry, a plan for the economy, a plan for jobs and a green new deal, with investment in energy, public transport and forms of construction being prioritised.
We also need targeted interventions to support and revive our manufacturing economy and our arts sector, because the arts not only produce a high economic return, but are the lifeblood of a civilised society. People are looking to us—they are looking to this Parliament—with a renewed sense of urgency, which is why our amendment makes a plea for that greater sense of urgency in the Government’s approach.
We support an urgent review of the fiscal framework. This Parliament needs a better deal to provide the investment that is required. We need to stand up against deindustrialisation and the offshoring of jobs and we need to use all the levers at our disposal to ensure that renewable energy projects and low carbon technologies deliver the maximum number of jobs for Scotland.
We welcome the jobs guarantee for young people. Scotland urgently needs jobs for good, not the low-paid, part-time, short-term employment that is offered by the UK Government’s kickstart scheme. If we are serious about building an economy that is fit to weather the storm ahead, we cannot replicate such a scheme in Scotland.
The Scottish jobs guarantee scheme must offer opportunities not just to young people but to women of all ages who have lost their jobs during this crisis. Investment in flexible childcare is also needed. As our amendment points out, our priority must be to support families across Scotland that are facing financial hardship and who need direct and immediate support now, so we back the calls from across civic Scotland for the Scottish Government to introduce a Scottish child payment equivalent as soon as possible.
Let us reflect as well that when the Scottish Human Rights Commission calls for an independent inquiry into whether the right to life has been breached in our care homes, we must say, “Never again.” Never again should our care system be left so unprepared and never again should our care workers be so undervalued. We believe that care, including childcare, must be a critical part of our future social economy, so we must invest in it now as part of this economic recovery plan.
Will the member give way?
I am in my final minute, I am afraid.
I can allow a little extra time.
Will the member acknowledge that £11 million has been released to nurseries to ensure that we have the flexible childcare that we need now, although he is reflecting on a future prospectus?
I thank the cabinet secretary for that, but many of us are disappointed that the Government took the decision to suspend the implementation of the 1,140 hours scheme, for example. That should have been a matter of priority, socially and economically, and in terms of achieving greater equality outcomes.
It will take courage to follow the path that we advocate. It will take a belief in the importance of democracy in the economy, and that means involving business and trade unions more in economic planning, not just in the construction sector but in every part of the economy.
I have a final word of warning. Of course we support moves to attract inward investment, but if ever there was a time to use the reach of the new Scottish National Investment Bank, Scottish Enterprise, Highlands and Islands Enterprise and the new South of Scotland Enterprise agency to support indigenous, employee-owned and co-operative businesses, it is now. We cannot just talk about a better Scotland—it is our duty to build it.
I move amendment S5M-22396.2, to insert at end:
“; recognises that Scotland needs to make an urgent response to the economic impact of COVID-19, and urges the Scottish Government to bring forward the Scottish Child Payment, invest in flexible childcare and bring forward within the next month a quality job guarantee scheme that provides a living wage and focuses on a green and just recovery, which not only invests in those requiring work but also invests in everyone’s future.”15:51
We have had a number of debates on the economy in recent months, but perhaps this is one of the most important.
The economic crisis brought on by the Covid pandemic is unlike any in our lifetime. It has immediate and longer-term consequences, not all of which are fully in focus yet. As many commentators have noted, it is not only an opportunity to rethink how an economy works; doing so is a vital necessity. That is why this debate is so important, because we now have the report from the advisory group on economic recovery that the Scottish Government commissioned and the Scottish Government’s response.
The motion in Fiona Hyslop’s name is unobjectionable in itself and we will support it, but the fundamental flaw in the approach taken to economic recovery is exemplified by the motion’s reference to delivering “a wellbeing economy”. That is also reflected in the title of the advisory group’s report. However, neither in that report or in the Government’s response is there any clear articulation of what a wellbeing economy looks like and that is why we need to have this debate, not just today but in the months ahead.
The advisory group’s report is not a plan for transformational change in our economy. Indeed, it contains nothing that would be out of the ordinary in normal economic times. The Government’s implementation plan opens by saying that the report
“validates our overall strategic approach”.
In other words, we are already doing what the report suggests we ought to be doing. That is not consistent with what Fiona Hyslop indicated to Parliament when she said that we need
“a revolution in economic thinking that stimulates and values co-operative sharing of risk and reward”.—[Official Report, 26 May 2020; c 32.]
I thought that that was very well put, but we are far from achieving that. Such a revolution in economic thinking would include tackling growing wealth inequalities, rentier capitalism, the excess returns to capital over labour, ownership and governance of the economy, and housing insecurities. None of that is mentioned in the advisory group’s report or the Government’s response. Much of the implementation plan merely restates existing funding, announces reviews, promises to speed up existing work and tinkers at the edges. There is little that is genuinely new that matches the scale of the crisis.
That contrasts markedly with other reports on green recovery. For example, last month’s report from the climate emergency response group contains plans that are more practical and more radical, such as zero emissions cities by 2030 via vehicle regulation, retrofit buildings, rural jobs creation and so on.
The debate that we need to have is about what a wellbeing economy looks like and how we get there. Fortunately, we have some expert advice to hand from the Wellbeing Economy Alliance, which is an alliance of more than 100 groups across the world.
A wellbeing economy is designed for a different purpose from that of the current economic paradigm. It is designed explicitly to serve people, communities and the planet, and its non-negotiable principles are dignity for all, a restored natural world, institutions that serve the common good, fairness, equality and radical democracy.
The obvious lessons for the current crisis would include, for example, an overriding commitment to ensuring that people have security in their own home, given the precarious and insecure lives that so many families currently face in the private rented sector. There is nothing on such questions in the Higgins report or in the Government response, and nothing on how to reduce the cost of living, through measures such as rent controls, for the Covid generation of young people who are already struggling with high debt, high rents and energy and transport costs.
Underlying our concerns are long-standing questions about the role of economic growth and how it is measured. In an ill-advised interview with The Times newspaper last week, Benny Higgins made some outlandish claims, which included describing Friends of the Earth Scotland and certain parts of the green movement as
“ideological zealots who would throw economic growth and jobs under a bus”.
To characterise the movement in that way when it is at the forefront globally of charting a new economic paradigm is not only lazy, but profoundly ignorant. I am sure that Fiona Hyslop would agree, given her injunction in her opening speech to avoid name calling—in which, incidentally, our amendment does not engage.
In the same interview, Mr Higgins went on to claim that:
“A wellbeing economy needs growth to pay for itself.”
Again, that is utter nonsense. Growth as it is currently being pursued and measured is not necessary. The world has sufficient capacity, wealth and assets to enable everyone to enjoy a basic and secure livelihood, but people do not do so because the ownership, control and distribution of that wealth is unequal.
Mr Higgins went on to say that companies such as BP are
“well capable of responding to environmental change and delivering wellbeing”,
even though such companies have been the main drivers and deniers of climate change, which has eroded the wellbeing of millions of people across the planet.
In our view, it is time for the Government to part company with Mr Higgins. He has undertaken some good work around the Scottish National Investment Bank, but his recent comments do not befit a Government adviser. I am thinking not only of the comments that I have just rehearsed, but of his unhelpful—and, to be frank, sexist—remarks in a Holyrood magazine interview in which he compared the First Minister’s style unfavourably with that of her predecessor.
There have been many strong critiques of the advisory group, including from the Scottish Trades Union Congress, Engender, Friends of the Earth Scotland and the just and green recovery for Scotland campaign. This debate is far from over. Greens are fundamentally opposed to the assumptions that underpin the economic prospectus in front of us today. Our amendment explicitly rejects the advice of ideological zealots who put GDP growth ahead of addressing inequality and the climate emergency, and makes a specific call to scale up home energy efficiency programmes.
I move amendment S5M-22396.5, to leave out from “, and calls for” to end and insert:
“; welcomes the job guarantee scheme, which has been needed since before the COVID-19 pandemic; recognises the need for the COVID-19 recovery to focus on building a fairer, greener and more equal wellbeing economy; believes however that these goals require clearer definitions and political will, which have not been shown by the Advisory Group on Economic Recovery; considers that those who put GDP growth ahead of addressing inequality or the climate emergency are ideological zealots whose advice should be rejected; notes the enormous potential to create green jobs and cut emissions by supporting the energy efficiency sector, and calls on the Scottish Government to immediately commit specific resources beyond the 2020-21 budget to scale-up existing home energy efficiency programmes, as promised by the First Minister.”15:57
I am sure that the devastating images of the flooding across Fife and the east coast of Scotland overnight will be on the economy secretary’s mind today. Some businesses were already teetering on the edge of survival and this might push them over the edge, so I hope that she will be receptive to any appeals from companies that are dealing with the devastating impact of the floods. Many communities in my constituency have been directly affected by the colossal amount of water that came down from our skies overnight.
We have seen today the visual representation of the recession; the plunge in GDP is quite astonishing. There is a new scale for the graph these days because the recession is so deep. That should be a warning to us all that the impacts of the current situation are far-reaching and devastating. One in 10 people could be unemployed by the end of the year, and that situation could last for something of the order of three years. The impact on young people will be even more substantial, causing the scarring that everyone is talking about. In many cases, supply chains are stuttering and broken, and we will need to spend quite a lot of time getting them back up and running again.
At the same time, we need to try to shape something new. Some businesses will not survive, some sectors will diminish and new sectors will come along. Our strategy must be to ensure that we shape the transition from one type of economy to the next, while ensuring that we protect individuals from the worst of the recession.
We must not try to pay off the massive economic and financial investment that we have made in recent months in a short period of time, as that would crush any economic recovery. We need to make sure that we invest wisely so that we get a sustainable, fair and just economic recovery. We need to invest in the skills and talents of our people through education and good health, mental as well as physical, because our people are the best talents that we have. We must make sure that we bring about economic recovery fairly and justly so that people get a good wage for a good job and can have a decent house for their family and their future.
In addition, we must make sure that the economic recovery is environmentally sustainable and that we do not pillage the environment for the sake of a few cheap jobs. It must be sustainable and fair, and it must invest in the skills and the talents of our people. That is what Liberal Democrats are seeking.
The problems that we had with the economy were deep rooted before the pandemic came along. Scotland’s notoriously poor low productivity levels were improving, but only marginally. Significant change will be required in that respect as we move out of the recession.
It is madness to go ahead with Brexit at this time. That will compound the problems that we have with the pandemic and the existing deep-rooted problems in our economy. Breaking ties with our closest economic partners at this time is madness. We ought to be combining forces so that we have negotiating power, so that we have good standards across Europe and so that we can trade freely from Auchtermuchty to wherever it is in Europe that we want to trade. Those should be our priorities.
It would be equally unwise to proceed with an independence agenda, for exactly the same reasons. I hope that the Scottish National Party reflects on that, because the last thing that we need is even more turmoil.
I want to praise the Scottish Government, councils and the enterprise agencies for their response to the pandemic. The schemes that were set up in a very short space of time were impressive. Many people got lots of support just when they needed it, which allowed them to keep their companies and their livelihoods.
However, many are still being left behind. I praise my colleague Jamie Stone for leading the campaign at Westminster for the excluded—those who have been left behind and forgotten. I am talking about the many freelancers and self-employed people who have received no support from any of the Government schemes, whether of the Scottish Government or the Government at Westminster. We still need to do something for them, because we cannot afford to leave them behind.
Being left behind is something that we wanted to be addressed by the universal basic income. Such a comprehensive financial support scheme would have underpinned other support mechanisms at a time of great need. I was disappointed that although Benny Higgins’s report is a serious piece of work, it lacked ambition in many areas, especially on a universal basic income. I was disappointed, too, that the Cabinet Secretary for Economy, Fair Work and Culture did not really fight for a UBI. She did not mention it today. I know that talks on the issue have been held with the Westminster Government, but I get the sense that the Scottish Government is a bit half hearted about it. Now would have been a great time to try out a UBI but, sadly, the opportunity has been missed.
On early learning and childcare, it is a great disappointment to me that the Government seems to have taken the pressure off local authorities to deliver the improvement in provision early. I know that it could be delivered in less than a year, but the sense is that the pressure is off, just at a time when people need extra investment to be made in early learning and childcare. We know that that is the best investment that we can make for children’s futures, but it also helps to get people back to work.
On the centralisation of the enterprise agencies, now would be a great time to get back to the great power of the Highlands and Islands Development Board, because we need regional power, as is stated in Benny Higgins’s report. That is why I urge the Government to get back to investing in the enterprise agencies, to make sure that they can bring about real change in their communities.
I move amendment S5M-22396.3, to insert at end:
“, and believes that cross-party consensus will be easier to build if Scottish ministers reverse their decision to halt entitlement to expanded nursery schooling for a whole academic year, take clearer steps to reverse the decade of centralisation of enterprise agency work and provide the formal estimation of the amounts paid by the UK Government directly to people in Scotland under furlough, unemployment benefits and other COVID-19-related payments, as agreed by the Parliament on 23 June 2020, in order to give a better assessment of the resources both required and available to support people.”
We move to the open debate. I ask for speeches of five minutes, please.16:04
The times in which we live present probably the greatest challenge that all of us here will face in our lifetimes. The coronavirus has swept across the world like a tsunami; it has caused the loss of almost a million lives so far, and it threatens to wreck economies across the world.
What we do now must put in place the basis for our country to recover from the virus’s threat to both our nation’s health and its economic wellbeing. In a sense, we have to build new starting blocks and think differently about economic recovery in order to protect and support the businesses and public services that we have and to create the possibilities for recovery that our young people are depending on us to get right. Of course, we cannot do so alone: if we are to get through this we must reach out to our partners across the world.
Speaking from America to yesterday’s meeting of the Parliament’s Economy, Energy and Fair Work Committee, Professor David Blanchflower said that economic unrest in that country is growing and that the prospect of a generation of young people being cast aside to unemployment is too high a price to pay. He said:
“We should throw everything that we have”
at the issue
“including the kitchen sink and maybe the kitchen as well.”—[Official Report, Economy, Energy and Fair Work Committee, 11 August 2020; c 33.]
He described the situation almost as though it were an economic war, in which we must take all possible measures if we are to win.
Here in Scotland, such work is already under way. Publication of the recommendations of the advisory group on economic recovery in June, followed by the enterprise and skills strategic board’s priorities for immediate action, have given us four clear areas to work on.
First, we must help businesses to retain what they have. Principally, the £2.3 billion-worth of direct support for businesses in Scotland has been crucial in helping to save many from going out of business. A range of mechanisms has been put in place to help them to find additional support.
Secondly, we must support people facing redundancy as a direct result of the pandemic. A package of work is being undertaken to ramp up support from initiatives such as partnership action for continuing employment. That will be needed especially if, as is expected, the UK Government withdraws its job retention scheme. We are going to need substantial resource to help people who will be affected by that.
Thirdly, our focus should be on training, upskilling and helping people to make the transition into new employment. Skills Development Scotland is working on schemes to extend the apprenticeship and graduate apprenticeship programmes, and the Scottish Funding Council is working with our universities to provide short reskilling courses. A number of digital initiatives are also in place. For example, BT is working with the Scottish Government to offer digital upskilling for many of our SMEs.
Lastly, following the strategic board’s four key recommendations, work is being done to help our most vulnerable people into jobs. Funding worth £50 million will help around 20,000 young people in that way, as well as extending the fair start initiative for another two years. This year, investment worth £33 million is being made in employability services—including no one left behind—that will help people of all ages to overcome barriers to employment.
Presiding Officer, as you know, I have been advocating for digital and software skills to be given higher priority in our economy. Perhaps the pandemic is pushing us faster in that direction. BT’s helpful members’ briefing for the debate shows us that nearly half of all small businesses have moved online. More than a third are planning less face-to-face contact in their work and more than a third now see digital skills and tools as a key focus.
The digital revolution is the fourth industrial revolution to have taken place. With the right infrastructure, connectivity and skills, Scotland can be a real leader in the sector—much as we are in renewables. It is therefore crucial that the Government’s artificial intelligence strategy embraces all that and fully exploits the potential of 5G as quickly as possible.
In previous debates I have mentioned that the value of the digital single market in Europe alone is around €400 billion per year. Setting aside the UK’s silly decision to walk away from that, we need to position Scotland so that we can contribute to and benefit from that market.
What more can Governments do, and what more can we do? Governments probably need to borrow more money to see us through the crisis—to protect not only our present but our future economy. Scotland needs the same borrowing powers as any other normal country. Perhaps we could bring forward already agreed programmes of work in areas such as construction and regional growth deals, bearing in mind that that money is already committed. We could also speed up our planning processes to encourage faster development. We need more people with digital skills and the creation of more digital spaces to encourage new companies to emerge and to innovate.
Above all, though, we need to be willing to change how we do things and not be afraid to try out new ideas. As members, we need to work together to get through the crisis and to ensure that Scotland’s future economy can be one that thrives and provides opportunity for everyone.16:09
My colleague Maurice Golden said in his opening remarks that there is cross-party consensus on the objectives that are set out in the Scottish Government’s response to Covid. We agree that we need to achieve a green recovery, address rising unemployment—especially for younger people who are entering the workplace—and focus on a wellbeing economy.
However, there is a fundamental flaw in the Scottish Government’s response. The Government has again failed to articulate any road map or detailed policy guidance on how we can achieve those positive destinations. At yesterday’s Economy and Skills Committee meeting, both the Scottish Chambers of Commerce and the Federation of Small Businesses gave evidence that the plans lack the necessary detail and finance that are required to make a real impact. Benny Higgins said yesterday that the Scottish Government needs to act with urgency, but when we look at the policy proposals, no time scales are set out by the Scottish Government on when its plans will be implemented.
Without that detail, finance and urgency, this policy response represents a significant wasted opportunity.
Dean Lockhart heard in my opening remarks about the rapid response that we have had in a number of areas. We have invested £500 million in our economic stimulus and the immediate measures to deliver the recommendations. Many of the time scales are in the annex, which shows what we have already done since lockdown and what we are doing now. Our programme for government will set out the rest. That detail is fully available and we will make sure that the Conservatives are given the detail that they are asking for.
Now that we are six months into the Covid crisis, I look forward to getting an update from the cabinet secretary with regard to those time scales.
What the policy review should have been about is refocusing policy to recognise and respond to the new economic trends that are emerging from Covid-19. The revolution in online trading and business is an opportunity to build a vibrant digital economy in Scotland, which Willie Coffey referred to, by helping thousands of Scottish businesses to move online. That is why the Scottish Conservatives have called for the establishment of a e-commerce task force to help firms, large and small, across Scotland to move their businesses online. It would involve digital teams from universities, colleges, the private sector and digital graduates who may not otherwise be able to find employment at this time.
The need for Scotland to rapidly increase the level of online trade and e-commerce was apparent even before the crisis. According to Nora Senior, the chair of the enterprise and skills strategic board, only 9 per cent of Scottish firms embed digital in their operations, compared with 43 per cent in competitor countries.
There is also an opportunity for the Scottish Government to respond to the new supply chains that are emerging in the Covid aftermath. The value of the UK’s onshoring market before the pandemic was estimated to be around £20 billion a year, but that market will grow rapidly in the months and years ahead. The Scottish Government needs to tell us urgently how it will respond to the opportunities that will be created by the new onshore supply chains.
There are 32 Scottish trade offices around the world, but there is only one for the rest of the UK, which is remarkable because the rest of the UK accounts for 60 per cent of our trade. If we were to increase trade between Scotland and the rest of the UK by 5 per cent, it would bring about an extra £2.5 billion in GDP and create thousands of new jobs. One of the Government’s priorities should be to create and establish a series of Scotland and rest of UK trade offices in key regions across the UK to boost that internal market—we call on the Scottish Government to action that.
There is also an opportunity to explore new export markets for Scotland’s excellent produce and services. The Scottish Government could do it by creating a new virtual network of global Scots to sit alongside the actual global Scots network.
Fiona Hyslop rose—
I appreciate that the cabinet secretary is about to say that that is work in progress and that she has been working with the Scottish Chambers of Commerce to help with their virtual road shows and networks, but I must continue.
All the policy measures that I have just suggested are in the existing powers and budget of the Scottish Government, but none of those new economic trends have been addressed in the Scottish Government’s policy response, which is all the more inadequate when we look at what the UK Government has achieved in the same period, saving 900,000 jobs across Scotland and delivering more than £15 billion of emergency funding to Scotland.
As part of its response to Covid, the Scottish Government has asked for more borrowing powers and more money from Westminster, but we consider that to be merely a constitutional distraction. The Scottish Government should instead tell us urgently how it will use its existing budget, including the £500 million allocated to the Scottish National Investment Bank, to help firms survive and save jobs.
I say genuinely to the cabinet secretary that, when calling for more money from Westminster, the Scottish Government should reflect on having lost £500 million in the past year alone through investment write-downs, cost overruns on two ferries and on various other public sector projects. That £500 million could have gone a long way to save firms and jobs across Scotland during the crisis.
I support the amendment in Maurice Golden’s name.
Members will notice that I have allowed a wee bit of time for interventions. There is still a wee bit of time available for those, but please do not take advantage. You could all learn from the display of Dean Lockhart’s psychic powers that we saw earlier.16:15
I have said quite a few times in recent months that we are experiencing a triple economic assault in the north-east of Scotland: Covid and lockdown; a low oil price; and a looming Brexit.
The first of those threats is unavoidable. Covid is not anyone’s fault, and the Scottish Government has done what it can with the powers and resources that it has to mitigate the effects for many businesses.
The second threat is, to be frank, partially self-inflicted. We have been here a few times before—the north-east economy’s decades-old reliance on oil and gas makes us extremely vulnerable to geopolitical and market shocks. We need to speed away from that reliance, justly transitioning to low-emission technologies and fuels and ensuring that sustainable jobs are the future for my constituency.
The third assault—Brexit—is not of the making of the people of Aberdeen and Aberdeenshire either; they overwhelmingly voted against it. Members will have seen last month’s study by the University of Warwick, which says that the cost of Brexit is already the equivalent of £9,000 per person in the north-east.
Thankfully, there are routes out of all those threats to our economy. The Brexit catastrophe has a constitutional escape hatch, which we need only unlock—but that is for another day. The Covid situation has further exposed the flaws of the fiscal and borrowing power-sharing arrangements between the UK and Scottish Governments, and a strong case can be made for the Scottish Government to have the same powers that are available to other European nations—John Mason mentioned Germany in that regard—which are borrowing money to fund their economic recovery.
I turn to the just transition element, which I consider to be the most important solution to the particular economic issues that the north-east faces. The north-east can be the nexus of the green recovery. We already have a workforce with transferable skills, which makes it ideally placed to lead the transition from fossil fuels to low-carbon fuels and technologies.
New and emerging technologies are being worked on in the area, particularly in our two universities, the National Decommissioning Centre in Newburgh and our Oil & Gas Technology Centre, which I have long argued should be renamed the future energy centre, because of its work in supporting all types of energy innovation.
I recently met our colleagues at Opportunity North East, Scottish Renewables and the Aberdeen and Grampian Chamber of Commerce, which are all speaking with one clear voice on what needs to happen. Their messages to elected representatives and asks of the Scottish Government are that skills funding and training avenues that can enhance the existing skills of the oil and gas workforce in relation to renewables and low-carbon technologies must be a priority for the area. They are also clear that investment in the skills to prepare young people to be the workforce of not just the immediate green recovery but the sustainable Scotland of the future should be our number 1 priority.
We need substantial investment in and a focus on providing careers that would not be susceptible to global economic shocks of a fluctuating market. That will lead us to a low-emissions Scotland. The organisations will be pleased with what the cabinet secretary said today about the youth guarantee.
The cabinet secretary has outlined the substantial stimulus investment that she has already made, with particular support given to the north-east in the past couple of months, which is welcome. However, we as a nation need the borrowing tools to invest more where it is needed strategically for the long term. We are, as always, pushing a stone up a hill, with so many levers on energy being reserved. The UK Environment Bill is only just under way and well overdue.
The UK must take immediate action on degasification of the grid, and have emissions targets that at least match our own, if we are to succeed.
In Scotland, and the north-east in particular, we have a small window of opportunity—which is closing rapidly—to be world leaders and develop and export emerging technologies and low-emission fuel products to other countries. I point again to Germany, which sees Scotland as a potential supplier of the hydrogen that it is changing its systems to take as it transitions.
Reskilling and ensuring a change in tack in the career paths of young people will take many forms; there is no single solution. However, in conjunction with the educators, innovators and employers in my area, we can focus the transition of training into ensuring that the north-east stays the energy capital of Europe, but a sustainable one with our climate change goals at the centre.
In the last couple of seconds before I sit down I will make my final point, which is that we should lock in the remote working flexibility of the pandemic. I have long argued that flexible and agile working means less commuting, fewer emissions and less stress, and more trust in the workforce. We cannot go back to the pre-pandemic inflexibility that has played a real part in maintaining the stubborn gender pay gap in this country.16:21
The news today that the UK economy is officially in recession is no surprise to any of us. Huge numbers of people have lost their jobs and many more are at risk. Women in particular have lost their jobs, and it is vital that as we come out of the pandemic we build back better. That is why Scottish Labour has this summer been campaigning for a quality jobs guarantee with a living wage, and for action to get young people the skills and opportunities that they need to make the most of their talents.
We need to see more leadership from both the Scottish and UK Governments, so that financial support and investment in our economy delivers multiple benefits, with equality and fairness at the heart of all the investment that is made with our money.
I believe that the Scottish Government needs to act, in particular, on the recommendations that were made by the STUC to target investment in strategic economic assets and deliver fair work conditionality in grants and contracts. That would benefit many people across Scotland. It is good that our bus industry has been given support from the Government. However, we could still see stronger accountability at local level, influenced by our local authorities.
Although the advisory group on economic recovery framed its report around the wellbeing economy and proposed that action on climate change be woven throughout the Government’s actions, I agree with Andy Wightman that it did not give clear leadership in its own recommendations. However, many other organisations have come up with really practical, sensible solutions.
The climate emergency response group highlighted eight specific areas in which investment would create jobs and tackle the climate emergency at the same time. I cannot go through them all in the time available, but I want to highlight a couple. The cabinet secretary mentioned the expansion in renewables and community heat projects that we need to see. That could create thousands of jobs in Scotland, but we need to deliver the manufacturing jobs so that those progressive movements can take place, and that is not currently happening. The Scottish Government needs to use its leadership to deliver the extra manufacturing jobs that would come if we saw the community heat and renewables expansion that we need.
Another example is investing in retrofitting homes across the country to eliminate fuel poverty and lower carbon emissions: a win-win. It is estimated that that could create 6,000 long-term jobs. However, we need the certainty, political commitment and contracts to deliver it right across our communities. I am glad that low-carbon skills have been mentioned. However, we need a much more coherent approach.
A couple of people have mentioned retail, and Richard Leonard mentioned the fact that Edinburgh is quiet this summer. There is an issue about the loss of retail and hospitality jobs; they have either gone or are potentially very vulnerable. Our councils need to be financially supported so that they can take the lead locally to regenerate our town centres, work with local businesses and build back better. I believe in using community wealth-building principles and ensuring that we support women and young people; who are both vulnerable to the loss of jobs in those sectors.
I agree with Gillian Martin that we have seen some positives over the past few months, including more flexible home working and increased digitisation. However, many businesses are struggling to get back on track, particularly in the arts sector, so retaining existing jobs must be our priority.
Yesterday, I raised the viability of leisure centres around Scotland; the issue came up at First Minister’s question time today, too. There are 4,500 potentially vulnerable jobs in the sector because of the lack of viability and sustainability of many of our leisure companies. I am told that young people are in the demographic that is most likely to be made redundant first, so we need support now to prevent that happening.
Today provides a good opportunity for us to focus on what we can agree on, and there is clear agreement around the chamber that we need a wellbeing economy. The issue is how that is delivered, what practical measures are required and how we ensure that every pound that is spent, whether by the UK or Scottish Government, delivers multiple benefits. The climate crisis has not gone away and good career-centred jobs for young people will not just appear, so we need action and leadership.
The Labour amendment calls on the Scottish Government to
“bring forward the Scottish Child Payment”
and “invest in flexible childcare”. That will be absolutely crucial in ensuring that our recovery does not see women losing out further; they need to be able to get back into the labour market and not be pushed out. There is huge inequality and we must challenge it. Investment in childcare frees women to work and presents an opportunity to create good-quality jobs. Our support for young people growing up in Scotland enables parents to get back to work once their kids are at school.
I am struck by the level of agreement in the chamber about investment in low-carbon jobs and training and long-term investment that delivers good-quality jobs that enable people to afford to live. That support is not just in the chamber but out in our communities.
We need a transition, so I hope that the Scottish Government commits to not just listen but act. A lot of key actions need to be taken, and building back better means that the Scottish Government is in pole position. I hope that the cabinet secretary is listening to us, that the programme for government acts on those key principles and that we see the results that our constituents desperately need.16:27
I am pleased to speak in the debate and to hear from the cabinet secretary her recognition of the need for a wide-reaching and comprehensive action plan to tackle the economic crisis that we face as a result of the global coronavirus pandemic.
On the generality of the response, I commend the clear determination of the Scottish Government to focus on a jobs-based recovery, and to pursue an “All hands on deck” approach, with Scottish Government agencies working alongside employers, trade unions and the third sector. It is quite clear that the scale of the Covid-19 economic challenge requires recognition by us all that we cannot proceed with approach that is business as usual.
Of the specific proposals that have been put forward, I will focus on youth employment, which is a subject that is dear to my heart. I commend the increased financial commitment of £60 million for youth employment, which we have heard about today from the Scottish Government. I understand that it will support some 20,000 young people in employment, through the job guarantee scheme and other measures.
I am aware of the work of Sandy Begbie in looking at the detail of the scheme’s implementation, and I know that he is working alongside employers, local authorities and third sector and youth work organisations. I also know that local Developing the Young Workforce groups, including the group in Fife, have been asked to feed in their ideas and suggestions.
Given that the Scottish Government has accepted all 25 recommendations of the economic advisory group, it is clear that the youth job guarantee scheme must involve sustainable jobs, with opportunities for training, apprenticeships and the possibility of progression in the job, and must not be just a box-ticking exercise. That will be a key measurement of the success of the scheme. I ask Mr Hepburn whether he will, in his closing remarks, confirm that the Government’s commitment to that approach is in place, which is my understanding. If we do not get that right, we risk leaving behind a whole generation, which I am sure would be as unacceptable to the Scottish Government as it would be to me.
I take the opportunity to welcome the additional £10 million that is to be invested in measures to recruit and retain apprentices, which we have heard about this afternoon.
That key focus on youth employment, together with the determination to work more closely with business, to maximise the economic impact of public procurement and to invest in digital capabilities, will be essential to ensuring business recovery and to ensuring that we transition to a resilient and sustainable wellbeing economy.
As welcome as the action plan is—with more detail to be fleshed out in the weeks to come, as is mentioned in the programme for government—there are two key elephants in the room, both of which stand at the door of the UK Government. First, the Benny Higgins report called for acceleration of the review of the fiscal framework that governs financial relationships between the Scottish and UK Governments. It is vital that that happens because, at present, the UK Government continues to refuse to rise to the economic challenges of the scale of those of Covid-19. Therefore, the effects of whatever action we take here will be hampered.
We have seen that calls for the UK Government to extend the furlough scheme into 2021 are being ignored. There have been calls for the UK Government to come up with a fiscal stimulus package that is commensurate with the level of need—for example, to the level of stimulus in Germany, where 4 per cent of GDP has been put forward. The UK has a fiscal stimulus package of £20 billion; in Germany, £80 billion is on offer.
If the UK Government will not act, it risks a veritable tsunami of job losses, and a return to Thatcherite 80s levels of unemployment. Many of the communities in my Cowdenbeath constituency still bear the scars of those years, which is entirely unacceptable. If the UK Government will not act, the necessary powers must be devolved to the Scottish Parliament so that we can act.
The second elephant in the room is Brexit. The UK is now in the deepest recession of any of the G7 countries, with a 20 per cent drop in GDP, and the Brexit shambles is looming at our door. It must be put on hold. Even in the best of economic times, it would represent madness, but in the worst of times, during a global pandemic, it is ideologically driven self-harm on a massive scale.
It is clear that there is no union dividend for Scotland; rather, there is a growing union deficit. That is increasingly being recognised, as is evident from an opinion poll that was published today that shows, yet again, that a majority are in favour of Scottish independence. It’s coming yet.16:32
Prosperity and wellbeing for all who live in Scotland, whatever their age and wherever they live—remote, rural or inner city—and the health of our planet, must be our collective quest.
What does that mean? As Richard Leonard’s amendment highlights, we must
“bring forward ... within the next month a quality job guarantee scheme that provides a living wage and focuses on a green and just recovery”,
which, the amendment stresses,
“not only invests in those requiring work but also invests in everyone’s future.”
There must be multiple benefits for our communities in terms of good job opportunities and for our health and wellbeing, while tackling the climate emergency.
Across the chamber and far beyond, we are showing that we are not afraid to learn lessons from how so much has changed during lockdown, while we have faced the dreadful challenges of Covid. From the STUC to the just and green recovery for Scotland group, to name just two from among many, there are robust calls for new actions.
I welcome the range of Scottish Government stimulus and support. As the cabinet secretary said, we have a precious chance to do things differently. We can do that by creating projects to insulate our urban and rural homes; by tackling the scourge of fuel poverty and addressing climate change in a oner, thereby creating new jobs; and by taking action to plug the gaps in a national ecological network or Scottish nature network. We could do it by creating a framework to make investments in nature; by delivering on climate, biodiversity and wellbeing, thereby creating jobs that would often be in very rural areas; by fairer use of road space through building safe active travel routes and using low-emissions buses to be run by municipally owned companies; and by creating healthier living places with cleaner air and less congestion, which would also bring more new jobs.
Much of that needs the guidance of the robust just transition commission, and for it to continue to make recommendations, building on its work so far across all sectors. I stress the word “all”. Its final report is due in March 2021. Scottish Labour continues to call for the JTC to be there for the long term to underpin a fair way forward to net zero. I hope that the Scottish Government will act on that quickly, to give reassurance.
The JTC must contribute to policies, many of which are economic, in our updated climate change plan. For the economy really to have people and the future of the planet at its heart, there must also be targeted support for particular people-centred models, two of which I will briefly highlight today.
The first is community wealth building, which is the strategy that is being developed by North Ayrshire Council. Its leader, Joe Cullinane, explains that the aim is
“to shape a new collaborative, inclusive, sustainable and democratic local economy”
and says that
“This new partnership between the local public sector, the community, locally owned businesses and trade unions will ensure we take back control of our economic landscape.”
Joe Cullinane has also said that
“Across the five pillars of ... Procurement, Workforce, Land and Assets”
—which I stress—
“Financial Power and Plural Ownership—we have ... an intentional approach”
to build a new economy.
Secondly, I will highlight the co-operative model. I am clear, as a member of the Scottish Co-operative Party parliamentary group, that across all sectors—from farming to housing to finance and more—member ownership, in which people matter, should be more common, and merits active support by us all. In my region, the New Lanark world heritage site is an iconic historic example of the co-operation that the model embodies. I welcome initial Scottish Government support for it, and we should all help to ensure its sustainable future for the nation.
Conditionality—in this respect and in all financial support—must be robust. The Scottish national investment bank is a good model of that.
On skills, it is important to say that every report has emphasised how essential it is that we get strategic development of skills right for the future, thereby creating a skilled workforce that must be paid well.
We must also look to alternatives to GDP that measure prosperity for all in a meaningful way.
We should, of course, all work together. We might reflect on Labour values of solidarity and fairness across Scotland, the UK and globally. The Prime Minister was photographed in a hard hat again yesterday. For all the UK Government support that is coming for Covid, he is often a builder of barriers. His Government is dismantling the Department for International Development in East Kilbride, which brings consequential instability for the people who work there, including people in my Clydesdale constituency.
Enshrined in our Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 is a commitment to assess the impact of our actions on the global south. That is, of course, acknowledgement of the stark reality that we have a responsibility, as a developed nation, to recognise that those who did least to create the dangers of climate change are now suffering most from its effects. That goes beyond climate change action and the importance of the climate justice fund.
As we face the challenges of coming out of Covid here at home in Scotland, we must never forget to take our international responsibilities with the utmost seriousness, in relation to making fair economic decisions, as we support everyone here in Scotland.16:38
I thank the Presiding Officer for the opportunity to take part in today’s debate. I welcome the Government’s response to the advisory group on economic recovery and I will touch on some of the points that are raised in that response.
In the section on public finances and economic recovery, the point is made that
“UK public sector net debt rose to £1.98 trillion, or 99.6% of GDP, in June 2020”
and that the OBR forecasts that the UK’s fiscal deficit will reach
“between 15% and 23% of GDP in 2020-21 ... the highest peacetime level in 300 years”.
Those are serious figures, and the Government’s response also states that
“the OBR has warned that in the longer term”
the UK will need
“to return the public finances to a sustainable path.”
I very much agree with that.
The UK has acted reasonably well during the pandemic in areas such as the furlough scheme and business support. However, it seems that we are failing in comparison with countries such as Germany by not carrying out enough of a fiscal stimulus, which for us would involve £80 billion.
I move on to some more specific recommendations and responses. I will not mention all 25 recommendations, and I congratulate the Government on having produced 26 responses.
Recommendation 1 is about the review of the fiscal framework. I very much agree that immediate improvements could be made, including agreeing temporary borrowing flexibilities, as other countries have done for their devolved Governments. I also very much welcome the commitment for the Parliament, not just the two Governments, to be involved in the full review.
Recommendations 2 and 17 both mention the Scottish National Investment Bank. Infrastructure investment has to be one of the ways out of this Covid upheaval, and I welcome the commitment to publish the infrastructure investment plan next month. Housing is mentioned in that regard, as is absolutely right. By focusing on infrastructure, we can spend money and create jobs, while building housing and other assets that will last long into the future.
Recommendation 4 refers to ownership stakes. That is quite an intriguing area as, in recent years, public stakes in private businesses have been the exception rather than the rule. However, it seems to be quite normal in other countries and I see no reason why it should not also become more normal here. Perhaps public ownership within industries would be one of the ways of building a better relationship between industry and Government.
By any stretch of the imagination, many businesses have had a very generous deal in recent months, from both the UK and the Scottish Governments. Businesses that used to complain bitterly about Government interference and taxes were suddenly only too keen to accept Government interference by way of furlough schemes and grants. I hope that businesses will have a better understanding of why both local and national Government need to raise taxes, introduce proper living wages and take other equality measures.
Recommendation 9 talks about conditionality in business support. That links with the previous recommendation that I mentioned. In the past, there has been a feeling that both Scottish Enterprise and HIE could be too keen to get investment in at almost any cost; issues such as a good staff gender mix and limited disparity in pay have not always had the focus that they deserved. There have been improvements, but there is further to go, and now is a good time to restate our commitment to those principles.
Recommendations 9 and 13 both refer to some kinds of tax cut. Mentioned are rates relief, a targeted reduction in business rates, and a reduction in VAT. I accept that those can certainly have their places, especially if they are temporary and targeted, but we have to remember that a tax cut in one area means a cut to public services in another. Given all that our national health service and care sector have been through lately, I would not want to see their budgets being reduced in order to fund tax cuts for businesses.
Recommendation 15 is about adult social care, which I think Richard Leonard mentioned. That is a huge issue, which has been brought to the fore by the pandemic. I suspect that we will in the future return to it in more depth.
My own mother is in a care home that—somewhat to my surprise, I have to say—has not had the virus so far, and, happily, she is still with us. I hope to see her on Sunday, for the first time since March. In general, care home staff are not well paid and, whether those homes are in the public, private or third sector, we need to look at better pay. Better pay means higher costs or fees, and higher costs and fees mean higher taxes. I do not see how we can avoid that.
Recommendation 22 mentions apprentices. We have an increasing variety of apprenticeships, and I firmly believe that that can be the best route for many of our young—and some of our older—people. In the past week, we have been very focused on academic results in our schools, but we should re-emphasise that bright futures are available even without a range of highers at grade A.
Recommendation 26 is about equalities and human rights. I welcome the inclusion of that commitment. We have to deal with some of the huge inequalities in our society. There is no point in growing the economy if all the rewards go to the rich few. Whether we grow the economy or not, we have to see a fairer sharing out of our income and wealth, as we start this new stage in our journey.16:44
I alert members to my entry in the register of members’ interests.
The coronavirus pandemic is something that no living person has ever experienced before but, sadly, the experience of this debate is all too familiar. First, the cabinet secretary’s promise to respond to the advisory group’s report by the end of July was broken. Then, it was slipped out under the cover of John Swinney’s education disaster and the lockdown that was imposed on Aberdeen, which was caused principally by the failure of the Scottish Government’s supposedly world-beating tracing programme. The irony of Fiona Hyslop highlighting the investment in that programme—in bold, in paragraph 3 of the response document—as some sort of Scottish Government achievement will not be lost on those of us living in the north-east.
Like many other people across Scotland, many of my constituents in Aberdeenshire West have been working from home for more than five months. One oft-repeated issue is the need for better broadband across Scotland, particularly in rural areas. The reaching 100 per cent—R100—programme was promised to be delivered by 2021, yet we now face another delay, with the north-east contract still not awarded and the programme not due to be completed until 2023. It is simply not good enough for the SNP to blame that on the pandemic, as those targets have been in place for many years. This may be the week when SNP ministers should resign, but it was Fergus Ewing himself who said that he would do so if the R100 was not delivered by 2021.
The Government identifies this issue itself. On page 18 of its response, it notes that
“every public pound invested in broadband in Scotland delivers nearly £12 to the Scottish economy”.
The briefing from BT—[Interruption.] No, I will not give way—sorry.
The briefing from BT makes the call that
“efforts to ensure that the population is equipped with the necessary skills for the future must be an immediate priority”.
Why, in the Government’s response, are we not seeing an acceleration in such investment?
The FSB has pointed out that
“action to address both patchy broadband infrastructure and the dearth of digital skills have been on the agenda for many years ... what we need to see is some detail about how policymakers will actually achieve these outcomes.”
Instead, we get another digital planning strategy—this one to be published in November—to add to the ever-growing list of plans, consultations and reviews that are the substitute for action, delivery and outcomes under this talking shop of a Government.
On a related topic, I was also surprised to see a complete absence of home-working or home-office support in the cabinet secretary’s response. Many constituents across Scotland will be disappointed to be ignored, while the Government continues to ask them to work from home and it becomes the new normal.
Working from home is not a novel idea—it has been building up over many years—and developers have previously designed areas for home working into new houses. However, the effectiveness of such home-working spaces has never been tested until now. I would ask the Scottish Government to look into that and to make recommendations for improvements.
I go back to the Government’s response. Despite managing to list every existing policy and pound spent by the Scottish Government, it found space for only a single word of welcome—and no mention at all in any detail—for the near 1 million Scottish jobs that have been saved and the £15 billion that has been spent by the UK Government. Similarly, the complete absence of recognition and of plans to expand our contribution to the UK single market should be worrying for everyone.
If there is a way in which the SNP has shown that it does not understand business, its 70-page response is it. Douglas Fraser of the BBC describes it as
“turgid ... combining defensive past commitments with often vague future plans.”
“Some recommendations are accepted, but on terms that risk them becoming bogged down in a task force, further reviews or a scoping exercise.”
The pandemic has widened the gap between rural and urban areas and has brought frustration to many constituents and businesses alike, but those problems have existed for many years, and it is disappointing to see the SNP Government continuing to miss opportunities to invest heavily in our rural communities. I can only express frustration that we are here once again talking about issues that existed well before coronavirus.
The Confederation of British Industry has said:
“real urgency is needed to spur a recovery that turns around Scotland’s economic fortunes.
Focussing on immediate priorities will provide some reassurance for business”.
Sadly, we know all too well what the SNP’s priority will be in the coming months.
I call Stewart Stevenson, who is contributing remotely and will be the last speaker in the open debate.16:49
I will address a couple of points made by Tory members before I come to the meat of what I want to say. Scotland is the part of the UK that has seen by far the biggest uplift in delivery of superfast broadband. The UK Government’s universal service obligation provides a third of the speed that the Scottish Government is working towards.
If I may say so, Dean Lockhart showed exceptional bravery in his contribution to the debate. He suggested that we had lost £500 million. We will have that debate another time. However, I have just checked and, so far, the high speed 2 project, which is controlled by the UK Government, is £30 billion over budget. Per capita, that would be £2.5 billion from Scotland, which is five times more than £500 million.
I turn to the substance of the issue that is before us today. I think that we can all agree that the pandemic has brought to many members of our population very real fear about the situation in which they find themselves, through no fault of their own and through no fault of any Government. It is important that we give them hope for the future, and the work that the Scottish Government has been doing is precisely what we can look to for that hope. The big projects of the past 50 or 60 years have been based on hope and set out by the ambition of leaders. That is what we see before us today. John F Kennedy taking his nation to the moon is an example.
However, many of the things that we can use today are not particularly new. I started using teleconferencing during a joint project with Australia nearly 30 years ago. Willie Coffey talked about the importance of software. Software is vital, but it is not as transient as we often think it is. I know for a fact that a piece of software that I used 45 years ago is in use today and is maintained by my successors.
I very much welcome the fact that in her opening remarks, the cabinet secretary referred to hydrogen. In the north-east of Scotland in particular, with the hydrogen buses in Aberdeen, we have already taken some early steps to show the viability of hydrogen as a fuel for heavy transport of one sort or another—heavy goods vehicles, buses and so on. The bus service operators grant does not focus specifically on supporting the use of hydrogen to power buses, and I think that we might care to revisit that.
In the north-east, we have huge amounts of renewable energy. A lot of it comes from onshore wind turbines, and there is space for some more. There are offshore wind turbines; the Hywind project is one example. Of course, there is also the Moray East project. The cables for that project run across my constituency and into my colleague Gillian Martin’s constituency, and they carry the raw material for producing the hydrogen that we can use.
I make a wee comment about the renewable transport fuel obligation. Hydrogen vehicles cannot access that subsidy, so we might also want to look at that.
Is there an economic opportunity that comes from hydrogen? Yes, there is, because it is in an early stage of development. We have the opportunity and the engineering skills in the north-east from working offshore and producing fuel from the North Sea—initially, it was through oil and gas, and now it is through wind turbines. That is part of what is needed. In my constituency, we have the Acorn project at St Fergus, which takes gas from the North Sea and uses the energy in a zero carbon footprint way to produce hydrogen, which can then be fed into the gas grid. Twenty per cent of what we put in the gas grid can be hydrogen, with the existing equipment that is using that hydrogen at the other end.
There is more that we can do, and I hope that we do it. I hope that we take the opportunity to use some of the significant amount of money that is being spent on retraining people to train more people in the skills that we need in exploiting hydrogen. Just as we have had success in the past from oil and gas, we can build our future on hydrogen. It presents a huge opportunity for Scotland and, in particular, for the area that I represent.
We move to the closing speeches.16:54
While we have been debating, the sad news has come through that there have been three deaths following the derailment at Stonehaven. I am sure that the thoughts of everybody in the chamber will be with the families and friends of those who are affected, including those who are injured.
I want to commend the writings of an artist from Auchtermuchty called Jim Sutherland, who is a musician and composer. He rightly highlights the tremendous economic potential of individual artists, freelancers and self-employed people who are the bedrock of the cultural sector in Scotland. He highlights the fact that the trickle-down approach of funding support for them is just not good enough. It is worth considering how we support individuals as well as companies in the coming months, because there will be periods when extra support is required, and the current schemes are simply not adequate.
I reassure the member that only this week, as part of my culture responsibilities, I have been discussing with my officials and Creative Scotland funding mechanisms by which we can support individual freelancers, because, as the member said, they are the bedrock of our arts, culture and events sectors.
Jim Sutherland will be absolutely delighted if that comes to be. I will report that straight back to him in Auchtermuchty, and I am sure that he will be very pleased.
That point speaks to a wider issue about how the furlough scheme is extended and how we ensure that the transition to new types of jobs is supported efficiently and effectively. Of course we should extend the furlough scheme—that is essential as the lockdown continues in different phases in different parts of the country. We will have small regional and sometimes larger regional outbreaks, so of course we need to extend the furlough scheme as well as other support mechanisms.
We also need to ensure that we allow businesses the space to transition to new types of markets. Sometimes, just protecting what we have is not good enough. We need a smarter, bespoke and targeted furlough scheme to ensure that businesses get support when they need it and that they are supported to transition to new types of markets and work when that is appropriate. A blunderbuss furlough scheme will not be good enough. We need to have a smarter and flexible system.
That speaks to the point that Richard Leonard made in talking about the Aberdeen lockdown. Many businesses in Aberdeen will be struggling just now, and they need extra support. Of course, the furlough scheme is there for those who can apply for it, but it is not available to everyone. We therefore need to ensure that there is flexibility at the local level to support businesses.
There is also the environmental issue. Stewart Stevenson talked eloquently about the potential for hydrogen. I agree with him, but we should not support individual technologies; we should try to be technology blind and support as many technologies that have opportunities as possible. That is why I am in favour of the carbon capture scheme getting the necessary support and in favour of support for offshore wind.
I hope that, one day, we will be able to say in this chamber that we have transferred the massive investment in offshore wind into jobs onshore, which Richard Leonard also talked about. So far, we have failed to do that. [Interruption.] I hear grumblings that it is a Government somewhere else that is responsible for that, but the promises on the issue were made here. We need to work much harder to bring industry together with Government to ensure that we make changes, rather than grumble about somebody else not doing their job. Let us make that happen, because it is really important.
It is simply wrong of Willie Rennie to describe what I said as grumbling. It is a fact that the UK Government controls energy policy and is responsible for the contract for difference mechanism, which has driven down prices and so driven down prices in the supply chain, which has made it more difficult for Scottish contractors to win the work.
That is not what we were promised when the support was provided to BiFab. The BiFab support was there, and the promise was made to save the jobs, to make sure that we could exploit the potential. Of course, there will be hurdles in the way but, for goodness’ sake, the promises were made, so let us make them happen. Where are the discussions with the UK Government to make that transition happen?
I also want to talk about the constructive engagement that I have had with the Scottish Government. The cabinet secretary will recognise that there have been good discussions about the way ahead between her and all the Opposition spokespeople. In particular, Sandy Begbie has been in touch about the young people’s jobs scheme; I wish him well on navigating the myriad of different employment and support schemes that are around, because it is not easy. There will be challenges to make sure that we can tie them all up together. Let us not compete against one another with those various schemes; let us make them work together seamlessly to give that support. If companies need support to pay a proper living wage, let us find a way to do that, because it is important that those are good quality jobs, to make sure that we make that progress.
John Mason talked about capital investment—in particular, about housing—and I agree with him. I agree with Gillian Martin about the big challenges of oil and gas, Brexit and Covid. We need to get a grip of those massive challenges and not add other challenges to them. At the end of the day, we need to get on top of the virus, because if we do so, we can get consumer and business confidence back and we can grow the economy in a sustainable and fair way.17:01
Like Willie Rennie, my thoughts and those of my parliamentary colleagues are with those who have lost loved ones in the train derailment, those who are injured and the British Transport Police and emergency services for their traumatic work.
At the end of this afternoon, there remains a lot that we have not talked about, so we need to continue to debate these important topics. The direction of travel that we—not just the Scottish but the UK Government—set out on now will determine the fortunes and life chances of so many people across Scotland. We do so at a time when real wages remain below 2008 levels, inequalities that were there before the crisis have been exacerbated and the pain felt over the past six months has been disproportionately experienced by those on lower incomes, who remain in risky work, such as women, the young and the black and minority ethnic community. It has fallen disproportionately on those who earn an income by their labour, as opposed to those who are in receipt of unearned income and economic rent from the ownership of capital, whether that be shares, gilts or land and property from which rent must—by law—continue to be derived on pain of eviction and court orders.
Those who earn their incomes from labour have done worse than those who collect economic rent. That is an exacerbation of inequalities that were already there. For example, between 2014 and 2018, companies’ returns to shareholders grew by 56 per cent. At the same time, net incomes have fallen by 3 per cent and median wages have risen by only 8.8 per cent. If wages had matched shareholder returns, the average worker today would be around £10,000 better off per year.
As Willie Coffey mentioned, yesterday, in an evidence session of the Economy, Energy and Fair Work Committee, we were joined by Professor David Blanchflower for a discussion on the impact of Covid on young people. He is a world-renowned economist, who has access to all the global evidence, and he said that all the evidence pointed to a deep scarring on the life prospects of the young across the planet. As he wrote in The Guardian in May,
“Past research has shown that those who enter the labour market during a downturn carry the costs of doing so into middle age. These come in the form of lower wages and higher risk of unemployment.”
What the young need is a new deal on jobs, housing, education and wellbeing. Professor Blanchflower argued that we need to throw not just the kitchen sink but the whole kitchen at achieving that. He also made the profoundly important point that national plans—whether they be from the Scottish or the UK Government—come with inherent weaknesses, in that they can miss important local circumstances. His view was clear that delivery of recovery schemes should be the responsibility primarily of local government and not central Government. A job guarantee is fine, but the young know best how to deliver job guarantees and they should be involved in that. The schemes need to be flexible and locally delivered.
I can reassure Mr Wightman that the direction in which Sandy Begbie is taking the work is absolutely in that vein. If the Green Party has not had the opportunity to speak to him, I would encourage it to do so. Only yesterday, Sandy Begbie and I spoke to Barnardo’s and Young Scot about the shape of the job guarantee scheme and their expectations of it, because young people should be at the heart of developing the scheme.
I thank the cabinet secretary for that useful point and I will be monitoring matters closely going forward.
However, as I mentioned in my opening remarks, the debate has been missing anything to do with the ownership and governance of the economy, finance, new mutual, crowd-sourced models, co-ops, local economies, supply chains and fiscal policy, and there has been nothing on basic income, shorter working weeks or land reform—and it goes on. Those are all structural economic reforms that would make the economy more equal, sustainable and resilient.
I will respond to several contributions in the debate. Gillian Martin stood up for the north-east, as she usually does, and I hope that her faith in low-carbon transitions is realised. I agree with her comments on flexible working and I think that she was the only member who raised that in a substantive way. That was another issue that the advisory group’s report did not address, along with wider discussions on basic income or shorter working weeks.
Annabelle Ewing spoke about the job guarantee scheme. I have already mentioned how important it is that that scheme be flexible, and I welcome the cabinet secretary’s indications on that front.
John Mason was right to highlight the future of the fiscal framework, which I do not think is fit for purpose. As important as the fiscal framework between London and Edinburgh is the neglected matter of a fiscal framework for local government.
Willie Rennie made an important point about overpromising, particularly on the economy and renewables.
Beyond that, I am not sure that the debate took us much further forward. From the Government’s response, there is plenty of work for civil servants in the plans, strategies, initiatives, reviews and programmes that were mentioned but little on the big transformational ideas that so many people are calling for.
The economy is not solely about the interests of business; it is about workers, infrastructure, care, housing and the environment. The kinds of priorities that the Government needs to adopt are the priorities and initiatives that are being discussed widely in think tanks and academia, business, industry and trade unions around the UK and across the world. Ultimately, in a pandemic, the safety and financial security of our citizens must be the priority—not returning to business as usual, which puts economic growth before both those things.
There is plenty that the Government can do and there is much indeed in its response that will be useful. Ministers should look again at the Scottish green new deal. The Labour Party’s consistent argument for an industrial strategy has a lot of merit. As I said in response to Willie Rennie’s comments, the Government needs to stop overpromising and be realistic about what can, and needs to be, achieved in the medium and long term if we are going to have the economic revolution that the cabinet secretary called for a couple of months ago.17:08
I put on record and send our condolences to those who have lost loved ones during the derailment at Stonehaven. Our thoughts are with them and with the emergency services that are working there.
Covid-19 has damaged our health and economy and we have heard that from across the chamber in this debate. However, if we stand back and wring our hands, that will simply make matters worse. The Scottish Government needs to act now. Although there is nothing to disagree with in its motion, it lacks a sense of urgency. The Scottish Labour Party’s amendment seeks to establish that sense of urgency in the debate. We should be looking at the implementation of those policies now, rather than waiting for announcements to be made in the programme for government.
I hope that policies are ready to be put in place at that time, because we cannot delay any further. We have to recognise that young people and women are facing the greatest impact, and that both our Governments need to act, and act soon. However, we are in the Scottish Parliament and we need to focus on the levers that we have here.
We in the Scottish Labour Party have continually called for a quality job guarantee scheme, which appears to have unanimous support. I welcome the Scottish Government’s adoption of that policy, but we need to see it in action because we cannot afford a delay. The effects of unemployment are devastating; it forces families into poverty and its health impact is greater than that of smoking. The impact on society is that it scars communities for a generation. We need to ensure that the quality job guarantee scheme pays a living wage, not a poverty wage.
Other members, including Claudia Beamish, have talked about a just transition and green jobs, which is an important part of a job guarantee scheme. In one of my early jobs, I worked on schemes that provided opportunities for the unemployed, and I remember that a community project provided great environmental work for a living wage. We need to look at how we can emulate that example.
Sarah Boyack and Claudia Beamish talked about retrofit, which we need to do, among other things. Willie Rennie echoed Richard Leonard by talking about how we capture the renewables jobs. We must invest in renewables, but we must also capture those jobs for our communities. I heard today from Unite the union that CS Wind in Machrihanish is no longer bidding for work in the renewables sector. If that is the case, the Government needs to act by clawing back the public support that was given to that company and stopping it having a dead hand over that community.
The member might be aware that Highlands and Islands Enterprise is in the process of taking court action against CS Wind to retain funding, so the issue is potentially sub judice.
I welcome that intervention. Hopefully, that yard can be put to work quickly.
We also need to concentrate on young people and women. Members have talked in the debate about skills and learning, but our colleges and universities are struggling and need support to train our workforce for the future.
Procurement is another issue that came up in the debate and it is one that is close to my heart. We need to use fair work practices in procurement, insist on local contracts and ensure that small and micro businesses and co-operatives are included. Claudia Beamish talked about the community wealth scheme in North Ayrshire, which is a fantastic example that we should be rolling out throughout our communities.
We need to support women as well and move to having the promised free childcare. I understand why some of the investment money for that scheme was held back and invested in key worker childcare. In the short space of time available, that was maybe the right thing to do as a quick fix. However, deferring the start of the scheme will cause more damage to women, who are being forced out of work: 50 per cent more women than men are out of work. We need to ensure that the childcare is available that will allow them to go back to work; otherwise we will roll back the gender equality agenda for more than a generation, as women will be worse off than our mothers were.
We need to act quickly and before it is too late or the situation will be much harder to put right. We need to build back better and create an equal and caring society. I appeal to the Scottish Government to use every lever that it has to rebuild our economy and do that without delay.17:13
I express on behalf of the Scottish Conservatives our sincere condolences to those who have lost loved ones in the railway incident at Stonehaven and acknowledge the efforts of the emergency services in that tragic event.
The Covid-19 crisis has so far proven to be one of the most significant challenges, if not the most significant challenge, in the peacetime era. I have been heartened by the efforts of the UK Government in the rapid work that it conducted to ensure that hundreds of thousands of Scottish jobs were protected and thousands of businesses were supported. I reiterate that I welcome the Scottish Government’s efforts in that endeavour.
Just last week, figures published by the British Business Bank showed that it has provided UK Government-backed loans and support worth more than £2.3 billion to more than 65,000 firms in Scotland since the outbreak. In the Highlands and Islands region that I represent, businesses received a total of £238 million-worth of loans.
That has undoubtedly kept many businesses afloat when they would otherwise have been left to sink, and it has protected thousands of local jobs. In addition, almost 900,000 jobs in Scotland have been secured through either the furlough scheme or the self-employed support scheme. In the Highlands and Islands, approximately 68,000 jobs have been protected.
Many businesses in the hospitality, retail and tourism sectors will be benefiting from the additional footfall generated by Treasury schemes. Those are all positive developments for the here and now, but we must also recognise that the road to recovery will not be an easy one.
Today, we learned that the UK economy is officially in the largest recession on record. That is not unexpected, given everything that has happened, but official confirmation of that is undoubtedly a salutary moment. Just yesterday, the Fraser of Allander institute gave its quarterly update on the latest labour market data and its commentary was stark:
“Scottish unemployment rose by 11,000 to a rate of 4.5%”,
which is an increase of 0.4 percentage points on three months ago. The number of hours worked
“hit a record low with the largest quarterly decrease in actual weekly hours since records began in 1971 ... Employment among those over 65 decreased at a record quarterly rate, after growing rapidly since the global financial crisis. The number of people in self-employment has fallen at a record quarterly rate as well.”
These are deeply worrying trends, and could likely be worse at the next quarter, given that the update does not take into account changes in July and August. That has been recognised by both the Scottish Government and the UK Government. Yesterday, the Secretary of State for Scotland acknowledged that and said that the UK Government would guarantee
“an additional £6.5 billion this year to spend on public services and support businesses in Scotland.”
Given all that, it is clearly imperative not only that we plan ahead for our economic recovery, but that those plans are detailed and can be subjected to regular scrutiny.
The member talked in his opening remarks about the number of loans that have been given to companies, which are welcome. Obviously, the UK Government has the powers to lend in that way. However, the practical issue is what will happen next year when firms start to repay those loans and how we can ensure collectively that there is growth and confidence for investment at a time when many companies are carrying debt. I have discussed that issue with the UK Government but it is an area that we need to get into; different solutions may come into that, but we must focus on it. It is not just in October when the furlough scheme ends, but next year with tax deferrals and so on that we will have to address serious issues to get growth back on the agenda when companies are dealing with extended debt.
I do not deny any of that. I would add that I think that that debate requires action from the Scottish Government and the UK Government; it also involves a dialogue with the banks and the various other lenders that have been lending money to firms, businesses and individuals during this time. I agree entirely that there is an important debate to be had and we should be having that debate sooner rather than later.
Conservative members have cautiously welcomed the report from the advisory group on economic recovery and the work that was done by Benny Higgins and his team, but we remain concerned at the lack of detail and that certain measures that are proposed in the plan do not go far enough.
I have noted before the various environmental measures in the plan, such as the green investment plan, which are welcome. However, many of those measures are long-term ambitions, such as the £2 billion fund that is earmarked for the next session of Parliament, the green investment portfolio, which has a three-year timetable, or the proposed digital planning strategy, which the SNP Government aims to publish in November and which has a five-year timetable for delivery.
Although many of those proposals are welcome, they are not the short-term boosts that the economy needs during this crisis. The creation of yet further strategies and task forces, as Alexander Burnett said, should not negate the fact that we need to take concrete, pragmatic action. For example, the Higgins report calls for the SNP to work with local authorities to cut red tape and to accelerate infrastructure projects; instead, we have heard that the Government will carry out only a comprehensive review of national planning policies.
I reiterate what Morris Golden so powerfully said: we need real action and plans for the near future. Having spoken to constituency work across various sectors of the economy, I am all too aware of the need for that.
In my final minute, I will touch briefly on remarks that have been made by other members. I was struck by how the economic effects of the crisis are so varied and impacting in so many areas—it is a cliché, but Covid has affected everyone. This debate has illustrated how true that is in Scotland, whether it was Andy Wightman talking about young people or the need for the local fiscal framework to be reviewed, or Gillian Martin talking about oil and gas, or Rhoda Grant talking about jobs and the job guarantee scheme. I was also struck by Willie Rennie’s comments about not forgetting individuals. We often talk about businesses, firms, companies and enterprises, but it is important to remember individual people who are in business on their own.
It is clear that we need a detailed policy memorandum that will give businesses and stakeholders the confidence going forward that support will be in place to help the economy. We argue that it is time for the Scottish Government to take action swiftly and urgently, and I urge members to support our amendment.17:21
As other members have done, I offer my condolences, thoughts and sympathies to those who have been affected by the tragedy at Stonehaven. The Scottish Government stands ready to support them in any way we can.
Today’s debate has been productive and constructive. There are, of course, some differences of opinion, as is ever the case, but we have seen a real commonality of purpose, and a clear sense that we have to come together to support people coming through the difficult economic circumstances that Richard Leonard was quite right to say are upon us at the moment, and which we know will be with us for the time ahead.
The recent months have, of course, above all, been a public health crisis. The Scottish Government’s primary approach has been to respond to it as such, and that remains the case. The imperative is to continue to suppress transmission of Covid-19 and to save lives.
Throughout, we have also been alert to the economic impact. We have reacted to support small businesses and the newly self-employed. We have focused support on tourism and hospitality and the culture sector. Approximately £2.3 billion of support has gone to business, and if Dean Lockhart wants a timescale for delivery of that, it has happened, it has been done, it is in place already, just as is the £500 million of economic stimulus that the cabinet secretary referred to earlier.
Throughout the crisis, we have also regularly engaged with business organisations and trade unions. We have worked with industry and unions to put in place a raft of guidelines to help various sectors return to activity when it has been safe to do so. We have established the tourism recovery task force and the aerospace response group.
We also have a clear focus on moving forward to support people through the period of economic recovery ahead, and that is the theme of today’s debate.
We have strong foundations from which to move forward. Much of the infrastructure is in place. Skills Development Scotland supports first-class careers advice and our PACE service has a variety of provision, not least of which are the apprenticeships. They remain an important part of providing opportunities in the times ahead. John Mason was quite right to highlight the opportunities that they provide. The cabinet secretary has already reminded us of the adopt-an-apprentice scheme, which we have enhanced with additional funding.
Our tertiary education sector is delivering outstanding educational opportunities that are geared towards economic and societal need. The flexible work development fund is vested with the college sector, driving closer working between colleges and employers in their respective areas. We have doubled the value of that fund this academic year.
We have our employability programmes established and in place. Our fair start Scotland programme has supported many thousands of people since its inception, making a difference to their lives. We have extended it for a further two years, amending the terms of the contracts that are currently in place.
I agree with Willie Rennie’s point that the employability system is sometimes complex. We will continue to take forward our no one left behind agenda to ensure that the system is straightforward and coherent for people to traverse.
In recent weeks, we have asked both the advisory group on economic recovery and the enterprise and skills strategic board sub-group to take forward some work for us, and I thank those who have taken part in that activity. The reports from both those groups have set out clearly the scale of the challenge ahead of us, but their recommendations are clear, and none of those have been discounted.
Even before publishing our response to the reports, we have acted on key recommendations. That includes our £100 million investment in employment and skills support, which includes the £60 million of funding to support young people that the cabinet secretary mentioned. We will also maximise our PACE offer for those who are facing redundancy, which—as Willie Coffey said—is critical at this time. We will bring forward plans for a transition training fund to help those who are working in sectors at risk.
I will say a little about each of those areas in turn. To show our commitment to supporting young people through this time, we are committing £60 million from our own £100 million employability skills package to support Scotland’s youth guarantee. We are committed to supporting young people through difficult times, and we have built, and will continue to build, on our strong track record through our developing the young workforce programme.
The appointment of Sandy Begbie is a very good move, as he has a personal and professional commitment to the agenda of ensuring that young people, especially those who might not otherwise have the opportunity, are able to get ahead in the labour market. I know that he will be very keen to engage with the other parties to hear what they think about the type of work that needs to be taken forward through the Scottish youth guarantee and what that might look like. Willie Rennie mentioned that he spoke to Sandy Begbie, and I know that Mr Begbie will be happy to speak to other parties too.
In that regard, we will support the amendment lodged by Richard Leonard, which recognises the importance of ensuring that Scotland’s young people do not bear the brunt of the economic challenges that Covid-19 has created. We have recognised that through the creation of the youth guarantee. Indeed, we are going further than the job guarantee that the Labour amendment puts forward, and considering the full range of opportunities that we need to put in place to support all young people.
I confirm to Annabelle Ewing that her ambitions are the same as ours: we will make sure that we build on the DYW agenda, which will be front and centre, and we will include all opportunities through education, training, apprenticeships and employment. To be clear, that support will have the fair work and living wage agenda at its core.
With regard to the transition training fund, the pandemic has resulted in changes to the labour market that will mean that many people may need to move to other sectors to stay in work. We will learn from our experience of putting in place a transition training fund for the oil and gas sector, and create a new transition training fund that will work on a cross-sector basis.
In response to the points that a number of members made very powerfully, that fund must be—as must all our investment—very much geared to the challenge of ensuring that people come through with a skill set that will allow them to get ahead in the labour market and meet the needs of our economy and society as we move forward.
On PACE, work is already under way. I am leading a short-life working group of partner organisations to look rapidly at how we can maximise the service to ensure that it meets the rising levels of demand.
We will support the amendment in the name of Maurice Golden, primarily on the basis that we want to respond to its call
“to work constructively with the UK Government”,
which is precisely what we have sought to do. Throughout the entire process, we have engaged and maintained regular contact with our UK counterparts on measures to try to mitigate the effects of the crisis.
I am keen for the UK Government to continue the success of the support measures that are mentioned in Maurice Golden’s amendment, and I am keen for it to consider our call for consideration to be given to extending the job retention scheme, because we know that there is significant concern about the cliff edge of the ending of furloughing.
I am keen, too, for the UK Government to work constructively with us. For example, I hope that it will respond positively to my invitation for the Department for Business, Energy and Industrial Strategy to be involved in the aerospace response group that I chair. That invitation has been made but has not, thus far, been accepted. It remains open, and I hope that it will be accepted.
I want to conclude by responding to Andy Wightman, who was unclear about what we mean by a “wellbeing economy”. I will put what we mean by it in simple terms. I think that he and others will agree with those terms, which were laid out by the First Minister last year when she addressed the Wellbeing Economy Governments policy labs here in Scotland. A wellbeing economy is one that recognises that GDP cannot be the only measure of economic success and that quality of life for our people is paramount; it is one that attaches as much importance to addressing inequality as it does to increasing competitiveness; and it is one that puts itself to the test on whether it is creating a fairer, healthier and happier nation. In responding to the challenges ahead of us, that is the destination that we seek, and I hope that it is one that, collectively, we all seek. Our response to economic recovery, on the back of both the reports that we have debated today, will be very much geared towards getting us there.