Meeting of the Parliament

Meeting date: Tuesday, April 17, 2018

Official Report 833KB pdf

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Topical Question Time

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Pinneys of Scotland

To ask the Scottish Government what support it is providing to the workforce of Pinneys in Annan. (S5T-01019)

I know that Oliver Mundell will share my shock and deep concern about the announcement by Young’s Seafood that it intends to cease production at its Pinneys of Scotland Annan site. As he is aware, a statutory consultation is now under way, so we should not prejudge the outcome, but we recognise that any such cessation of production would be devastating for the dedicated and highly experienced workforce at that site and that it could have profound implications for the economic and social wellbeing of Annan and the wider community in Annandale and Eskdale.

I make absolutely clear my commitment and that of the Scottish Government to doing all that we can with all the resources that are available to us and our partner agencies in working to seek to maintain production at the Pinneys of Scotland site and to retain as many of the jobs as possible. I have held a number of early discussions, including with the management of Young’s Seafood and Unite the union, and I have established an action group with a membership that includes Dumfries and Galloway Council, our enterprise and skills agencies and industry representatives to explore all viable options to protect employment. I repeat my commitment that we will leave no stone unturned to try to find a solution.

I will visit the Pinneys of Scotland plant on Thursday to meet Mr Bill Showalter, who is the chief executive of Young’s Seafood, and will convey our concern about the situation and reinforce the message that we are keen to work with Young’s Seafood to secure the employment at the site. I will also meet representatives of the workforce and assure them that the Scottish Government and our partners will provide all the support that we can during this difficult time.

I thank the minister for the work that he has done to date. It is very important that we have managed to build cross-party consensus around what is the most significant thing to happen in the Dumfriesshire constituency since my election. Does the minister believe that there is a willingness from Young’s Seafood to retain production on the site? From the conversations that he has had so far, can he say what options have been explored with the company?

I echo Oliver Mundell’s point: we are very pleased that there is cross-party consensus on the issue. It will help the workforce enormously to know that we are all behind it, and that will help our efforts to secure a positive outcome. I particularly welcome the activities of Mr Mundell, Joan McAlpine, Colin Smyth and other local members in working with the Scottish Government constructively to explore all possible solutions.

On Young’s Seafood’s willingness to engage with us, we can take it at its word. It has said that it will work closely with us and that it had assumed in taking the original decision that some options were perhaps not available to it. Therefore, it is willing to reopen that discussion.

It is clear that two of the three main contracts—one, unfortunately, in Scotland and the other nearby in Carlisle—have been lost to other businesses. That means that it will be difficult to sustain all the employment in Annan unless we find alternative sources of business for the plant with other retailers or another occupier to come in in the event that the plant is to close.

Obviously, we have to await the outcome of the statutory consultation before we take forward some aspects of the work, but I reassure Oliver Mundell that we are very much focusing on looking at all the options and that we will do everything that we can, working with local members, to provide a viable future for the site.

My understanding is that four parties have expressed at least early interest in the site. I seek the minister’s reassurance that those potential buyers will be entitled to help and support from the Government’s agencies and that any grants or financial incentives that can be put in place will be put in place should those buyers decide to move forward.

I can certainly say to Mr Mundell that we will offer, subject to all the due diligence that would have to be undertaken with any grant application, all financial support that we can within the state aid limits that we have to operate within. I know that he is aware that seafood is, unfortunately, affected by a particularly tight constraint around state aid considerations and a de minimis limit, but other food production has much greater scope for support. We are considering a number of interested parties, not all of which are in seafood, and we will certainly look to see what support we can give. That will be treated with the highest priority to try to provide secure employment for those at the site.

We know how vulnerable the economy of Annandale and Eskdale is. A loss of jobs on such a scale would be the equivalent of around 25,000 job losses in Edinburgh. It goes without saying that we recognise the significance of the issue to Mr Mundell’s constituents.

The minister will be aware that Pinneys of Scotland’s sole customer for several years under Young’s Seafood was Marks and Spencer. I appreciate that groceries regulation is a reserved matter and that exclusivity of supply is not prohibited in the groceries supply code of conduct, but does the minister agree that, although such arrangements might seem beneficial when demand is high, they can have very negative effects when there are other market challenges? What can be done to address that?

I very much agree with that sentiment. We recognise that there are commercial considerations, but I acknowledge the point that Joan McAlpine has made. When a plant is in effect dedicated to one client, if any work is lost through that client, that plant is particularly vulnerable.

We are looking to engage with Marks and Spencer on this particular scenario and we are seeking to meet Marks and Spencer’s senior management team this week, if we can, to understand fully its perspective and to get to the bottom of the matter. We have had some initial conversations with Marks and Spencer, but we want to speak to the company on the specific issue of single-company sites. I agree with the member that the risks that are associated with having a single-client site are exposed horribly and illustrated starkly in the case at Annan.

When we add agency and seasonal workers to the permanent workforce, we see that, if Pinneys closes, the number of potential job losses is likely to be nearer to 700. As the minister is aware, that would be an economic tsunami for that community, given its size.

The first priority is to use the 45-day consultation to convince Young’s Seafood to change its closure decision and, if we are unsuccessful, to find a buyer for the site. Does the minister share the concerns of the local community that one of the reasons why any job losses would be so disastrous is the fact that there are still fundamental weaknesses in the local economy that desperately need to be tackled, such as poor infrastructure, low pay and a lack of alternative large employers?

I absolutely identify with Colin Smyth’s latter point. We are taking forward proposals for a south of Scotland enterprise agency, which is part of a medium to long-term mission to try to transform the economy of the south.

In the immediate period, we have a more severe challenge in Annan. If all 450 permanent jobs—and the seasonal jobs during October to December, which is the peak period of production—were lost, there would be significant consequences for the area. One of the virtues of having established the action group is that, as well as being able to look at the particular impact of the plant closure, we can see whether anything that comes out of that process can help us to strengthen the economy of Annan. As Colin Smyth knows, there are other communities around Annan that are affected, such as Gretna and Lockerbie, where a number of staff who work at the plant live. The vast majority of the staff are concentrated within a 10-mile area, so clearly job losses on that scale will have a huge impact on Annan.

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Cockenzie Site (Planning Application)

To ask the Scottish Government for what reason it has called in the planning application for a substation on the site of the former Cockenzie power station. (S5T-01023)

As planning minister, I called in the application as it clearly raises issues of national importance. The Cockenzie power station site is a strategic site in national planning framework 3, which was published in 2014. The framework recognises Cockenzie as an important hub with significant opportunities for renewable energy-related investment and it identifies two national developments relating to the site. The framework states that Cockenzie is part of the high-voltage energy transmission network, which is listed as a national development.

Consent and associated marine licences were granted in 2014 for the Inchcape offshore wind farm and a grid connection agreement is in place to connect it to the Cockenzie site. The planning application is in relation to the electricity substation that is required to make that connection. There is a deadline in quarter 1 of 2019 for a bid for United Kingdom funding for the Inchcape development through the contracts for difference process. To be eligible, all permissions and consents must be in place. Calling in the planning application gives a greater chance of a timely decision ahead of the funding deadline. The reporter will consider local views including the local development plan, and the calling in of the application does not predetermine the outcome of the planning process.

The site is of strategic importance all right; it is the biggest opportunity for economic development and job creation in local living memory. The proposed substation is right on the waterfront and could jeopardise the potential development of the site as a port. Its future should be decided locally by local councillors who understand that potential and who are accountable to local people. That is what happened in 2014, when planning permission for the same substation, on a different part of the site, was granted by East Lothian Council. A local decision was okay in 2014; why does the minister think that he knows better this time?

As I said in my first answer to Mr Gray, there is an issue here of potential national significance. The Government recognises the importance of local decision making and we use call-in powers sparingly. On this occasion, we decided to call in.

The reporter from the planning and environmental appeals division will ensure that the community is given the appropriate time to consider and comment on the application, so that community views are taken into account prior to the reporter making a recommendation to me, as minister.

The other issue here, of course, is that in 2016 this project was bought by Red Rock Power, a company that is owned by the Chinese State Development and Investment Corporation, which the First Minister was meeting last week at the very moment when the planning decision was called in. Can the minister understand that it looks to my constituents as if he is prepared to ride roughshod over their interests and aspirations, to protect the interests and aspirations of a Chinese-backed project that will create not one job in East Lothian? If he wants to convince my constituents otherwise, will he do that now, by returning this decision to East Lothian Council, where it belongs?

As Mr Gray is well aware, I made the decision to call in on 4 April, and that was related to East Lothian Council on 9 April, before the First Minister was in China—

The day before!

We have been absolutely clear that there was no connection whatever to the First Minister’s visit to China.

Consideration of planning cases is focused on the merits of the case. The identity of the applicant is not a planning consideration that is relevant to the assessment of any application.

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2 Sisters Factory (Closure)

To ask the Scottish Government what its response is to the closure of the 2 Sisters factory in Cambuslang. (S5T-01034)

I am extremely disappointed at the decision by 2 Sisters Food Group to close its facility in Cambuslang.

Clare Haughey and I were in contact on a number of occasions during the consultation phase, so she will be aware that we worked hard to avert the closure. I have been actively involved in discussions with the company and stakeholders, and I have met Jeremy Hudson and written to Mr Ranjit Singh, the 2 Sisters founder, offering every support to retain the site at Cambuslang.

The Cabinet Secretary for Economy, Jobs and Fair Work, Keith Brown, has met Unite the union, and the Scottish Government, Scottish Enterprise, Skills Development Scotland and South Lanarkshire Council have all worked intensively with the company to explore every possible option to secure a sustainable future for the site and to safeguard jobs in Cambuslang.

Unfortunately, despite all those efforts, the company has made its decision to close the site. I greatly regret that, but I assure Clare Haughey that our partnership action for continuing employment—PACE—team has agreed a programme of support activities with the company, which will provide support for all affected employees as they look for alternative employment. As Ms Haughey might be aware, the team has a tremendous record in helping people who are affected by redundancy.

Along with many of my constituents, I was extremely concerned by last week’s announcement that the factory will close in August. The impact on affected staff and the local community could be devastating. Several members of the same families work in the factory and many of the workforce have been employed there for decades. Small businesses rely not only on the workers who use their services but on the 2 Sisters company for contracts. Can the minister give detail about the support that the Scottish Government will provide to my constituents at this difficult time?

I certainly can. We talked about an action group in the context of the question about the jobs shock in Annan, in Dumfries and Galloway. My proposal is to discuss with South Lanarkshire Council how best to progress collaborative action in supporting the local community that will be affected by those job losses. We will look to discuss with the council whether there might be advantages in establishing a similar action group in response to the job losses at the 2 Sisters factory.

Looking at the issue more widely, we aspire to get pay support into the company. As I alluded in my first answer, a full programme of pay support activities has been agreed with the management at 2 Sisters. That is not always the case in such situations, so that is a positive in itself. We know that it has a profoundly important impact for individuals who are affected. The Scottish Government has also committed more than £500 million over the next 20 years to the Glasgow city region deal. It will look to support delivery of its programme of investment to stimulate economic growth and create jobs right across the city region, which includes South Lanarkshire, and to see the extent to which such investments can support the economy there.

I seek to work with Clare Haughey and other members from across the chamber who I know have an interest in the matter to ensure that we draw down as much support as we can from Scottish Enterprise and our other enterprise and skills agencies to help local businesses. Ms Haughey is absolutely right in saying that not just the company but the wider supply chain in the area will be affected. We will identify companies that are vulnerable, and we will work with 2 Sisters to identify its suppliers and see what we can do to support them through this.

I thank the minister for his very detailed reply to my question. However, will he commit to engaging with all relevant agencies, including South Lanarkshire Council, with a view to convening an action group similar to the one that is being organised in Annan? What can the Scottish Government do to support the future use of the site so that jobs can be created and supported in Cambuslang?

Yes, I commit to Clare Haughey that we will pursue discussion with South Lanarkshire Council to see whether we can convene an action group. I do not want to prejudge that, because the council may have a different view on how we might best work together. We do not always require an action group to deliver an impact. In recent years, there have been several examples in Lanarkshire of our having managed successfully to get work for employees who have been affected by redundancy programmes even before they have lost their jobs.

We will wait to see what comes from that discussion, but the wider interest in the future use of the site, to which Ms Haughey has alluded, is another issue that we can pursue with the council. I would not want to tread on the council’s toes regarding its responsibilities on economic development, but—as we are doing with the transfer of jobs at Chivas from Paisley to Dumbarton—we are keen to support the local authority in looking at options for master planning for the site and to see whether the Scottish Government can do anything to make sure that that valuable site can be used to provide further employment opportunities.

Does the minister agree that Marks and Spencer, the main customer of 2 Sisters, is complicit in the closure plan by supporting the moving of poultry operations to one site in England? Will he give consideration to the reasonable suggestion from Gerard Killen, the local member of Parliament, that a task force involving all parties and relevant agencies be set up to look at solutions for averting the closure?

On Mr Kelly’s latter point, as I said in my response to Clare Haughey, the first thing that I want to do is speak to the local authority—South Lanarkshire Council—and find out what it would like to happen. I take on board the point that Gerard Killen has made—which James Kelly has repeated today—that a task force approach is sometimes valid and can work effectively, as the steel task force did, although in other scenarios an action group can be fleeter of foot and can move more quickly to identify opportunities. That is what we are doing in Hawick and in Annan. We will have a discussion with the council on that point.

As I alluded in my response to the earlier question on the Pinneys plant in Annan and the role of Marks and Spencer there, we are keen to engage with Marks and Spencer. We can certainly discuss with the company the business model that it is deploying and the impact that that is having in situations such as these. However, I want to listen to Marks and Spencer before I draw any conclusions as to how the situation has been arrived at. As Mr Kelly will, I hope, understand, I do not want to shoot first and ask questions later; I would rather listen and hear the views that Marks and Spencer puts forward. Nevertheless, I take Mr Kelly’s point on board. We are worried about plants’ vulnerability in respect of single clients. When a company loses tens of millions of pounds’ worth of work in one go, that will clearly have a massive impact on employment.